Big Law sees a gold mine in data centers
‘Everybody and their brother is a digital infra and power lawyer now.’
The surge in AI data center construction and related energy projects has created an intense competition for skilled lawyers among major law firms. Traditionally, electricity-related dealmaking was a low-key area in many Wall Street firms, but that has shifted dramatically. Firms are establishing specialized digital infrastructure desks, attracting attorneys with expertise in energy, real estate, insurance, finance, and other sectors.
Melissa Kalka, a partner at Kirkland & Ellis, reported handling $110 billion worth of deals in the past year. She emphasizes the dynamic nature of the industry, stating that a nimble firm's leadership is crucial for success.
Despite the promising opportunities, the AI boom is accompanied by various risks. Hyperscalers are accumulating considerable debt, private equity investments in power plants may struggle to find customers, and power equipment manufacturers are cautious about scaling up production. Utilities face significant political pressure to keep their costs low.
Despite these challenges, data centers offer a complex legal landscape with many moving parts, from land acquisition and financing to the use of cutting-edge technology like GPUs.
These projects require customized contracts and legal guidance for each unique phase, from conception to operation. The sheer scale and complexity of the assets involved, as well as the novel legal and commercial risks, mean that big firms can offer a wide range of services to their clients. Heather McDevitt, chair of White & Case, notes that the firm has advised on more than $100 billion in data center deals within the past few years and has expanded its practice accordingly.
The rapid pace of dealmaking, with some transactions completed in weeks rather than months, intensifies the competition among firms for top talent. Partners at various firms highlighted the importance of hiring additional staff to capitalize on the burgeoning demand, despite the challenge of maintaining high standards of quality amidst rapid growth.
While some lawyers may exaggerate their expertise in digital infrastructure and power law, the industry's relative novelty means a shortage of experienced professionals remains a significant hurdle.
Written by urgent.news from Semafor's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
