Experts On Call Growth in Virginia's technology sector is driving a second wave of expansion among the professional firms that do the behind-the-scenes work.

Four of Hale and Dorr's Reston team (left to right): Steve Snider, David Sylvester, Jim Quarles, Brent Siler. Photo by Mark Rhodes

By Mark Davidson
The law firm of Hale and Dorr is no newcomer to the technology industry. From its offices a few blocks from the White House, the firm has done work for high-tech companies in the Washington, D.C., region for nearly 20 years.

In the past year or so, though, the partners have heard grumbling from clients in Northern Virginia’s fast-growing technology sector. "The commute between downtown and Reston has gotten so bad that people don’t want to come into town anymore," says Brent Siler, a senior partner with the firm. Its Northern Virginia clients wanted a change, he says. "There’s been so much development out there, people [were] saying, ‘When are you going to move?’"

So in February, Hale and Dorr’s partners sent more than a dozen lawyers from its high-tech practice to a 14th-floor suite in the new 18-story One Freedom Square building in Reston Town Center. Now clients who want more face time with Hale and Dorr counselors can get it. "I think the idea of having lawyers they can just walk across the street to is very appealing," Siler says.

"A very strong infrastructure is being created in Northern Virginia right now to support the high-tech development there," says Steve Snider, a senior partner with Hale and Dorr. "We wanted to physically be a part of that infrastructure."

Hale and Dorr’s move is part of a secondary wave of growth sparked by the expansion of Virginia’s technology sector. Today more than ever before, the state’s tech sector is being targeted by tech experts in law, accounting, marketing, public relations and a host of other areas, says Maxine Lunn, director of information services and technology policy for Virginia’s Center for Information Technology.

Support firms that just a few years ago didn’t even have technology specialists have beefed up their expertise. Some public relations firms, Lunn says, "are morphing into Web design firms, because even many of the high-tech companies contract out" for that work. And since so many tech companies are small start-ups, they need help from professionals in a number of fields. Support firms are trying to supply as many answers as they can. "There is a lot of integration going on," Lunn says. "When it comes to technology start-ups in particular, these [supporting] companies tend to want to be full-service providers."

The rising number of ancillary firms marks another phase in the region’s evolution, Snider says. "Silicon Valley didn’t reach the level it has reached without the panoply of support firms that have located there," he says. "The same holds true here in Virginia."

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Working with start-up firms requires more than just helping them untangle legal complexities. "You are not only their lawyer, but also a business advisor, a friend, someone with a shoulder to cry on," says Bruce Mendelsohn, a partner in the Washington office of Akin, Gump, Strauss, Hauer & Feld, a Texas-based law firm

That doesn’t sound like a long-distance relationship, does it? Mendelsohn’s firm will open a new office in Northern Virginia this year. "We believe ... we need a physical presence there to take us to the next level," he says. "You have to have people out there involved in activities, associations and frankly just running into people. All of that is important. It leverages our opportunities." It isn’t the firm’s first attempt to tap into the tech sector. In the past three years the firm has added 80 lawyers specializing in intellectual property.

Among the professions courting clients in the tech sector, law firms have perhaps been the most aggressive: Last year, nine major firms either opened new offices in Northern Virginia or announced plans to do so, according to The National Law Journal. The Palo Alto, Calif.-based firm of Cooley Godward opened an office in Reston last spring, as did the Boston-based firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo and the Chicago and Baltimore-based firm of Piper, Marbury, Rudnick & Wolfe.

Firms with stronger local roots have been moving, too. Washington’s Hunton & Williams in December announced plans to add new attorneys to its technology practice. About 40 of the firm’s 140 Washington-area lawyers are focusing on tech firms, says Thomas Cawley, managing partner of the firm’s Tysons Corner office.

One firm that has grown with Northern Virginia’s technology cluster is Reed, Smith, Hazel & Thomas, which has 100 attorneys. In the 1970s and 1980s, the firm’s focus was on telecommunications; since the mid-1990s, that has shifted toward Internet start-ups and later-stage tech firms. "Probably 35 to 40 percent of our work right now is in the technology area," says managing partner Benton Burroughs Jr.

Burroughs believes proximity is important because "there are a number of these larger clients that see no reason to cross the river for their legal service. The idea that a downtown Washington law firm is better is a myth to them."

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In April 1998, a small Internet start-up called homebytes.com opened for business in downtown Richmond with only one employee: founder David Clark. The idea behind the Web-based company was simple: help people sell their homes via the Internet without going through the hassle — or the expense — of a Realtor. "We are to the real estate industry what E-Trade is to Wall Street," Clark says.

Clark says his idea won the backing of venture capitalists. What he didn’t have was a staff to help with the array of related legal, accounting, marketing and other functions. So Clark outsourced almost everything. Deloitte & Touche handled accounting. Williams, Mullen, Christian & Dobbins provided legal services. The Martin Agency was his marketing and public relations firm, and HResources1 took care of payroll, benefits and hiring. All these firms, Clark says, are within walking distance. "It’s nice to have them a few blocks away."

Clark’s success in finding outside help illustrates the growth in the Richmond area of what Lunn of the Center for Innovative Technology calls the "indirect effects" industry. "When you’re a start-up, ... time is your number one enemy," Clark says. "You need to go to the people who have experience, who have done this kind of work many times before. Creating staffs ... internally and bringing them up to speed on these various functions is just not [as] time-efficient or cost-efficient as going out and, for a fixed cost, getting some of the best minds in all of these specialty areas."

The specialists Clark used for his Web page — the Richmond branch of Atlanta-based iXL — is one such company. In two years it has grown from 45 employees to 115, says Will Loving, iXL general manager. "The high-tech business in Richmond is really going gangbusters." In February, the company broke ground on a new building in the city’s Innsbrook Corporate Center. IXL has 14 branches in the United States and four in Europe, and last September it moved its Northern Virginia office from Arlington to Tysons Corner "in part to be closer to that [high-tech] corridor in Northern Virginia," Loving says. "We expect that the D.C.-Northern Virginia technology industry will grow rapidly again this year and we intend to be part of it."

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Bigger firms are not snapping up all the new clients in the technology sector. Sometimes, says marketing specialist Stephen O’Keeffe, the big firms are too slow to see an opportunity.

O’Keeffe had worked for some of Virginia’s largest advertising agencies, including the McLean-based Stackig firm. Before the mid-1990s, O’Keeffe says, most of the marketing and public relations firms in Northern Virginia were only interested in the business-to-government market, in which agencies marketed national technology firms to the federal government. But with more and more technology companies diversifying their own customer bases, and particularly with the rash of Internet start-ups, he saw the need for more business-to-business and business-to-consumer marketing.

In 1997, he started his own firm — O’Keeffe and Co. — and focused on the emerging information technology and telecommunications markets. "More and more people are doing business over the Internet, and that whole area has ballooned," he says. "As a result, we represent a number of these so-called dot-com companies." O’Keeffe’s firm does behind-the-scenes work. It will analyze a firm’s competition, handle Web design and set up e-commerce mechanisms. It also helps companies determine "how you get somebody to point to your browser in a very noisy online marketplace." The firm also does advertising and media campaigns.

The strategy has apparently worked. O’Keeffe started with one employee and one client. Today, it has 16 employees and more than 20 clients, about half of them in Virginia. The firm’s 1999 revenues were triple the previous year’s, O’Keeffe says.

He predicts a continued surge in professional support businesses in Northern Virginia — and perhaps in Richmond — that someday could rival what has happened in Silicon Valley.

Lunn agrees. The effect of the tech industry on business-service professionals has not reached its full potential, she says. "It is going to keep growing as long as the primary technology market is there to be served."