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Houston Law Firms Go Big On Space, Propping Up Office Market

Houston law firms are playing an outsized role in sustaining the city's office market, particularly downtown, as other firms move farther out to be closer to workers amid the rise of hybrid work.

While many tenants are paring their spaces by as much as half as leases come up for renewal and relocating farther west, law firms are signing up for bigger, more expansive spaces and spending big money on remodeling. That trend was underlined by a new study from Savills showing that Houston now counts the most square footage per attorney of any other city in the country.

JPMorgan Chase Tower, at 600 Travis St., is the tallest building in Houston.

“Everything's bigger in Texas is true with regard to office space as well,” Savills Senior Managing Director Lesa Nickelson French said of the firm's 2023 benchmarking report indicating that Houston firms occupy an average 1,055 SF per attorney, compared to a national average of 985 SF. The next-highest average is in Washington, D.C., which comes in at 1,017 SF, while Los Angeles ranks lowest at 899 SF per attorney.

Houston’s overall office vacancy rate ended last year at 23.2% and the Central Business District, where many law firms are located, fared even worse with 27.8% vacancy, according to an Avison Young report. But the numbers would be even worse without the presence of law firms.

Law firms are “very important” to Houston’s office market, French said, with many Am Law 100 and 200 firms choosing to locate their offices downtown because of the proximity to the courthouses.

“Landlords want those types of tenants in their buildings, especially the Class A buildings,” French said. “They also spend a lot of money on build-out, which of course, is great for the building as well.”

Last month, French represented Bradley Arant Boult Cummings LLP when it reupped its lease and moved from the 48th floor of JPMorgan Chase Tower, at 600 Travis St. in downtown Houston, to the 56th and 57th floors, growing its total presence to 45K SF. The firm has more than doubled its square footage since 2016.

The firm was in the middle of a lease when growth required it look at more space within the building, settling on two floors with an internal stairwell.

“So it was an easy decision to make,” French said. “They love the building, they love the location. The building just underwent a bunch of renovations, and it looks beautiful.”

In the past year, commercial law firm Munsch Hardt Kopf & Harr nearly doubled its space downtown, going from 21K SF to 41K SF over two floors at Pennzoil Place. Meanwhile, a number of new firms have moved into town, including O’Melveny & Myers, which opened its third Texas office in a year at 700 Louisiana St., and Sheppard, Mullin, Richter & Hampton, which took space in the same building.

Law firms are also investing heavily into existing spaces. Chamberlain Hrdlicka law firm has been at Two Allen Center, another building that recently underwent renovations, since 1984, Chief Operating Officer John Meredith said. The firm is now sinking $6M into its 55K SF space on the 13th and 14th floors and has committed to stay in the building until at least 2035.

Two Allen Center at 1200 Smith St. has 36 floors.

Square footage per attorney is something Chamberlain Hrdlicka looks at carefully, Meredith said, adding the rectangular shape of the building makes it easier to build out offices, and every attorney has their own office.

“If you fit around the perimeter, you can get more offices per square foot,” he said. 

Meredith said the firm made the commitment to stay put for the long term because it enjoys Brookfield Properties as the management group and especially likes the revamp of the building and outdoor area. It has retained Gensler to design its own office renovations, which will include new amenities, more natural light, and more collaborative and functional modern workspaces.

It was time to upgrade, but it’s also necessary to cater to what younger attorneys are looking for, Meredith said.

“We wanted to continue to upgrade our offices,” he said. “But we also want to make it a place that's attractive to the next generation of lawyers. So we're working on a lot of those amenities, including upgraded coffee areas. And more light coming in through to the interior to make it more welcoming.”

Historically, corner offices and office sizes were a status symbol among attorneys, French said. Millennials don’t view office size as being quite as important as older generations did, she added, but having nicely fitted-out private offices is key. 

“Especially to the national firms, the Am Law 100 200, that is going to be something that they need to compete with their other Am Law 100 200 peers,” she said. “We're seeing this flight to quality of going to the higher, even the highest end, in some cases, Class A buildings.”

Houston has traditionally had larger offices because its office space was undervalued, leading to low rents compared to other metropolitan areas, she said.

Thomas Fulcher, chairman of the Savills Legal Tenant Practice Group, told The American Lawyer, there is another reason Houston firms have gone bigger — culture.

The Houston legal scene may be “just a little bit more conservative and holding on to the ways things are done,” he said. “If you think about Houston and oil clients, and LA and entertainment clients, the lawyers will reflect the clients. It comes down to culture, what people are comfortable with."