Why Property Tech Might Be the Next Frontier For Legal
Investment in real estate technology is on the rise, and developers, landlords and other professionals are looking to their attorneys to help keep them abreast of the latest developments in the space.
March 18, 2019 at 09:33 AM
4 minute read
The three rules of real estate are location, location, location. But the fourth one just might be technology, especially for lawyers who are looking to remain or become the go-to resources for the growing number of clients taking an interest in property technology (“prop tech”).
For the uninitiated, “prop tech” is an umbrella term for the place where real estate and technology meet. Standing under that umbrella you might find everything from software that automates lease corrections to an app that instructs a tenant where he or she can find the pizza parlor closest to their new apartment building.
To be sure, such tech isn't just for attorneys. After some initial hesitation, developers, landlords and other real estate professionals are finally arriving at the technology party and would really like to help plan the next one, too.
“Our clients… are learning about and implementing more evolved technologies and as they do so want to get in on those technologies at the ground floor both to make sound investments but also to better the real estate experience at an earlier stage,” said Benjamin Hittman, an associate at Goodwin Procter.
Goodwin launched a prop tech practice last fall after noticing a substantial amount of cross-utilization between its technology and traditional real estate practices. The firm's website includes statistics taken from CRETech that show global venture capital investment in real estate technology growing from $1.8 billion in 2015 to 11.2 billion in 2018.
So why is prop tech suddenly so hot? Blake Liggio, a partner in Goodwin's Real Estate Industry Group, think that it's due in part to the accelerated development of technological assets geared toward innovations in real estate.
“It's sort of this last frontier from a technological perspective from an industry that obviously is the largest industry on the planet, and so I think its just a spot where venture capital sees a lot of growth in the next several years,” Liggio said.
Better development could help to drive adoption of prop tech inside law firms too. Gabriel Safar practiced as a commercial real estate attorney before co-founding LeasePilot, the company behind the lease-drafting solution of the same name.
He thinks that many real estate tools aren't designed with lawyers in mind. “Most technology is created by engineers and people that have an understanding of some big benefit or the generic concept of efficiency. But the tools that are being created actually make the end-user's life harder,” Safar said.
That doesn't mean that law firms won't continue to try and incorporate prop tech, though. Giving up isn't exactly an option. Safar pointed to an increasingly crowded marketplace and the desire—or need—for a competitive edge as drivers that make both law firms and real estate companies more willing to look to the future.
Pressure from clients doesn't hurt, either. “[Clients] want stuff done fast, and they can't understand why lawyers can't do it faster. They don't realize that lawyers are using a cell phone from 1993, and they think that lawyers are using an iPhone. There's this fundamental disconnect,” Safar said.
In this case the “iPhone” is automation software that can make key changes inside a 100-page lease while potentially cutting down on errors. Still, lawyers aren't just going to get away with delivering faster leases.
Clients who approach the prop tech team at Goodwin are looking for a more holistic understanding of how technology can be a boon to their business. For instance, a landlord who wants to distinguish his apartment complex from all of the others on the market might inquire about tech that can be used to enhance the tenant experience, like an app that lists all of the nearby restaurants or attractions.
There are also tools that can directly impact the bottom line by measuring key variables inside a property such as energy efficiency. Hittman said that because real estate can be a very narrow industry, those clients look to them to gauge what's available and what's just around the corner in the world of tech.
“There's a lot of real estate investors and developers who are looking to do whatever they can to get ahead of it,” Hittman said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250