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Tesla move boosts already-electric Austin legal market

Lawyers in Austin are feeling charged up by Tesla Inc’s decision to move its headquarters there from Palo Alto, California, saying it further cements the Texas state capital’s place as a key legal market.

Austin and other Texas cities have become magnets for technology and other companies looking to expand outside their traditional homes in California and the Northwest. Oracle in December said it was moving its corporate headquarters to Austin from Silicon Valley, and more than 100 companies have either relocated or expanded their headquarters in the Austin area so far this year, according to the Austin Chamber of Commerce.

Law firms have followed. At least seven firms, including Berry Appleman & Leiden, Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, Kirkland & Ellis, Latham & Watkins, O’Melveny & Myers, Quinn Emanuel Urquhart & Sullivan and Rimon have all opened new offices in Austin this year.

“The proof of concept is being proved over and over,” said Asher Griffin, co-managing partner of Quinn Emanuel’s Austin office. He added: “Tesla is a huge name, and it’s another plus sign on the column.”

The arrival of companies such as Oracle and Tesla — as well as the draw of longstanding institutions including the University of Texas at Austin — will push law firms to invest even more heavily in their Austin offices, said Peyton Smith, managing partner of McGuireWoods’ Austin office.

Smith noted that, even before company CEO Elon Musk’s Thursday announcement, Tesla was already building a massive car and battery manufacturing complex there.

Still, Austin-based lawyers and their firms shouldn’t necessarily expect a windfall, according to law firm leaders who spoke with Reuters. They noted large companies that are moving to Austin already have pre-existing relationships with other law firms. (Among the company’s outside firms, Tesla last year turned to Quinn Emanuel to contest COVID-19 restrictions in the California county where its Fremont factory is located. Musk said he moved to Texas last year.)

“I think those relationships will ultimately tend to be what drives the assignment of legal work to firms, more so than how long a firm has had an Austin office,” Bert Greene, managing partner of Duane Morris’ Austin office, said in an email.

While several firms with nationally known technology transactions practices have long had Austin offices, like Wilson Sonsini Goodrich & Rosati, others such as Cooley have yet to plant a flag there.

Smith said he sees opportunities in marketing his longstanding ties in Austin, including in both state and local government. With incentive packages sometimes helping lure in new arrivals to the city, lawyers “can help navigate that pathway,” Smith said.

And even if pre-existing relationships often trump geography, Green said there’s “no question” that being on ground “will allow firms to better serve their clients that have established significant operations in Austin.”

Read More:

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Silicon Valley’s Gunderson Dettmer follows startup cash with Austin re-launch

Kirkland continues Texas expansion with new Austin outpost

Quinn Emanuel eyes growing patent docket with new Austin office

Oracle moves headquarters to Texas from Silicon Valley

David Thomas
David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at [email protected] and on Twitter @DaveThomas5150.

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