AI Blitz Turns Kirkland Real Assets Practice Into a Hot Property

Michelle Kelban and Kevin Ehrhart are quoted in Bloomberg Law discussing how the AI-driven data center boom is driving demand for real estate legal work and fueling Kirkland’s expansion of its real estate practice with the formation of its cross-disciplinary “real assets” group to support AI infrastructure projects.

The boom in cutting-edge artificial intelligence is driving Kirkland & Ellis to hire partners for an old-school practice: real estate.

The partners are in demand because real estate investors, funds and developers are helping to finance the proliferation of data centers powering the generative AI buildout.

While data centers require huge tracts of land the lawyers’ work isn’t necessarily about just acquiring acreage. It entails the whole range of corporate transactions, including financings, acquisitions, and joint ventures.

Kirkland this month hired two real estate partners, with Wesley Smith joining from Willkie Farr & Gallagher and Anthony Mongone coming aboard from Ropes & Gray.

The firm hired 12 real estate partners in total in the past 12 months, according to data from SurePoint Legal Insights. Dentons has hired seven, which is the second highest among the top 50 law firms by revenue.

And that is just the beginning for Kirkland.

“You will definitely see more hires,” said Michelle Kelban, a New York-based real estate partner who joined the firm from Latham & Watkins last year. “You hear a lot about the talent war, and we plan to play to win. We are always in the market for top-level talent.”

Earlier this year, Kirkland paired its real estate practice with its infrastructure, energy and minerals/mining teams to make a 600-lawyer “real assets” group aimed squarely at the AI buildout. Kirkland Chairman Jon Ballis said at the time that the group formalized an approach that had been happening informally at the firm.

The group has been busy.

This week Kirkland advised CyrusOne, a data center developer and operator owned by KKR & Co. and BlackRock Inc.'s Global Infrastructure Partners, on a $1.25 billion commercial mortgage-backed security loan secured by six data center properties in North Carolina, Ohio and Texas.

Earlier this month, Kirkland advised Starwood Capital Group in raising more than $10 billion for a real estate fund that will target investing in data centers, among other assets.

The group also advised Joulent LLC, a tech-driven energy company that is developing a multi-gigawatt project to power AI growth, in a $1.75 billion minority investment by National Grid Plc’s commercial arm.

In a sign of the Kirkland group’s cross-discipline approach, each of those matters involved specialties that included real estate, corporate and energy partners. The firm, for instance, listed nine lawyers across three practices as working on the CyrusOne deal.

Kirkland formed the real assets team after the firm fielded data center-related deals stemming from various groups within its client base, said Kevin Ehrhart, a Los Angeles-based real estate partner. Sometimes a real estate fund would call a real estate partner; other times, an infrastructure fund would reach out to a project finance partner.

Kirkland learned that if a call comes into real estate, the firm can draw in staffing and expertise from beyond that desk, Ehrhart said. “It needed to be much more integrated,” he said.

Kirkland hasn’t yet seen state- or county-level data center moratoriums slowing the pace of the AI buildout, he said, though the firm is closely monitoring the issue.

Not surprisingly, the group is utilizing AI for its work, Kelban said. Within the last six months it hired a head of real estate innovation to deploy AI products across the practice. The group is piloting products that help with administrative tasks such as transferring titles or dealing with zoning, she said.

“There’s a lot more to come from Kirkland,” Kelban said, “in terms of how we’re using it and deploying it.”

Kirkland is far from the only firm that has found that data center work requires a large cast of characters. A handful of the largest firms have developed cross-discipline practices aimed at the space, including Simpson Thacher & Bartlett and Latham & Watkins.

It will be worth watching to see if that makes real estate partners a hot commodity across more firms.