For legal recruiters, the energy space has long been a steadily humming marketplace where multiple specialties sheltered under the power umbrella.
Then things blew up. Fueled by the explosion in artificial intelligence use—which requires immense consumption of electricity and water in massive, hyperscale and specialized facilities that aren’t always welcome in many communities—the data center boom has detonated, increasing demand for attorney experts in project finance, infrastructure, real estate, mergers and acquisitions, project development, regulatory compliance and litigation.
Legal teams whose collective know-how enables data center siting and connectivity also bear heavy and conflicting loads as they source land units, negotiate grid access and secure water for evaporative cooling—at the same time dealing with financing, NIMBY (“Not In My Backyard”) opposition and the need for regulatory buy-in.
“The lateral market is extremely hot right now for lawyers in the data center space,” says Nicole Kennedy, an attorney and seasoned legal recruiter in Texas. “Hiring firms’ goal is to draw together interdisciplinary teams able to face the complex challenges data centers present. Virtually every big firm is investing money and marketing their expertise on their websites. And there’s no sign of a slowdown.”
Lateral hires of partners with data center experience leapt by 65% last year and has grown 168% since 2020, according to business intelligence platform Pirical.
Kennedy, a principal at Atlanta-
based Principle Recruiting, adds that firms are willing to take lawyers who are inexperienced in data center work but have some relevant experience in one of the component specialties and train them up on everything else. In fact, the market is so hot that “top recruits are getting multiple offers with sign-on bonuses well into the six figures,” especially if they come with portable books of business, she states.
Illustrating the financial allure of the practice area, data center construction will require $5 trillion in total investment by 2030, according to a JPMorgan Chase & Co. analysis.
Artificial intelligence’s high-density computing racks are slavishly dependent on their ability to handle extreme power and thermal loads of 30 to 100 kilowatts each. (A standard IT rack consumes 5 to 10 kW.)
The growing adoption of AI has caused energy usage to spike, going from approximately 60 terra-watt hours in 2014-2016 to 76 TWh by 2018. In 2023, that usage hit 176 TWh—approximately 4.4% of the country’s total electrical consumption.
While some officials see data center construction as an excellent source of jobs, tax revenue, infrastructure reform and land use, not everyone is rolling out the welcome mat. Pushback is arriving from states, local governments, neighborhood associations and environmental groups. The single-minded land rush to build and bring online hyperscale facilities in regions with cheap land and power gave way to a more complex tangle of competing equities; and the entry of additional legions of legal talent—including government regulators, special interest lobbyists, land use litigators and generalists—focused on innovative approaches to sourcing electricity privately.
Artificial intelligence demands and land shortages in Northern Virginia focused legal strife over proposals such as the 200-acre Gigaland data center campus in Fauquier County and the controversial Digital Gateway project in Prince William County—a 2,000-acre development that would encompass 37 data centers and 14 substations.
“The decision-makers here have a hard time with the scale and scope of what big technology is wanting,” says attorney Christopher G. Miller, the president of the Piedmont Environmental Council, which advocates for smart growth and land use planning in the Virginia Piedmont. “The physical footprint of these data centers is only one one-hundredth of the problem. We have 19 gigawatts of power available in this state, and the data center builders need 70 gigawatts. How do you balance that?”
A coalition of landowners, backed by Miller’s group, challenged local government rezoning decisions that let the Digital Gateway project go forward on behalf of real estate acquisition entities serving hyperscale technology firms. Trial judges voided the zoning decisions, ruling the public was given inadequate notice of the board of supervisors approval meetings. In March, a state appellate panel affirmed the judges’ ruling.
“Can we slow it all down?” Miller asks. In a statement, he added that the appellate win was “another example of the growing grassroots power of Virginians pushing back against uncontrolled data center development.”
Lawyers are casting about for alternative solutions, such as the recycling of disused or abandoned land.
“We look for brownfield sites with access to transmission infrastructure that others may not find attractive, or legacy operating plants convertible to updated use,” says Justin Thekkekara, general counsel at PowerTransitions, a Houston-based company that acquires operating and retired power generation and industrial facilities to renovate and convert into data centers.
One current project is in Kansas City, Kansas. The Quindaro Power Station, a fossil-fuel plant that closed in 2019 due to environmental concerns, is now undergoing remediation and redevelopment into a new data center.
“It’s a case study in what can be done. There’s water and power nearby. It’s already an environmental liability, so we take a hazard and clean it up and make it beneficial,” Thekkekara says.
Sheri Bonstelle, chair of the land use and development practice at the Los Angeles law firm Greenberg Glusker, points out that California is getting creative in seeking new sources of power for data centers’ unquenchable needs.
“The state legislature is supportive of renewables like geothermal and fusion power,” she says.
The Imperial Valley Geothermal Project, a complex of 10 geothermal power stations in the Salton Sea region known as “Lithium Valley,” integrates power generation with lithium extraction and aims to expand to a 600-megawatt plant to power data centers.
Bonstelle adds that state lawmakers are also encouraging wind and solar renewables to amplify grid availabilities by exempting or streamlining projects to avoid the regulatory delays caused by the stringent California Environmental Quality Act.
“The data center lobby here is working nonstop, and the legislature is trying to be friendly to their needs while maintaining a balance with environmental concerns,” she says. “Data centers are the future.”