J. Philip Rosen, the co-head of Weil Gotshal & Manges’ white-shoe real-estate law practice, was dropping his daughter off at Columbia University this year when he noticed a long line of cars each with an Amazon Prime decal on its side.
At the time he was trying to expand Weil Gotshal’s practice representing the warehouse owners who lease space to Internet retail giants. Eyeing the cars, he figured a little bit of information about Amazon Prime’s business would be helpful. “I went to the driver of one of the cars and said what’s going on here?” Mr. Rosen recalled.
Mr. Rosen slipped him a bit of money as an incentive. “Twenty dollars later he said ‘sure, I’ll tell you.’”
As real-estate owners adapt to new technologies, the law firms that represent them are changing to keep up with existing clients and add new ones. In Weil Gotshal’s case, the intel Mr. Rosen gleaned from the driver and from a road trip he took visiting modern warehouses along the New Jersey Turnpike helped the firm gain business.
Clients hired Weil Gotshal to represent them in four of North America’s five largest industrial real-estate transactions in the past two years. “Clients want more than just somebody who can do paperwork on transactions,” Mr. Rosen said. “You have to be able to give business advice.”
Other New York patent law firms that have dominated the city real-estate industry over the decades have figured out other ways to mine business from the new, technologically oriented players showing up on the scene. Clients of Gibson, Dunn & Crutcher, another firm with a large real-estate practice, include WeWork, an innovative office-space company that signs long-term leases, adds hip designs and amenities and sublets to startups and other small businesses.
New York’s law firm with the largest real-estate practice, Fried, Frank, Harris, Shriver & Jacobson LLP, is trying to leverage that strength as it tries to develop more business in the tech sector. For example, the firm has been trying to add more U.K. tech startups as clients, particularly those interested in branching out to the U.S.
“It certainly is of interest that we have a strong real-estate practice,” said Daniel Glazer, a partner in the firm’s tech practice. “We’re happy to leverage the contacts and friends that we have.”
Firms with big traditional real-estate practices have to work hard to keep up with technological changes if they don’t have large tech businesses. Startups typically prefer law firms with large Silicon Valley practices that have legal expertise in such things as raising money from venture capitalists and initial public offerings.
That’s true even for many startups trying to serve the real-estate industry, like CompStak and VTS. “You want to be connected to lawyers who are up to date on the latest things in seed funding and venture capital,” said Michael Mandel, chief executive of CompStak.
Orrick, Herrington & Sutcliffe LLP, a firm with a big presence in Silicon Valley, has about 20 clients involved in the real-estate-technology industry, including LoopNet and Opendoor. “We don’t think the fact that [law firms] have a traditional Real Estate Attorney business is a real competitive advantage,” said John Bautista, head of Orrick’s technology-companies group.
Still, lawyers at some of New York’s traditional real-estate firms are figuring out a way of muscling into the brave new world of real estate. Mr. Rosen, at Weil Gotshal, says his firm didn’t pay much attention to warehouses and other industrial real estate until the Internet-retail boom, because deals were too small. Weil Gotshal’s big deals include Prologis Inc.’s purchase this year of KTR Capital Partners for $5.9 billion. KTR was the firm’s client.
“Now the pricing has gone through the roof,” he said. “Industrial space has taken off because of ecommerce and conversions to residential.”
Just after the second big deal, Mr. Rosen said he had his “aha moment.” He drove down the New Jersey Turnpike, popping in on warehouses to see how ecommerce worked on the ground level. “It was very eye-opening,” he said. “They have robots that find the products in the aisle and bring it up front and wrap it and prepare it for distribution.”
The human beings still working at the warehouse were happy to show him around. “It didn’t even take 20 bucks,” he said. “It just took a smile and a please.”