Texas Space Boom Requires Lots of Lawyers in Boost for Firms

Lawyers are as necessary as rocket fuel for legally complex space ventures, so as launches proliferate in Texas, so does the work for law firms.

The firms are helping private companies license satellites, execute contracts to fly in low-Earth orbit and resolve intellectual property disputes tied to cosmic endeavors. They have built space law practices to handle the work, and some expect to grow them in coming years.

“When you think of Texas, people think of energy, healthcare, and international trade as the top three industries,” said Michelle Pector, co-chair of the estimated 100-lawyer global aerospace and defense team for Morgan Lewis & Bockius. “But the space industry is now in the big three” combined with defense, displacing trade, she said.

Firms that once relied on government-run NASA missions to help fuel Texas legal practices now have a larger and broader pool of work to draw from, thanks to efforts by companies including Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin.

The modern space era requires private lawyers for regulatory compliance and licensing, contracts for manufacturing satellites, launch-service agreements, and securing funds for financing projects, said Diane Howard, who teaches a course on space law at the University of Texas School of Law in Austin.

“There’s a huge ecosystem” of legal work tied to space, said Howard, former director of commercial space policy at the National Space Council. “A huge piece of space law work is the financial instruments that make these things possible—putting together the different series rounds for financing, the different kinds of agreements.”

That’s been a boon for firms such as Baker Botts, Morgan Lewis, Kirkland & Ellis, Latham & Watkins, and Holland & Knight. Latham advised Houston space exploration company Intuitive Machines to go public in a SPAC deal in 2022 with a near $1 billion valuation.

Baker Botts helped Dallas-based manufacturer Precision Aerospace Holdings, whose clients includes NASA, SpaceX and Blue Origin, acquire Clearwater Engineering in March. Kirkland assisted Firefly Aerospace, the rocket and lander developer in Cedar Park, Texas, in August with a $1 billion initial public offering. And Morgan Lewis represented SpaceX, winning a Fifth Circuit case this year to freeze an unfair labor practice case from the National Labor Relations Board.

Bulking Up

Texas has been near the front of US space efforts for over a half century, mainly through NASA’s Johnson Space Center in Houston. President John F. Kennedy said, “We choose to go to the Moon” in a famous speech at Rice University in Houston in 1962.

Actor Tom Hanks cemented the state’s ties to space in popular culture when he said, “Houston, we have a problem” while portraying astronaut Jim Lovell in the 1995 movie about Apollo 13’s ill-fated mission 25 years earlier.

In the last two decades, the state has become a test site for SpaceX, Blue Origin, Boeing Co., and Lockheed Martin Corp. Along with private ventures, companies are supporting NASA’s plan to return to the Moon under the Artemis program.

“Texas is going to be the epicenter for all space activity going forward for the United States and frankly for the world,” said Travis Wofford, who as chair of Baker Botts’ Houston corporate department represents private companies in the state’s space industry.

Firm Practices

Baker Botts created its Air and Space Tech practice two years ago and has roughly 25 attorneys who advise on the launch of space startups, secure IP patents for technologies, and connect private space companies with government funding, Wofford said. It also has clients in the emerging lunar mining industry, he said.

Some firms launched official space practices after CitiGroup in 2022 forecast a $1 trillion space industry by 2040.

DLA Piper in 2023, for instance, announced its Space Exploration and Innovation Practice. Morgan and Lewis formally started a space and satellite practice in 2023. Pector said she expects to grow it beyond the 12 lawyers doing space work in Texas in coming years, though she didn’t say by how much.

Latham has more than 100 lawyers in its aerospace sector and created an internal working group that involves space projects. Law firms are benefiting from a growth in ventures that have demonstrated working technology, reliable use cases and contracts with creditworthy parties, said Nick Dhesi, managing partner at Latham’s Houston office.

“The companies driving those projects will draw interest from public and private capital now that investors can see downside protection, a path to returns on a reasonable horizon and potential upside if the technology is broadly deployed,” Dhesi said.

Texas Push

Just as Texas Gov. Greg Abbott (R) and lawmakers are attracting Big Tech to build artificial intelligence data centers and to relocate companies’ headquarters to Texas, they are also drawing space-related ventures—many of them startups—with eased regulations and financial incentives.

The state Legislature in 2023 passed House Bill 3447 to establish the Texas Space Commission and allocated $350 million to support the development of technologies, research projects, and workforce training. About $200 million will fund the Texas A&M University Space Institute near Johnson Space Center to focus on lunar and Mars exploration and workforce training.

As of December, the commission said it awarded $126 million for 22 space-related projects from companies including Firefly Aerospace, Blue Origin, Intuitive Machines, SpaceX, and Starlab Space.

In the same way that Texas’ financial investments into nuclear energy are driving demand for attorneys with atomic expertise, the infusion of space dollars promises to bolster law firms’ legal workload in space-related issues for years to come.

“Texas wants to be a long-term player in the space game,” said Kate Goodrich, senior policy adviser in Holland & Knight’s Austin office. “When Texas invests money like that, they want results.”

Considering the state’s investments and the specialized legal work it generates, Holland & Knight’s headcount will likely “grow exponentially” in the next few years, said Mike Warner, a senior policy adviser at the firm. The goal is “that not even one person is overloaded with work,” he said.