Law Firm Buys Private Jet As Cheap Alternative To Leasing Silicon Valley Office Space
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A Texas law firm has found an inventive and lucrative way around Silicon Valley's astronomical commercial real estate prices: a private jet.
In what is surely one of the most original ways to reduce occupancy cost, Houston-based law firm Patterson + Sheridan bought a nine-seat corporate jet instead of leasing office space in one of the country's tightest and most expensive office markets, shuttling a plane full of lawyers from Sugar Land to California each month.
The firm paid $3M for the jet, which costs $2,500 an hour to operate, plus roughly $1,900 per passenger, the Houston Chronicle reports.
Patterson + Sheridan, primarily a patent firm, says it is able to offer clients lower rates because most work is done in Houston, where commercial real estate prices are 43% cheaper and there is less competition for technical talent.
The move has paid off. The firm said it has gained major Silicon Valley players like Inuit, Western Digital and Cavendish Kinetics.
"In some cases, clients pay a little less," said Bruce Patterson, the firm's senior partner. "But we make more doing it."
Each hour on the roughly four-hour flight is billable, because the lawyers work the entire time, unlike on commercial flights where client confidentiality is at stake. The time saved flying private instead of commercial, multiplied by the average hourly billing rate, covers the cost of the trip. For this reason, many law firms own private jets, but few get as much use as "The Bus," as Patterson + Sheridan calls it, which logs roughly 150,000 miles a year.
The firm started using the strategy in 2010 when clients found teleconferencing to be unsatisfactory. The firm quickly realized the added benefit of being able to drum up business by attending dinner and drinks after work hours. The jet has become a selling point in recruiting new lawyers as well. A paycheck goes much further in Houston than Silicon Valley, where the median home price is $2.6M.
While law firms around the nation are getting creative to reduce their footprint and moving farther out, this is the first that has chosen to skip an office for a private jet, according to William Cobb, managing partner of Cobb Consulting in Houston, which advises law firms on compensation and strategy.