Bench & Bar of Minnesota is the official publication of the Minnesota State Bar Association.

Rethinking the Law Office: Trends in legal office space

Insights from commercial real estate professionals

By Dan Wicker, Tom Dahl, Paul Donovan, and Jaclyn May

Today the success of a law firm depends on much more than just helping clients and billing hours. The operational side of the industry can be tedious, with a number of moving pieces to consider when evaluating costs and projecting profit margins. Aside from salaries, the #1 business expense currently facing law firms is occupancy costs. As a result, Minneapolis law firms and their counterparts across the country are looking for ways to reconfigure their space to get the most bang for their buck.

Since 2013, Cushman & Wakefield’s Legal Sector Advisory Group has conducted an annual National Legal Sector Benchmark Survey to track trends emerging across the United States. The most recent survey included responses from over 1,200 decision makers at firms of all types and sizes, and the results were telling. As firms continue to focus more on their real estate costs and the quality of their environment, several patterns have emerged in the areas of space efficiency and design within the legal sector.

Smaller footprints

Historically, law firms across the U.S. have been significantly less efficient in their space than typical office users, averaging about 850 square feet per attorney. As companies of all types look for ways to save on real estate costs, law firms in particular are aiming to improve their bottom line and reduce their footprint by achieving new target ratios of 600 square feet per attorney or less. According to Cushman & Wakefield’s survey, approximately 31 percent of U.S. law firms “gave back” space as a part of their lease renewal in 2016, while a whopping 46 percent of firms reduced their footprint when they relocated.

One of the key drivers in many firms’ decision to reduce their footprint is a shift in the average size of private attorney offices. Traditionally, firms have given their more senior attorneys larger offices with space for meetings, stately furniture, and abundant bookshelves. The trend today, and in the future, is a conversion to smaller, single-size offices for partners and associates alike. This trend is not only helping firms save on their overall square footage, but likewise allows for more flexibility as associate-to-partner ratios vary over the course of the lease term.

A second factor in law firms’ ability to reduce their footprint is the industry’s move to a paperless workplace. As new technology such as case management software and customer relationship management (CRM) databases become more prevalent, file cabinets and traditional firm libraries are becoming functionally obsolete. In addition, 25 percent of firms are currently scanning all of their documents to eliminate paper, while another 32 percent plan to make the switch in the near future. The excess space left behind by the reduction of paper and bookshelves will allow firms to reconfigure their existing square footage upon lease expiration.

Space design

As firms around the globe aim to be more efficient, they are also placing more emphasis on the “we space” versus the “me space” of their locations. Industry leaders are redesigning their offices to allow for a more collaborative and cooperative workspace, which has proven to help foster open communication and can play a key role in attracting and retaining top talent.

By 2025, over 50 percent of the lawyers in the United States will be millennials. Businesses of all types are looking for ways to accommodate the demand for the millennial “live-work-play” lifestyle, and law firms are no exception. According to the survey, work/life balance is the #1 priority for associates entering the legal sector, and many prefer to work remotely, either from home or on the road. As a result, many firms are implementing “hoteling” stations, or desks not assigned to a particular employee. This trend allows for more flexibility to work remotely without tying up additional square footage for a dedicated private office.

A second design trend catching on in the legal sector is the shift to more interior private offices with glass fronts and breakout rooms. While nearly all firms still have offices along the exterior windows, a desire for more natural light throughout the space has caused many to move at least some of their private offices to the interior walls of the space. With the shift to a more open and collaborative environment, there is a greater need for small meeting rooms and huddle booths for private conversations or phone calls. Law firms are also incorporating flexible meeting space to host client events, seminars, and networking receptions to support increased business development efforts.

Case Study: Best & Flanagan

In 2015, Best & Flanagan made headlines as an industry leader when it relocated from Capella Tower to a smaller space at RBC Plaza. By implementing single-size offices and moving to a mostly paperless environment, the firm reduced its footprint from 35,000 square feet to 28,000 square feet.

The move included a shift to smaller private offices, each one approximately 10’x12’, for both partners and associates. In an effort to promote community and collaboration, the firm also implemented more shared area within the space. This open area also provided direct views of exterior windows, harvesting natural light and improving the energy of the space.

Summary/Future trends

As the labor force evolves and technology continues to revolutionize the legal sector, law firms around the country must adjust their real estate strategy accordingly. We expect to see a steady increase in firms moving to a paperless environment as more emphasis is placed on the environment and as a variety of software platforms eliminate law libraries and paper file storage. Additionally, as firms become more efficient within their space and save on real estate costs, those on the cutting edge will have an opportunity to increase profitability and improve their bottom line.

Cushman & Wakefield’s Legal Sector Advisory Group specializes in strategizing, creating, and implementing real estate solutions that support the continually-evolving business of today’s law firm.

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