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Gunderson Dettmer’s move to Austin, Texas, tests whether a Silicon Valley law firm can build a client base in a second technology-driven city far from its first success.
“The national market should be careful,” said Kate Reder Sheikh, general manager of the law firm Major, Lindsey & Africa. “There is a belief that there can be something that is like a Silicon Valley in the Austin area.”
Law firms are flocking to Austin, attracted by the growing presence of companies like Nvidia Corp., Roku Inc., and Cloudera Inc. Some tech companies are fleeing Silicon Valley to create lower costs, shorter commutes, and a community where workers want to live .
Kirkland & Ellis, Latham & Watkins, Quinn Emanuel, Urquhart & Sullivan and O’Melveny & Myers announced the opening of offices in Austin this year. Gunderson’s move has drawn special attention due to the company’s reputation for working with emerging technology companies.
“I think Austin makes sense for them, given Gunderson’s strong focus and market position in venture capital and emerging businesses,” said Lisa Smith, law firm advisor at Fairfax Associates. “You have a reputation for competing for this work.”
‘Incredible’ growth
In the five months since the Gunderson Dettmer Stough Villeneuve Franklin & Hachigian LLP office opened, the firm has worked on venture finance, mergers and acquisitions, and strategic commercial transactions, said Wesley Watts, founding partner at the new location. The move marks the company’s second run in an Austin office.
The company’s nationwide clients include Austin-based venture capital fund Ironspring Ventures and California-based Dragoneer Investment Group, which led a $ 500 million investment in online gaming platform Discord in September.
“Austin is certainly going through an incredible period of growth,” he said. “The number of customers and the demand for services from those customers in Austin and the surrounding area really makes sense for us to have Boots on site.”
While not a big law firm, Gunderson is a powerhouse and masters everything to do with emerging businesses, Sheikh said. The move of such a proven brand from Silicon Valley sets it apart from bigger competitors that have moved to the city, she said.
“A company that is not as big as some other companies – an office in every city – chose Austin,” said Sheikh. “It’s a total confidence boost in the Austin market.”
‘Silicone hill’
Austin has a long history in the technology industry when Michael Dell founded what is now Dell Technologies Inc. in the city in 1984. A recent wave of tech companies moving to Austin has led some to refer to the city as “Silicon Hills”. ”
In December 2020, Oracle Corp. announced to move its headquarters to the city. Other tech companies with major centers in the Austin area include Tesla Inc., Google by Alphabet Inc., Apple Inc., and Facebook Inc.
It remains to be seen whether the city, which is a fraction the size of Houston and Dallas, has enough business opportunities to justify the influx of new companies. Gunderson previously had local lawyers in Austin, led by Brian Beard, who joined Wilson Sonsini as Managing Partner in 2002.
“Using an Austin outpost as a vehicle for recruiting talent is a legitimate strategy,” Austin-based legal recruiter Robert Kinney said of Gunderson, whom he called “a great company.”
“But I haven’t heard from them about an acute growth desire in Austin, which is a pretty strong indicator that they intend to take it slow.”
The Austin office represents Gunderson’s approach to growing where his customers are, Watts said. Gunderson had Austin clients in the life sciences, technology and private equity sectors years prior to opening the office, he said.
“The clients we work with in Austin range from early stage companies where you might have two founders, a cat and an idea, to very mature late stage companies preparing to go public,” said Watts. “And everything in between.”
Home culture
Watts, a native of Austria, and five employees work in the company’s temporary office in the city center. The office will soon hire at least two more lawyers, he said.
When it moves to its permanent space, Gunderson plans to mimic the home office culture in the Bay Area, Watts said.
Partners and associates sit together on the floor and have no offices in the traditional sense, which reflects the culture of the tech industry. Watts said he joined Gunderson because of the Vinson & Elkins LLP culture.
Strategically, the Austin office is a starting point for future expansion in the region, said Watts. He declined to say where future offices might be. Watts said that while the Austin office is currently the only one of Gunderson’s in Texas, “truly is a regional vision” for an area that is becoming increasingly prominent because of its technology activities.
“The rest of the country certainly noticed, including Gunderson,” said Watts. “That says a lot about where Austin is. Not just Austin, but the region itself. “
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https://news.bloomberglaw.com/business-and-practice/silicon-valley-law-firm-sees-austin-return-as-new-launch-point
