Law firms face more supply constraints than companies in nearly any other industry. Why? Law firms typically target premium, Class A space in central locations—the tightest segment of U.S. office markets. With fewer space options, your firm may find itself battling with competitors not only for clients—but for desired space as well. Notwithstanding these challenges, our 2014 Law Firm Perspective identifies several trends that law firms are using to optimize costs.
The first trend we’ve seen is that location is being driven by talent, not a premier address. Traditional law firm partners have located their business in the heart of the CBD, close to transit options and client offices. But in recent years, fringe CBDs and somewhat unorthodox locations are becoming more desirable to associate and senior associate talent—the future of firms.
The second trend is around finding savings through multiple office locations. At most law firms, about half of the employees aren’t lawyers, but professionals in administrative and operational roles. Since modern technology enables communication across geographies, some firms are saving money by relocating these non-revenue generating employees to offices in lower-cost metro areas, while keeping attorneys in their premier space.
The third trend is in how law firms are making the best possible use of office space. Mid- to large-size firms are still in contraction mode across the U.S.—giving up an average 17 percent of space upon relocating in 2014 in an attempt to right-size. Phoenix is no exception, having seen a dramatic drop in the share of office space that is occupied by law firms. Now that the historically-low rates of the post-recessionary period are all but gone, expansion opportunities have become more expensive, driving many law firms to renew their leases and explore more efficient layouts of their current space.
These trends and others are discussed in more detail in our full report. Visit www.us.jll.com/2014law for more detailed trend info, charts, videos and webinar information.