Goodbye Dark And Dreary, Hello Open, Well-Lit Law Office
Law offices have undergone a massive evolution within the last few years. Gone are the days of heavy, dark, wood-colored offices. Today’s law offices have more natural light, smaller individual spaces and share many of the same traits of a modern tech office. While law offices have downsized in response to declining revenue and increased IT security and tech expenses, design choices have become more intentional.
Designing more open, well-lit offices is part of the industry’s goal to prepare for a shift in demographics. By 2025, over half of the lawyers in the U.S. will be millennials, Cushman & Wakefield Executive Managing Director Sherry Cushman said.
“For the first time in the history of law, [office design] is a recruiting and retention tool,” Cushman said.
Whereas 10 years ago, firms were simply downsizing the office to reduce expenses, real estate decisions are becoming much smarter. Since law firms often sign leases of 15 years or more, the decisions they are making today are not for current partners, but for future ones, Cushman said.
Cushman has been advising clients to set aside renovation funds each year so when the time comes to consider a build-out, the funding is available and associates will not need to decide between end-of-year distribution profits and designing a modern office.
More Open Spaces
One of the biggest shifts has been a move toward more open space and collaborative work environments. Common areas outside of the physical office are helping increase the business energy, Cushman said.
“More and more firms are using real estate to create a new collaborative environment and shift to we-space [rather] than me-space,” Cushman said.
With younger associates preferring a work-life balance, how they work has changed. Instead of spending 10 to 12 hours a day inside an office, these associates are working a few hours at home to spend time with family, and then logging in hours at the office. This new way of working has law firms rethinking if they even need big offices or assigned offices anymore, Cushman said.
Fewer Private Offices
Offices are becoming smaller, with fewer private offices available. Previously, firms were setting aside 900 SF to 1K SF per attorney. The number has shifted down to 600 SF to 700 SF per attorney, Colliers International principal Daniel Arends said. Instead of huge corner offices, law firms now have conference rooms lining the exterior windows.
“[Millennials] no longer care about having a large office and all the things that go with the hierarchy,” Arends said. “They want a flat structure and to be rewarded on what they can do in the workforce.”
U.S. firms are unlikely to go the way of some London offices where some associates share a single office, Arends said. There will be more shared spaces, but individual offices will not disappear completely.
Quality Over Quantity
While firms are downsizing space per attorney, they are not shifting away from the quality of design. They still want to be in new office towers with glass perimeters, Cushman said. The new buildings also offer more efficient cores and layouts. While this may mean paying more per square foot, it results in paying less in price per attorney for a better quality office.
When law firms do relocate, they still want to be in premium Class-A buildings and preferably newer ones, Arends said.
“It’s a perception,” Arends said. “Some of the senior partners and millennials like to be in a nice building.”
Firms also are pushing tactical teams, such as support staff and accounts payable, into lower areas of a building or into separate offices in cheaper markets, Arends said. Some firms are even outsourcing these jobs to areas where real estate is cheaper or outside of the country, he said. This also means fewer devoted offices or spaces for specific employees.
No More Dark And Dreary
One major change in law office design is the result of a massive decline in the number of clients that come into legal offices. This shift has resulted in offices becoming more work-friendly environments and catering less to clients, according to Cushman. Lobbies are no longer filled with overstuffed furniture in a design that feels more like a living room, but now have the look and feel of a tech office with sparse furniture.
Technology also allows for attorneys to travel less since they can connect with clients and colleagues remotely.
Formerly dark, generic areas of the office are being turned into open reception areas, and more vibrant food and beverage areas that also double as touchdown areas for lawyers coming from out of town, Arends said. Large libraries and storage areas also have been taken out of the office, he said.
Design Decisions Depend On The Market
Office design has materialized in different ways depending on specific market dynamics. Rising rents in San Francisco have pushed law firms to rent two floors instead of three. Many are finding it more cost-effective to stay in their current buildings than move, Cushman said.
Washington, D.C., is the healthiest tenant market for law firms. About 30% of the market in D.C. is made out of law firms, with New York’s law offices making up 11% of the market. When sequestration occurred in D.C., leasing activity stopped and froze the market, Cushman said.
This helped stabilize rents and kept them from escalating like they are in other markets. Even though law firms in Washington, D.C., are taking less space, more tenant concessions and free rent are allowing law firms to invest more money on design and technology, she said.
While New York firms are getting fewer concessions, if any, they are preferring new developments and many have already moved to Hudson Yards and other new developments. In San Francisco, several law firms have committed to space in Salesforce Tower; Goodwin Procter leased 100K SF in a new development in Redwood City, just south of San Francisco.
While firms continue to debate whether to move, downsize or both, the following will remain a common theme and driving force for the next few years.
“In every single one of the cases, law firms are downsizing square feet by 10% to 30%, and every one of their moves are driven by millennials,” Cushman said. “More and more firms are jumping on the bandwagon.”