Southern California's Silicon Beach has been taking shape for years. The coastal strip that spans the distance between the Los Angeles International Airport and the Santa Monica Mountains is now home to hundreds of entrepreneurs and startups.

As more businesses flock to this fast-growing tech community, they have brought their lawyers along, into a legal ecosystem that has traditionally been known for serving the media and entertainment industry.

Santa Monica (Photo: Jason Doiy/ALM)

Since 2012, five tech-centric law firms—Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, Orrick, Herrington & Sutcliffe, Cooley, Fenwick & West, and Goodwin Procter—have all planted flags in Silicon Beach. (Goodwin has Boston roots, but the other four are all based in Silicon Valley.) 

These Silicon Beach pioneers all said they have experienced a growing demand for legal services from the region's fast-evolving tech community.

"The LA tech scene has really centered [itself] here in Santa Monica to an amazing extent," said partner David Young, a co-founder of Cooley's Santa Monica office. He said 40% of the local companies his office works with are within walking distance from its Santa Monica location, as are about 80% of the venture capital firms it works with.

Cooley, which opened that office in 2012 with four founding partners, was the first Silicon Valley firm to set up shop in the so-called Silicon Beach region. Over the years, the office has grown to a total of 46 lawyers. It now has about 90 employees in Santa Monica, the firm's only location in the Los Angeles region.

Dave Young, Cooley Santa Monica (Photo: Jason Doiy/ALM)

"Over time, we have definitely seen the market change," said Young.

Young said that the technology companies in Los Angeles now outnumber the lawyers on the market. He said that's largely due to the fact that most of these companies have turned to Silicon Valley lawyers for their legal needs.

A year after Cooley opened in Santa Monica, Silicon Valley-based Gunderson Dettmer set up a small office in the nearby Venice Beach area. Then, in 2017, Orrick also opened a Silicon Beach outpost, in Santa Monica.

And this March, Goodwin and Fenwick both announced they are opening offices in Santa Monica.

"In 2012, the idea was this is very much rooted in Santa Monica and Venice," said Mike Heath, who co-founded Gunderson Dettmer's Los Angeles office. "Now, the map is much broader, you go all the way down to Manhattan Beach and if not further south down to Long Beach, and then further south into Orange County."

Silicon Beach has grown to include Playa Vista, Culver City, Downtown LA, West LA and other communities that are home to an integrated network of startups and investors.

According to Heath, Gunderson Dettmer has grown its Los Angeles office from one lawyer to nine across the corporate, IP and fund practices. The firm said it is currently working with more than 115 clients in the market.

The Next Silicon Valley?

The tech community in Silicon Beach is already vibrant. According to a 2018 study by marketing agency Mediakix, which analyzed 177 companies headquartered in Los Angeles County, the area's tech industry is estimated to be worth more than $155 billion. 

And a few homegrown Southern California startups such as Snapchat, the Honest Co., and Dollar Shave Club have received billion-dollar valuations.

Snap Inc., the parent company of social media platform Snapchat, moved its headquarters from Venice Beach to Santa Monica last spring. In the last 18 months, a number of major companies with an entertainment bent have also moved into new Silicon Beach office space, and a few more are planning to do so soon. 

Google employees moved from Santa Monica into a remodeled 500,000-square-foot airplane hangar known as the "Spruce Goose" in Playa Vista. HBO, Apple and Amazon Studios are slated to move creative segments of their businesses into new office space in downtown Culver City later this year.

"The number of very large, highly valued technology companies today versus where it was five years ago is 10 [times bigger]," said Andrew Erskine, a partner in Orrick's Santa Monica office.

Erskine, a founding member of the office who has been practicing in Los Angeles his entire legal career, joined Orrick in 2000. He said the firm has been adding lawyers to its West LA outpost to accommodate the growing needs of the startup community in the region. He said the dynamic is different than in Silicon Valley.

"The tech industry is not dominating the entire economy of Los Angeles," Erskine said. "I think there are a lot of founders that are finding it to be refreshing to build companies in a place where people are doing a lot of different things."

(Left to right) Orrick partners Josh Pollick in the technology companies group, Alyssa Caridis in the intellectual property group and Andrew Erskine in the technology companies group. (Photo: Jason Doiy/ALM)

According to Erskine, Orrick's attorneys are working with a wide range of startup and tech companies in Silicon Beach. These companies are also driving a diverse pool of talent to the community. There's a perception that LA's tech scene is dominated by media and entertainment companies, he noted, but that's not necessarily the case.

"It is a pretty diverse group of industries from consumer products and services," he said.

Another reason West Los Angeles is particularly attractive for the startup community is its proximity to Silicon Valley, relative to other startup hotbeds such as Boston and New York. Silicon Beach is just an hour flight from Silicon Valley. While Silicon Valley is already crowded with big tech companies, entrepreneurs are increasingly finding Silicon Beach suitable for their big exit.

"If Silicon Valley is a fully formed tech economy, we are in the first third of that development at this time," said A.J. Weidhaas, who has been with Goodwin for over 25 years and recently moved to Los Angeles to chair the firm's Santa Monica office.

According to Weidhaas, Los Angeles has its own long-standing roster of venture capital and private equity firms, such as Marlin Equity Partners, which David McGovern founded in 2005. These investors have been paying more attention to the emerging startups in the region, Weidhaas said.

Furthermore, traditional wealth in Los Angeles has provided ample resources for early-stage entrepreneurs as they seek to raise seed funding, Young added. 

Reshaping West LA's Legal Ecosystem

The spread of tech law firms from Silicon Valley to Silicon Beach is creating a major shift in the Los Angeles legal community.

"It feels a lot like the early days of Silicon Valley, where you had a lot of practitioners who did a lot of different things," Weidhaas said.

Unlike Silicon Valley, where established tech-focused law firms have been cultivating lawyers in the emerging companies' space for years, the Los Angeles legal market isn't traditionally known for practices tailored to startups.

A.J. Weidhaas, chairman of the Santa Monica office of Goodwin Procter. (Photo: Jason Doiy/ALM)

"It is hard to find the specifically emerging-growth-company-focused tech lawyer," Weidhaas explained. "You'll find very capable lawyers who do a lot of private M&A, private company representation. They may do a fair amount in the entertainment space, and they will have a nest of emerging growth companies that they represent."

Since Silicon Beach is still primarily occupied by early-stage companies, most of the newcomer law firms in the region are focusing on corporate work for their startup clients. The practices in high demand include venture capital financing, M&A and initial public offerings.

"That's what Silicon Valley looked like relatively in the early days," Weidhaas said. "That will continue to mature like every other market, it will become more perfect, and people will specialize more and more."

In addition to an understanding of the emerging company and venture capital-related issues, Silicon Beach clients are increasingly requesting assistance in more specific legal areas, such as intellectual property, privacy and cybersecurity law.

Alyssa Caridis, a longtime IP partner at Orrick, said she has been splitting her time between the firm's downtown Los Angeles and Santa Monica offices to address startup clients' growing IP needs.

While downtown LA and Santa Monica are geographically close, "they are vastly different in terms of culture, and feeling and vibe," Caridis added. "So, having the presence here allows us to be more authentic, local people."

Looking Ahead

As the Los Angeles tech market continues to grow, it is likely to attract more out-of-town-based and national law firms. Firms that have already planted a flag in the region have said they will continue to expand there by hiring laterals or moving talent.

"We are bullish on the LA tech ecosystem," said Fenwick corporate partner Michael Brown, who is leading the firm's new Santa Monica office. "We think it will continue to expand and grow. I am sure there will be new and exciting companies opening in Los Angeles, or potentially even relocating to Los Angeles."

Fenwick has already relocated about 10 lawyers and legal professionals to Los Angeles, Brown said. With the two new additions last month, the Silicon Valley-based firm now has a total of 12 full-time attorneys in Santa Monica.

Goodwin, which set to officially open its Santa Monica this summer, also said it expects to have 15 or more technology and private equity lawyers located in the office.

"It is an earlier-stage field, it feels more entrepreneurial," Weidhaas, of Goodwin, said, comparing LA to Silicon Valley. "So, it feels more edgy. It is newer, it feels like what Silicon Valley did in the early 2000s."

And get real—it's not just the booming business driving legal talent to this section of the Golden State, Weidhaas noted. 

"If you are in Santa Monica and you can access the beach and the mountains within five minutes, it is a pretty nice place to be," he said.