Transcript:

Intro: Welcome to Disputes in Perspective, a Reed Smith podcast. This podcast series will discuss disputes-related trends, hot topics, and developments occurring in the global legal landscape, and hopefully provide you with some helpful insights and practical tips. If you have any questions about any of the episodes, please feel free to contact our speakers. 

Adam: Welcome back to the podcast. I'm Adam Massaro in the Denver office, and I have a special guest joining me. Camille, please introduce yourself. 

Camille: Hey, I'm Camille Bacon-Schulte, and I'm also a partner in the Denver office with Adam. 

Adam: And we are both founding partners at the Reed Smith office in Denver, and both had a chance to join early this year. Camille, how's it going so far? 

Camille: It's been going great. Yeah, it's a great group we put together in Denver. The rest of the firm has been really welcoming. It's been a really seamless transition. 

Adam: You were in private practice before this, right? Yeah. 

Camille: Yeah, I've only ever been in private practice. 

Adam: All right. And had you had a chance to form or found an office before this one? 

Camille: No. And actually, the fact that it was a, you know, found an office opportunity is really sort of what drew me in in the first place. I think that's really special. It's a, you know, a great opportunity you don't get very often. 

Adam: What is your practice area? 

Camille: Real estate. Really broad real estate. A little bit of everything. 

Adam: And within that, then, have you always done real estate or have you done any other type of corporate work as well? 

Camille: You know, I started in environmental, and it was just a little too litigious for me. It was a lot of fighting with the EPA, and that didn't sit right. And then I just sort of fell in love with real estate along the way. And I just love how collaborative it is. 

Adam: When you heard about an office being founded by Reed Smith, what were some of your expectations going into it? 

Camille: Well, it's an office founding, and it's the first time Reed Smith has been in Denver. So, you know, I think I had the same expectations that all of the rest of us partners had, which was that we really need to hit the ground running and make a name for ourselves in the community and sort of build up a presence and a reputation. So that was sort of the expectation of my role going in, just leading with the best foot forward and building the right teams for the right clients. 

Adam: Now, I know you've lived in some interesting spots over the years while still maintaining private practice. 

Camille: What are some of the spots that you've lived in over the years? I started practicing in San Diego, moved back to Denver briefly, and then spent five years working remotely from a little village in Alaska, right outside Glacier Bay National Park. Middle of nowhere. True Bush, Alaska. You've got a boat or fly in. We get all of our electricity from a waterfall. Um, so that was, that was interesting. Um, and, uh, you know, I've, I've closed deals running my wifi on a generator because we've had a power outage through the whole town. Uh, not that I've ever told anybody that, um, but it can be interesting, but it's, it's totally doable. I think remote work, um, in the real estate practice is, is it goes well together. 

Adam: You know, it's funny you say that I was just on vacation and we obviously did have some things for an expedited filing we had to do, we were en route from the mainland to an island. And so I was able to use Wi-Fi there. I got to the island. And then later on in the day, there was even a pocket where I found a little spot to get out a few things. So it's interesting to sort of see both finding those spots and being creative at the same time. But I think there's a way to balance too. It's just a matter of figuring it out as well. And if you're committed to, I think you can do it. 

Camille: Yeah, absolutely. You know, it's interesting, too, especially with sort of broader remote work, because I do think on some levels, you know, practice is tough. And it's especially if you've been in there over a decade, it definitely takes its toll. So I think some of the ability to maintain is to have that ability to be able to check out and be in those different spots. How have you used things outside of work to balance the obviously the ongoing stress that is work as well? 

Camille: Um, you mean like the dreaded work-life balance buzzword or just sort of like generally how you maintain an active practice in remote places? 

Adam: Well, I think on the latter point, uh, in remote places, obviously some people, there's a concern, right? That, you know, you have to be with your, with the people and the decision makers in person. So on that point, you know, what, how do you, how do you make it work? Or how you make sure that you instill trust so that people feel like you can be accessible in that environment. 

Camille: You know, I get in some ways where people are coming from when they have that concern, but in others, it doesn't resonate with me personally because my practice is so national. So even when I have practiced from an office and I have for about half of my career been in office. I wasn't often working with people physically in my office Even before the pandemic and before Zoom was so popular, you know, I was conference calling with people in, you know, Kansas City or, you know, Houston or somewhere in California. And so I was working across a lot of different offices within the same firm anyway. And so for my practice, at least, even if I'm physically in an office, I'm not usually working with someone who is, say, down the hall from me. So whether I'm in another office or I'm in Alaska or right now I'm in Steamboat Springs in Colorado, it's not really different. Maybe there's a greater distance between us, but we were never, you know, next door to each other. Um, and, and oftentimes our clients are really far away as well. You know, we'll have clients who are based out of New York and we're doing a portfolio acquisition, for example, of properties across the country. You know, even if I were physically in the Denver office, I wouldn't be, you know, face to face with that New York client on a day to day basis, um, anymore if I'm sitting there, if I'm sitting in Alaska. So to me, at least for my practice, I just have never felt like it's that different if I'm sitting in an office versus I'm somewhere remote because it's so national. But I will say I think that is a little bit different in our situation because we are starting an office and we're sort of building up our Denver firm culture. And so I do think right now it's more important to be in office at least a little bit just to get to know everybody and figure out, you know, how we can support each other's practices. So there is sort of that as well. But I'm definitely a proponent of remote work. 

Adam: And then on the flip side, obviously, work-life balance. You know, in my view, it's a lifestyle. It's hard to just turn it off in that respect. And also if you want to do complex work, you know, just get to turn it off. That's the upside of all the complex work is that complex problems don't just solve themselves between nine to five. But at the same time, that can be grueling, especially a decade in or longer. So what do you do to balance those two things? Because those two worlds don't seem like they can be reconciled all the time. 

Camille: Well, it's interesting. And I think that is one of the things that's harder when you're remote because your office is your home. And so you don't have that separation of going home at the end of the day. But also, a lot of my clients really expect me to be available to them, not 24-7 necessarily, but certainly if there's a question that comes up after hours. So, you know, whether I'm working from an office or working from home, I'm still checking my email, you know, after dinner. I think it's important, though, to set boundaries. Like people are going to respect your time as much as you respect your time. So I'm really careful to block off time to, you know, pick up my kids from school and have some time with them right afterwards and, you know, for dinners and bedtime and all of that. And I think you just have to really just be upfront with your colleagues and your clients that those times are family time and you're going to wear your mom hat during those hours. And if something requires your attention before the morning, you'll get back to it when you can. And just getting out. If you've got a break of 30 minutes and you know that your inbox is going to be silent, just get out. Take a walk. Don't be glued to your desk. But it's different for everybody and everybody's practice is different. So I think it's just important to find what works for you and just be really open with everybody so everyone has aligned expectations of when you're going to be available. Adam: We're in Colorado so what's your go-to winter sport. 

Camille: Um well I'm still on the fence between snowboarding and skiing. I've been doing both which is good and bad they're really different and I'm not getting as good as quickly as I might if I just stuck to one, um but uh yeah one of the two um. And I'm in Steamboat Springs and then Howelsen's right across the way and they do this great program where you can just go ski for free on your lunch break if you're local um which is great because I can just pop out. It's five minutes, get a couple runs in, come back, log back on, it’s great. 

Adam: And then summer what's the go-to sport? 

Camille: Um, I don't know. I, the Yampa River is pretty great. Um, I've been trying my hand at river kayaking, which is really different than ocean kayaking in Alaska. Um, so I'm still getting the hang of it. Uh, there's definitely been a lot of embarrassing moments, but, um, it's really fun. It's really fun. 

Adam: And then last item on Steamboat, what's the go-to restaurant for the locals? 

Camille: Oh gosh. I don't know. I really like Cyprus right now. I wouldn't, I wouldn't necessarily say it's purely local, but it's got a fun menu and it's got a good vibe. 

Adam: Getting back to your practice, so real estate transactional work, but within there, what's the focus? 

Camille: You know, in recent years, it's been a focus on a lot of data center work, and it's not necessarily one sort of product for data centers. I do a lot of leasing and development operations, also some acquisitions. Within that, you've got, you know, environmental aspects, you've got entitlements, you've got infrastructure, power availability. There's a lot of moving pieces, which I think keeps it really interesting. And the data center space is just constantly growing and it's super national. There's pipelines, you know, Texas, Virginia, Ohio, everywhere. And so it's just been keeping me on my toes for the last couple of years and it's been really fun. 

Adam: How did you get into that area? 

Camille: Um, you know, I was a senior associate and a partner came into my office and said, here, do this. And then I just clicked really well with the client and with the type of work, and I've just stuck with it. 

Adam: Is there an analogy? Is it resort development? What is data center like in the more traditional sense? 

Camille: You know, it is kind of similar to, you know, before I did a lot of data center work, I did project finance. And a lot of times we were building, you know, these big resort facilities where there's a hotel, maybe a casino, maybe a golf course, a bunch of different stuff altogether. And one of the big things was, you know, do you have power? Do you have the lines put in? Do you have water? Do you have, you know, wastewater, sewer, all of that to support these structures that you're building? And then there's questions of construction finance and certain, like, funding components. And data center work is really similar. Even though it's just these big data halls, they require a ton of water for cooling. Obviously, you need a ton of electricity, which is becoming more of a hot-button issue. That's affecting negotiations and sort of changing the market right now. Privacy is a huge concern because a lot of stuff that's in the data halls is very confidential to the operator. So, it can be really similar. Just the final product is obviously very different, but a lot of the concerns are the same. 

Adam: And when it comes to data centers, obviously, you've got the land. Who are some of the other kind of players that kind of all have to come together in these negotiations? 

Camille: Yeah, so it kind of depends. What I'm seeing a lot of right now is rather than the operator acquiring the land and developing it themselves, they will lease the land long term from a landlord who is also going to develop the project. And so you've got that other player. Usually, the landlord is going to need construction debt. So you've got a lender, you have to consider their position on, say, lease terms. And then the other big player that's coming in more strongly than ever before is the energy provider, so the local utility. And so you've got those four parties that all have to be comfortable with the way the deal is structured. And it can get pretty tricky and it's getting trickier just because, you know, the market's a little wonky, lenders are getting a little bit more tense about lending out such huge sums of money and because data centers are so dense on the ground, in certain areas, the utility providers are reluctant to commit to providing, you know, X amount of power before a building is constructed, which is obviously a problem for both the operators and the lenders. 

Adam: And when it comes to the local city government authorities, things like that, are they involved as well? 

Camille: Yeah, they're involved as well. Sometimes there's incentives. It kind of depends on where it is, whether or not you need a zoning variance or something like that. You've got to consider noise ordinances. You know, those come into play. For big campus developments, you often want to go before the various parties in the city government to ensure that you've got the community support. You need and that you've got like, you know, tax credits in place or whatever you're going after. So they're definitely involved. But I would say they're less involved than in some other projects. And that just might be a function of, for example, I'm doing a lot of work in Texas right now. And oftentimes the land that we're scouting is not within the city. It'll be in an unincorporated portion of the county. And so then a lot of the city's regulations just don't apply. So we've been less involved with them just for that reason going forward. 

Adam: Typically, how early are you involved in the process? 

Camille: Really early. You know, most of my clients sort of negotiate terms on their own and then come to us to paper it. But we come in when it's just a patch of dirt somewhere. I did a huge project out in the desert, and it's literally just dirt. And you got to get water there and you got to get power there and you got to get everything built. And we're there from day one, clear through to, you know, the end of construction and getting it operational, which takes years, you know, maybe even as many as 10 years if it's a big campus and it's going in phases. So pretty much start to finish, which is great. It's really fun. 

Adam: So geographically, it sounds like you have some projects in Texas. What are some of the other regions you're working in? 

Camille: The D.C. region near Virginia is really hot right now. Obviously, California. We're seeing more stuff in Ohio. I've got a deal in Mississippi of all places right now. So it's pretty spread out. Nevada, Arizona. I want to say everywhere. There's probably some places where it's not, but they're few and far between. 

Adam: And then as far as I understand magnitude of these data centers, what's the best sort of way to think about the sheer size with a footprint perspective? 

Camille: Well, I mean, footprint is huge, of course, but I think the metric that I like to use is what is the cost to the client? Because obviously, you know, the developer's developing it, the landlord's developing it, whoever's developing it, but they're paying for that construction either upfront or amortized over the initial term of rent as base rent. And each building is about at least $500 million if it's a hybrid lease, which is a slightly different thing. It's over a billion every time. So if you're doing a 12-building campus, that's easily $12 billion of spend for your client. So these are huge commitments, and they've got more work than they can handle. They're just constantly going and constantly building, so it's just huge. 

Adam: Obviously, you've got a lot of different players. On the legal side, there's folks like yourself that focus on the specific industry and have that knowledge. What are some of the other lawyers at Reed Smith you work with on these projects as far as their specialties of focus? 

Camille: Yeah, so sometimes in Texas, for example, we'll get very focused in on a really local issue, such as, you know, say, in Texas, oftentimes the surface estate and the mineral estate have been severed a long time ago. And so we'll have someone local in one of the Houston or Dallas offices come in and say, okay, here's what we think this looks like. Here's how to protect your surface rights going forward, notwithstanding these mineral rights that are below you, things like that. Um, environmental, like I said, is always a piece so we can loop in the environmental team, which is great. Um, sometimes you'll need just more local support. So I'm licensed in a bunch of different states, but I'm not licensed everywhere, obviously. So occasionally I'll need advice for, you know, a land use issue in Pennsylvania, for example. Um, so I'll go to, uh, the person at the firm who, who does that work. So it is naturally really collaborative because there's just so many moving pieces. You know, and I work with power a lot, too. We don't generally negotiate the power acquisition contracts directly. We're involved in sort of handling that from a larger picture perspective. But I like working with our power team to sort of better understand, you know, what's market? You know, why is the energy provider trying to, like, put in this sort of condition, that kind of thing? So as a consultant, they're just super useful and they've got just a ton of knowledge, which is really helpful. 

Adam: You know, it makes me think a little bit about, I've done some litigation on big natural gas processing midstream plants, which is kind of a similar huge CapEx projects, tons of things going on. And you similar deal, you're starting from scratch from dirt and moving up. Flip side of that though, is when you have that many contracts, that many players, you know, the risk of litigation is very, very high. And yet at the end, you have a very, very valuable asset that, you know, has obviously a recovery against. So myself on the litigation front, I've obviously seen it at the worst, but how do you take steps to try to mitigate that risk on the front side? 

Camille: Well, you know, one of the ways we do that, and, you know, this works again because most of what I do is, you know, leasing and then development and then operations. Just having the right terms and remedies in the leases is huge. So for example, in all of my leases, we have provisions for power interruption or power downgrades. Obviously, there's an interruption of power. You can run your generators for like a day or two. And that's just due to environmental regulations. You can't run them continuously. So you're going to be out of power. If you're out of power, you can't operate and you're basically sitting possibly in the middle of a desert with this giant building that you can't do anything with that you've paid a billion dollars for. So that is a huge issue. too. So making sure there's provisions in there to say if the power cuts off or if it's downgraded, suddenly you have a lot less, even if the landlord wasn't responsible for that, like it's totally out of their hands, you know, whatever. They're still on the hook for it. And if that happens and they can't get it back online within 24 hours, then we have remedies such as rent abatement or being able to just terminate straight up and walk away, at which point the landlord doesn't recoup all of their development costs, and we are also not out of pocket. So that's a big one. Also, generally speaking, we're not going to start paying rent until you get to substantial completion. So we're not really coming out of pocket until you get to substantial completion of the construction. And you're not going to reach substantial completion until power is there, the water is there, all the other utilities are there, hooked up to the building, operational at the capacity we need. And so that's another way we mitigate the risk. So really what we're trying to do is give our clients enough, I guess, teeth and the right remedies so that they're never in a position where they're having to pay hundreds of thousands of dollars a month in rent for a building they can't use. And so they're not really getting to that point of needing to sue a landlord or, you know, anything like that. Obviously, it probably does happen, you know, knock on wood, it hasn't happened with any of my projects yet. But, you know, the other thing is just sort of the general all lawyers do this is where, you know, you're negotiating a deal, you're looking at the deal points, you're assessing risk, and you're sort of trying to figure out, okay, what are the risk points? Understanding what really matters to the client. Like, you know, confidentiality is another huge thing. And we have a lot of provisions around that. And if I think there's a gap and we just can't fill it for whatever reason, just making sure the client really understands what that is and it's comfortable. Because I think litigation is much more likely if a client feels blindsided by a problem versus if they've talked about it, they've talked through it with their counsel, they sort of raised it at the higher level when they're getting funding approval before, you know, hitting go, then it's like, okay, bummer, it actually happened. But we sort of prepared for this, we built it into our assumptions and our risk calculations. And so, you know, if you can't negotiate and draft around something, I think just making sure that the client is aware of potential issues and has thought about them is the best way to avoid litigation long term. 

Adam: And then I'm curious, obviously, since the framework is an international platform, are we doing data center work outside the U.S.? Is that something you're getting involved in yet or not? 

Camille: You know, we do. Our main data center client is a global hyperscaler, and they prefer to remain confidential. But they do a ton of work in Europe as well as the U.S., probably in a lot of other places as well. They also do a ton of sort of data center adjacent work that I know is sort of more prevalent in our European offices. So it's definitely international. You know, the client relationship lead for this particular client is based out of London, for example. So I think they actually probably did more European work to begin with. And we've just sort of started expanding into the U.S. recently. 

Adam: I see. To wrap up here, obviously, you're a partner, and it's always interesting to me, sort of path to partnership. So, you know, was there a moment where you realized, you know, that was both the goal and it was achievable? Or how did that hit you as far as sort of you made that investment to take it to that next step? 

Camille: I’ll answer this one honestly, and you might want to edit it out. You know, I have always had my best advancements by strategically lateraling to other firms. It's just the best way to do it. You know, there's people that stay at the same firm forever, and they'll make it eventually in, you know, eight years, 10 years, 12 years. I very strategically allowed myself to be poached by Kirkland and Ellis when I was about a sixth-year associate. Their model is to advance their associates to partnership after six years. So after about a year trial period with them, it was just their model to advance me to partner. And so I got to be a partner with them for a couple of years before I decided it was time to strategically move on. And, you know, by doing that, you know, I'm 10 years out of law school. I've been a partner for about four years now. You know, I have people from my same cohort that are just now maybe making counsel at their firms. So I think it's just being strategic. I mean, obviously, no matter what your strategy is, if you can't demonstrate skill and, you know, dedication to your clients, it's not going to work out. I think you have to really want it. And some people don't. And I think that's fine. I think the expectation coming out of law school is, oh, I'm going to go to a firm and I'm going to make partner and it's going to be amazing. And if you don't have that sort of goal in mind, that's fine. If you had that goal and it's just not your goal anymore for whatever reason, I think that's fine, too. I just sort of always stuck with a goal and worked towards it in a way that I knew would work for me And it's been great. I think it's great. And then I think as a partner, obviously your goals are really different and there's the obvious stuff, but I think, sort of the less obvious is building really good teams and training your associates and like putting in the time to actually give them the training and mentorship that they need, so that they, you know, feel like fully actualized lawyers rather than secretaries just like editing documents based on something you handed them. That's the worst. That's like the first year stuff. So, you know, it's a good place for me because, you know, associate development is something I feel really strongly about. So I enjoy the role. 

Adam: And you think you're gonna stick around to Reed Smith. 

Camille: Yeah, no I’ve moved enough now that like like genuinely I was telling my husband I was like i'm not leaving again. Like if I get fired or something i'm just retiring from the law like I’m done making new friends. I’m not this social like this is this is a really good fit. I really like our people, the clients are great, um I was lucky enough that one of my main clients was already here as well so that was a really smooth transition. Like I'm not, I'm not going to roll the dice again. So I'm here until I retire, I get fired. 

Adam: That's always a good spot. It's funny how, you know, I'm similar. Obviously I've made moves and I think strategic moves are part of the business more so than ever before. But the flip side is that's also sometimes you have to move to get the level of independence to develop on your own because you have to consider, I mean, is there somebody over top of you that is an issue? Are you at an ability where you can hire associates and grow? So it's an interesting dynamic. But after a couple of them, you also realize that, you know, they're ultimately, you get a much better sense of what you do want and don't. So I think it's like, are you going to marry your first lover? Are you going to date a little bit before you settle down? But when you know, you know, which is always a good thing. 

Camille: Yeah. Yeah. I said that once in an interview, I was like, look. You spend more time with your firm than you even do your family, especially in the early years of practice, it's like a marriage. And you shouldn't stick in a bad one. So if it's not the right fit, explore your lateral options. Try again. Don't feel like you have to stay somewhere just because it's the first place you landed. And yeah, it's been good for me. And there's always a reason to move. It's not always just strategy. Sometimes it's just growth potential. You know, I worked for a little boutique in Denver for a while, and it was great training, But they were so regional that the clients I wanted to bring in, we just didn't have the right people for it. And so a more international and just talented platform like Reed Smith is great because you just don't run into those sorts of walls that you might at a smaller firm. 

Adam: Well, excellent. Well, that's our time for today. So I appreciate you joining. And we're a wrap for this podcast. Thank you, Camille. 

Camille: Yeah, of course. Thanks for having me.

Outro: Disputes in Perspective is a Reed Smith production. Our producers are Ali McCardell and Shannon Ryan. For more information about Reed Smith's litigation and dispute resolution practice, please email disputesinperspective@reedsmith.com. You can find our podcast on podcast streaming platforms, reedsmith.com, and our social media accounts at Reed Smith LLP.

Disclaimer: This podcast is provided for educational purposes. It does not constitute legal advice and is not intended to establish an attorney-client relationship, nor is it intended to suggest or establish standards of care applicable to particular lawyers in any given situation. Prior results do not guarantee a similar outcome. Any views, opinions, or comments made by any external guest speaker are not to be attributed to Reed Smith LLP or its individual lawyers. 

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