Engaging with Energy, Oil & Gas Expert, Steve Reese

In this episode…

Today’s guest, Steve Reese, is the CEO of Reese Energy Consulting, a full-service consulting firm serving the energy sector, and Reese Energy Training. He is an expert in natural gas contracts, energy marketing, sales contracts, and more. Mr. Reese holds a degree in Business Administration from the University of Central Oklahoma. 

Experts should review the pleadings before accepting an engagement, according to Mr. Reese. Doing so ensures that you are comfortable putting forth your opinion in service of the engaging attorney’s conclusion. This may require some convincing and a non-disclosure agreement, but Mr. Reese finds it worthwhile. 

Check out the entire episode for our discussion on direct client engagements, late payments, and understanding the limits of an attorney’s technical knowledge.

Transcript

Introduction to Steve Reese

Speaker 1 0:01

This episode is brought to you by Roundtable Group the experts on experts. We've been connecting attorneys with experts for over 30 years. Find out more at roundtablegroupcom.

Speaker 2 0:15

Welcome to Engaging Experts. I'm your host, Noah Balmer, and today I'm excited to welcome Mr Steve Reese to the show. Mr Reese is the CEO of Reese Energy Consulting, a full-service consulting firm serving the natural gas industry primarily, but not exclusively, and also Reese Energy Training. He is an expert in natural gas contracts, energy marketing, sales contracts and a whole lot more. He holds a degree in business from the University of Central Oklahoma. Mr Reese, thank you so much for joining me here today on Engaging Experts.

Speaker 3 0:48

Thank you, noah, my pleasure.

Speaker 2 0:50

Let's jump into it. So you've been in the energy sector for boy decades. How did you first get into expert witnessing?

Speaker 3 0:58

I think what transpired? This is year 45 for me in the energy space and when I left the corporate world in 1994, there was a couple of ideas. I had One beginning just consulting, the first thing I thought was I have a niche in some of these contracts that I negotiate, so I'll write some training courses and those kind of fed each other. And then I got approached as a potential expert witness, probably in about 1995. And what was interesting, one side of this litigation approached me when I read the pleadings. Litigation approached me.

Speaker 3 1:48

When I read the pleadings I realized I didn't have a conviction about their side. And the other side, you know, approached me and I began, you know, doing that and so I never really solicited for that. But all of those types of engagements kind of feed each other with respect to, you know, being known as an expert or being legitimatized a little bit with respect to a certain acumen or subject matter expert. And so it's fed me well, and now I have a staff that I, you, that I move into these engagements as they come in their door.

Speaker 2 2:29

Let's talk about some of those initial phone calls. When you very first started, you said you hadn't solicited anything. You got contacted by both sides. How has that informed the way that you take calls now? What is your current method for taking a call for a brand new engagement? What are the sorts of questions that you like to ask and what are the sorts of questions you like to hear from the engaging attorney?

Speaker 3 2:53

The first thing I want to do is I want to see the pleadings, I want to see what the case is about and if I have to sign an NDA, that's fine. I want to make sure that I am convicted that I'm on the right side of it, and I've been approached numerous times where I've said I disagree with you and I can't get up and testify on your behalf if I don't agree with your side of the equation. And so the first thing I vet is I vet the case itself and make sure that that I and I'm not saying I'm right, I'm just saying I want to know which side that they represent, plaintiff defendant, however it shakes out. So that's kind of one of the first you know things I learned. And the other thing mostly the thing I learned early on was I wasn't charging enough.

Speaker 2 3:50

What you were first talking about. When you are kind of vetting them and you need to read some pleadings, you need to learn a little bit more about the case. Maybe sign an NDA. Is any of that a billable occurrence or is that just kind of something that you have to do? Cost of doing business.

Speaker 3 4:14

No, that's cost of doing business Absolutely and really. Any time that I'm marketing or subjecting my staff to reviewing something up front, we tend not to charge for that.

Speaker 2 4:21

Sure, are there specific terms in your contracts that you use to kind of protect yourself and make sure that you are going to be paid? For example, I've had a lot of expert witnesses tell me that sometimes they're engaged just to scare off the other party because they're kind of a big deal in their area, and then they end up not really making very much. So do you have a non-refundable retainer? Do you like to do hourly rates, project rates? What's your billing situation?

Speaker 3 4:51

We'll normally do hourly and we will put a late payment clause in. The other thing that I have learned over the years years is it's best to engage directly with the client instead of the attorney. If you engage with the attorney, they're going to wait to get paid from the client before they pay you, and no offense. But a lot of attorneys aren't really quick to write a check, and so we've learned that for us it's best to engage directly with the client in the lawsuit.

Speaker 2 5:27

Is that fair? You know you're not the first expert who's told me that that if your contract is with the attorney, the attorney is typically the one who's actually engaging you contractually. Is it fair for them to wait to pay you until the client has paid them?

Speaker 3 5:46

them to wait to pay you until the client has paid them. It's fair as long as it's a reasonable amount of time when you get into. You know 90 days or longer. Then we get nervous and we'll contact the client directly. But you know that's very infrequent and really it's happened. But it's not really the main point of negotiations or anything. It's just something to be aware of.

Speaker 2 6:10

As somebody who's been doing this for quite a long time, what are some of the changes that you've seen in expert witnessing throughout the years? Are more engagements moving towards settlement? Has technology changed the way that you go about doing any particular aspect of expert witnessing? What are some of the changes that you've seen over the decades that you've been at it?

Speaker 3 6:31

Yeah, that's a great question. First off, yes, it's probably been 25 years since I've testified in a courtroom. Wow, I mean I would say 95% of the ones that we've done in the last 20 years settle. Yeah, technology definitely has changed. We do almost everything exclusively now, obviously through a share file or a Dropbox. You know, email and fax and carrier pigeon and Pony Express have kind of gone by the wayside.

Speaker 2 7:09

Absolutely.

Speaker 3 7:10

Trust me, I'm not the one to set up the share file, that's for sure me.

Speaker 2 7:20

I'm not the one to shit set up the share file, that's for sure. Um, do you find that the there's a difference in the way that you present yourself on a camera using telepresence versus being there in person? Is it more difficult to connect with a judge or a jury or an attorney when you're doing so in front of a camera versus a screen?

Speaker 3 7:36

Oh, yeah, yeah, absolutely. I think you know my business has been built on face-to-face and the old school of shaking hands and looking someone in the eye, and it is different engaging like this, but it's doable, and we conduct so much of our business via Zoom or Teams or whatever that I think you work around it and you can accomplish the same thing, but it's not the same. But that's the world we live in.

Expert Witness Engagement Process

Speaker 2 8:05

Do you have any tips, any specific things? Do you like to make sure you're looking into the camera for eye contact or do you change the way that you dress or make sure you're not fidgeting? What are some of the things that you do to maintain a professional demeanor on in telepresence?

Speaker 3 8:21

You notice I have a cheap T-shirt on right.

Speaker 2 8:24

Well, this is audio, so that's all right.

Speaker 3 8:33

I could have told everyone do believe in a professional presence, and my staff I let them know that as well. I'm not the world's best at it, but I think it's more relevant when it comes to newer clients and new engagements and new engagements. Once people get to know you whether you have a beard or not or whether you have a suit on or not I think those have become moot points Now. I worked in the corporate world, I worked for Texaco, and we wore a suit and tie, you know, and I think in certain industries that is appropriate, In other ones I think it's a moot point. But we do so much now, virtually, that that's a tough question for sure.

Speaker 2 9:25

Do you find that there are some venues that are more casual than others, or even some judges that are more casual than others, and how do you adapt to those situations to still get your point across, when it's either very casual or very formal?

Speaker 3 9:41

In my experience when I've been in the courtroom, with regard to formality, what I key in on is the judge's knowledge, because I've had some judges, to be frank, that had absolutely no clue on the subject matter. You know they were there to make a decision. However, they didn't understand oil and gas or whatever we were talking about. So one of the things I look for is that. So that's how I present myself. If I have to kind of do my gas 101 course in court, which I've done before, I may have to go to that level. That's fine. Not everybody's an expert on everything, so I think, more so than appearance, I think acumen is really something that I try to look for.

Speaker 2 10:29

How do you convey some of these complex engineering topics to laypersons in a way that you're not talking down to them but they're going to absorb the important bits? For instance, do you like to use demonstratives, images, videos, things like that?

Speaker 3 10:44

Yeah, you know, I've taught my seminars to probably over 10,000 professionals over the years, and as long as I have a whiteboard and a flip chart, I can get my message across, because the business at its core is not that complicated. But I mean, you know, to a heart surgeon that's not complicated either. And so I think you just have to read the room, just like you do with your radio audience or anything else. You have to kind of read the room, just like you do with your radio audience or anything else. You have to kind of read the room and understand where you should start. The one thing I learned early on in my career is, if you're a subject matter expert, when you get in the room you probably know more than 95% of the people in the room, including the judge, attorney, counsel, other experts etc. So you have to be able to do that in a non-condescending manner.

Speaker 2 11:44

You have a pretty broad expertise. That kind of touch a lot of interrelated areas, but it's still pretty broad. How do you not only become an expert but how do you remain an expert in your field, how do you stay abreast and, on top of everything, such that people are still going to call you because you understand not just the area but the current goings on in your field?

Speaker 3 12:06

Partly through my staff and partly through social media. I don't do a lot of social media, except for LinkedIn, and it's probably where you found me, and I have about 40 or 50,000 followers and I have a great media director that writes my posts for me. She scours everything every day and we post three or four times a week. Obviously, I do not pay any attention to the legacy media. The Main Street media is obviously not trustworthy anymore. I listen to podcasts and I'm on podcasts and you know, as you grow and mature, you have to take everything in and you have to vet it for yourself. You can't have someone else telling you what to believe and that's the only thing that does. That is the color of our beards. Right, it's got to come. Got to come through experience.

Speaker 2 13:06

Absolutely. Let's talk a little bit about before you had mentioned working directly for clients. That's really interesting to me. Can you talk about that a little bit more? What is it like being engaged by a client, working directly with a client or you know, we're talking about the end client, obviously versus working with the attorney? For instance, when you are communicating with the end client, does the attorney or an attorney always have to be present or monitoring what you're saying for discovery?

Speaker 3 13:33

Once you know, once something is filed, pretty much you know and it's something that they don't really like, unless we are all you know, all together. What's interesting is a lot of the expert engagements that we end up on started a lot of times as a consulting engagement and we've done an engagement helping them with an audit or marketing or something and ran into a nefarious character on the other side and it goes into litigation. Yes, then things change dramatically. You want to stay away from really putting almost anything in writing that the attorney doesn't approve. If you're going to talk to someone, you need to do it on the telephone. But you know certain corporate entities record their phone calls. So you just have to have some discernment into what you say, and I've been in some engagements where some experts' phone calls have been played in court and I'll just say it was pretty embarrassing for them.

Speaker 2 14:44

When an engagement moves from being a consulting job to a courtroom engagement or an expert witness engagement, is there some kind of a transfer process? Is there things that you have to do to get your ducks in a row to prepare yourself for that, things that you have to do to get your ducks in a row to prepare yourself for that? And does your work product prior to it becoming an expert witness engagement? Is that work product discoverable by the other side, or does it start once you're engaged as an expert witness?

Changes in Expert Witnessing

Speaker 3 15:13

I think it's all discoverable in my experience. And, yes, I think your focus changes, obviously, and your work product changes, because now anything that you're providing or report, you're writing or whatever you know for sure are going to be out in the stratosphere and you know, usually the rate will go up. If we're going to, you know, go into battle, that's my fees are going to go up. So there is a transition for sure and we'll usually go ahead and have that potential transition written into our base consulting agreements.

Speaker 2 15:55

Are there any red flags that you look for along the way? You talked a little bit about your vetting process when you're first getting started in an engagement, but sometimes things change during an engagement. What are the things that you look for that you have to watch out for during an engagement that you can tell that it's maybe not going the way that you want it to go?

Speaker 3 16:14

So if you've been sitting in my office watching me, is that where that question came from? Well, the biggest red flag is late pay from a client. And another red flag are entities and individuals that start promising deadlines and that are kept and continue to promise the tomorrow, the tomorrow thing, and we've got a couple of those now that and it's a hard tell because if it's a new customer and you don't know them, it's through experience. After a while I begin I can be skeptical. You know a guy says oh, we're going to change the world, we're going to drill a million wells and they're six months into it and they're having trouble paying your $2,500, you know bill. Then you know something is up. Usually late pay and things of that nature can clue you in pretty quick.

Speaker 2 17:18

Speaking of scheduling, do you get a lot of last minute rush things. I need an expert witness report in three days, help, and if so, do you bill differently for those sorts of things?

Speaker 3 17:29

I don't know that I bill differently, but that's basically the MO of most attorneys. I mean, we're working on a huge report right now that we thought we had all summer. That's due now in 31 days. It's going to be, but you know we'll make it. But hurry up and wait is some of their favorite terms.

Speaker 2 17:48

Yes, let's talk a little bit more generally. How do you get off on the right foot in a new engagement? What are the sorts of things that expert witnesses should be doing and that attorneys should be doing to make sure that it's a successful, mutually productive expert witness engagement?

Speaker 3 18:07

It's all about communication and it's all about being honest and communicating what you do know and you don't know. I mean, I'm never going to go into an engagement or a lawsuit saying you know, we're experts in areas A, B and C when it's B and D and the same from the attorney's aspect. We've been fortunate that almost all the attorneys we've worked with have acknowledged and acquiesced to the fact that they didn't know a lot about what we were going to be discussing in detail. They understand the legal machinations and how to get to an end result, but we've had some really good engagements where, at the end of the day, it's all about communicating between ourselves and the law firm.

Speaker 2 18:54

Do you have any predeposition or pretrial routines that kind of get you in the right headspace, get you ready? You know, I have experts that say they like to drink a ton of coffee or they don't want to eat anything until after. Or give any pre-depo, pre-trial routines that just get you ready to go.

Speaker 3 19:14

Pray, very serious, I mean. I just pray that the Lord shows me that I will be honest and tell the truth. And you know it's interesting so many times if you get on the sand, the opposing attorney's job is to basically call you everything in the book. And I have a couple of engineers who work for me that they love that. They're like I want to get up there and I'm like go for it. So no, you've just really the key to getting ready is knowing your material. Just like presenting, it's a lot like training and seminars. If you know your material and know what the case is about and know your side, then if you're prepared, things will go a lot smoother.

Speaker 2 20:06

Are there any cases that you can talk about? Obviously, you don't have to get into any specifics because of MBAs and whatnot, but are there any cases that either inform the way that you go about expert witnessing, reinforce something or change something about the way that you go about expert witnessing in general?

Client vs Attorney Relationships

Speaker 3 20:24

Well, I think the main thing I did learn early on was to literally understand the acumen or lack thereof of the legal counsel, and there were a couple of large class actions in Oklahoma that's been 20 to 30 years ago about oil and gas producers being able to charge certain fees to royalty owners, and they went all the way to the Oklahoma Supreme Court, and we've done them in Oklahoma. Texas counsel had absolutely no understanding of how those deals are transacted, and if that happens, you know you're just in trouble. And so I think some of those early cases in the late 90s taught me a good lesson.

Speaker 2 21:25

Absolutely. Before we wrap up, do you have any last advice for expert witnesses, in particular newer expert witnesses or attorneys working with expert witnesses?

Preparing for Testimony

Speaker 3 21:37

I think I just reiterate that the best thing to do is have an understanding of each other's knowledge and how far that goes or doesn't go, and also be able to, you know, bifurcate the different duties, whether it's accounting, whether it's commercial contracts, whether it's engineering. You know our business has about five or six different components like that, and I think the attorneys and a lot of these experts need to realize that no one knows it all. And I think, as long as that's understood and you know what your niche is and you can convey that to counsel, that makes things a lot easier.

Speaker 2 22:21

Sage advice. Mr Reese, thank you so much for joining me here today.

Speaker 3 22:25

Thanks.

Speaker 2 22:25

Noah, nice to meet you, you too, and thank you, as always, to our listeners for joining us for another edition of Engaging Experts Cheers.

Speaker 1 22:34

Thank you for listening to our podcast Engaging Experts. Our show notes are available on our website roundtablegroupcom.