FEATURE ARTICLE, AUGUST 2007

LAW FIRMS TARGET FLEXIBLE OFFICE SPACE
Facing the need to present a successful image, law firms demand quality space.
David Demarest, Tom Doughty & Bella Schiro

The moment a client first sets foot in your space sets the tone for your business. Today’s law firms, more than any other industry, understand the impact office space design has on their clients and on their staff. Balancing the need for a space to convey a successful and impressive image is the practical reality of the high price of real estate. Every dollar spent on office space comes directly out of the revenues generated by the firm (and the partners’ pockets), and prospective legal heavy-hitters are likely to judge firms by their profits per partner. While the requirement for a professional workspace remained consistent in the legal circles across the country, the space utilization has changed dramatically, with a primary focus on reducing occupancy costs. The successful law firms of the future will demand flexibility and require that office environments be designed to help win the war for talent.

Law firms have other unique space issues. They have a greater need for paper document storage than most companies, and their ability to grow through M&A can be affected by their occupancy situation. Six key trends have emerged in legal office space utilization that can help mitigate the effect of business cycles and reduce the impact of rising real estate costs.

1. Office Standardization

The trend of creating one standard office size for all partners and another for all associates has been gathering steam for years. Firms that standardized often economized as well by shrinking office sizes at all levels. Today, a typical partner’s office is about 225 square feet or 15x15 feet, while an associate’s office averages about 150 square feet or 10x15 feet. For firms with larger partner to associate ratios or significant movement within practice groups, the universal office concept (one size for all attorney offices) has proven to be more space efficient and given them more flexibility for growth while saving construction costs. The universal office is typically 180-200 square feet. For firms with a larger associate to partner ratio, while a universal office standard will save in construction costs and give flexibility, it will not save in space utilization. For these firms the traditional office standards of 225 square feet for partners and 150 square feet for associates will be more efficient.

Law firms are also adding flexibility in their space plan to accommodate fluctuations in support staff, namely secretarial ratios. Currently averages of three-and-a-half to four attorneys per secretary are common but will continue to decrease as partners become more tech savvy. The space and money that law firms are saving on individual workspaces are being spent on common areas visited by clients, particularly reception areas and conference rooms.

2. Talent Recruitment

In the legal world, the war for talent extends into the office environment as every element is scrutinized by potential new hires and by competition. As the competition for entry-level talent increases, major firms are pumping up the pay for first-year associates. That puts pressure on the firm’s ability to reduce the size of offices as a fine line exists between creating efficiency versus creating the impression that the firm’s space isn’t up to the standards of its firm’s competitors.

In New York, many firms are doubling up first-year associates around the windows, or providing interior offices. Often in markets where space isn’t a major component of overhead because of lower rents — like in the Southeast — firms can afford more solo offices. In high rent markets like New York where space can exceed $100 a foot, doubling lawyers in one office is more common. In London, firms are tripling in offices with a partner and two training associates. While reducing office size can eliminate overhead costs, it must be done without sacrificing the ability to attract and retain talent.

3. Looks Matter

To offset costs while retaining an aesthetically pleasing environment, law firms are working with third-party advisors to help analyze efficiency and test fit requirements in locations and styles months or years before the architects come into the fold. The singular focus most law firms have is “what is my space going to look like” and creating this look is now being done more efficiently. Firms have moved away from the large board room with an extravagant table and individual partner conference rooms. Today they are collocating conference rooms to create conference centers, which maximize the flexibility with moveable partitions and modular furniture, to support meetings one day and training seminars the next. Furniture is no longer built into each office; instead firms are using quality modular furniture with the same appearance, and with the added ability to move as the firm’s needs change. Additionally, firms with multiple floors of space no longer have multi-floor reception areas, favoring a single reception entrance area that limits visitor access to back office and adds greater security controls.

Another way law firms distinguish the quality of their office space is through impressive art collections and quality amenity spaces such as fitness rooms and cafeterias. To ensure the firm’s investment carries its value, many firms are incorporating art committees. Art is rarely commissioned and built into office spaces any longer, favoring movable pieces. Fitness rooms have the latest exercise equipment and cafeterias offer a place to socialize and get away from the desk.

4. Off-Load the Production Space

With cases constantly opening and closing, firms are increasingly moving their case rooms to lower floors of their buildings or off site to a Class B building while the case is ongoing. This allows the firm to reduce its occupancy costs for temporary needs. Because these secondary office spaces tend to be more open, the flexibility allows for dormant space to be used as a virtual touchdown office or a storage room between cases. Firms are also looking at production spaces and back office functions like word processing and accounting departments for additional savings. These spaces may be located in lower floors of the same buildings, in buildings off-site or outsourced to third parties.

5. All in the Family

To encourage retention, some forward-thinking firms are utilizing their space by opening a day care on-site or nearby to keep the importance of family life at the forefront of the firm. Firms often lease the space for a day care and hire a professional operator to run the service.

6. Build Your Own

Because it is of importance to law firms both operationally and culturally to keep its space under one roof as much as possible, large law firms that cannot find contiguous space for their growing practices will often choose to anchor a new office development. In the past, it was harder for law firms to anchor office developments because of their financial structure, but due to increasingly sophisticated lending and development financing, law firms can get easily financed and more readily anchor new developments. While the costs to anchor a new building can exceed existing space, the long-term benefits of designing the firm’s space efficiently from the outset may outweigh the increases.

David Demarest is managing director of Jones Lang LaSalle Atlanta’s tenant representation group and a member of the firm’s law firm group. Tom Doughty is the international director of the firm’s law firm group. Bella Schiro is responsible for strategic planning for the law firm group.


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