Law360

Sarah Morris Quoted In Law360

New York (August 25, 2015, 1:30 PM ET) — As Californians attempt to wade through the tricky regulations recently put into place because of the drought plaguing the state, attorneys in the state have seen a flood of additional work.

California residents are turning to attorneys to help them with newfound water rights matters and to figure out how the recent influx of groundwater regulations will affect them. There’s also been an uptick in real estate work, with developers having to deal with new restrictions and new contracts stemming from water rationing and supplies as well as an increase in contract and infrastructure work.

“For all of us, this has become such a big part and prevalent part of our practices that it touches on everything we do these days, and I see this continuing through the summer and even the fall,” said Robert “Buzz” Hines, a partner in Farella Braun & Martel LLP’s environmental practice.

The drought has been affecting the state for the past four years, prompting regulators to issue a number of water restrictions on California’s thirsty residents.

In July, the California Water Resources Control Board issued a curtailment order telling farmers in the San Joaquin and Sacramento watersheds and the delta to stop pulling from the streams. Earlier this year, Gov. Jerry Brown mandated a 25 percent water usage cut across the state as well.

“We’re seeing a shift in the long-standing system of California water rights, such that there will be much more regulatory administrative oversight that will compel other practitioners outside of the water and environmental context to be aware of their clients’ interests touching water,” said Wesley A. Miliband, of counsel at Stoel Rives LLP, whose practice focuses on water resources.

As a result, more water rights work has been flowing into certain firms. General counsel for top companies are seeking out environmental attorneys with water expertise, as are firms that don’t have strong water practices of their own.

“It certainly is causing us to have lots and lots of discussions with our clients about water strategy, water policy, what kind of adjustments they need to be making in the long run,” said Thomas Berliner, chair of Duane Morris LLP’s energy, environment and resources group.

On top of regulatory guidance, the water restrictions are also bringing in a surge of contract work to firms with environmental practices.

“There’s been a greater need for coordination among water users where there may be a groundwater resource that is applicable to adjoining properties,” Hines said.

Clients are seeking out attorneys to draft agreements setting forth the rights of each of the parties, as well as their respective obligations, so that water deliveries can be guaranteed, according to Hines.

Contracts relating to real estate deals also will have provisions dealing with water restrictions and rights, because buyers and sellers alike will need to have the full story on the water situation of the property in question, Hines said.

Buyers will want to know that they aren’t entering into a deal on a property that doesn’t have access to the amount of water they need, according to Philip N. Feder, a partner in Paul Hastings LLP’s real estate department. Developers are also seeking legal advice before starting any new projects.

“There’s concern about approvals in the future of new developments, particularly single-family homes,” Feder said. “Certain communities in California are concerned about allocations to which they might be entitled, and whether new developments can be approved if that is going to affect the allocations of water to which they’re otherwise entitled.”

According to Hines, developers are having to think about landscaping needs, municipality regulations and conservation matters.

“For a developer who is putting together a development, there’s a lot of just basic issues that are now very prevalent front and center given the drought,” Hines said.

Sarah Morris of legal recruiter Lateral Link LLC said there has even been a slight increase in hiring in these booming practice areas.

“There’s been a huge increase in need for real estate attorneys, both transactional and on the regulatory side,” Morris said. “There has definitely been a good number of land use and regulatory openings that I hadn’t seen in the past two or three years.”

–Additional reporting by Kat Greene and Andrew McIntyre. Editing by Jeremy Barker and Patricia K. Cole.