In recent years, a growing number of law firms reduced their brick-and-mortar office space as a way to cut costs and also better meet the changing workplace needs of their attorneys.
This trend included firms that signed new leases or renewals in 2019 decreasing their occupied square footage by an average of 10.6%, according to commercial real estate firm Cushman & Wakefield’s report, Bright Insight: The 2020 National Legal Sector Benchmark Survey Results.
Sherry Cushman, a vice chairman at Cushman & Wakefield, says the COVID-19 pandemic has further enhanced the desire of firms to shrink their real estate footprints and revamp the designs of their offices as part of broader changes to their overall operations.
A poll conducted during a webinar that Cushman & Wakefield hosted last month for more than 900 participants from the United States and global law firms indicated that more than half of the respondents expected the size of their firm’s real estate portfolio to shrink more than 10% in response to COVID-19.
“This has been almost a forced shift in an industry that needed a correction,” says Cushman, who leads Cushman & Wakefield’s global legal sector advisory group.
She says the necessity of firms cutting their real estate expenses has come into sharp focus as many have laid off and furloughed employees because of the pandemic-driven economic downturn. Meanwhile, the lawyers and staff who remain on payroll are largely working from home and have become comfortable doing so.
To begin reducing their footprints in the near term, many firms have begun attempting to sublease space to other parties, Cushman says.
Additionally, law firms that were considering long-term lease renewals have instead pursued short-term extensions that provide time to reevaluate their real estate approach.
“And relocations that were pending leases to be signed were very quickly terminated, and a one- or two-year extension was made on their existing leases to again buy time,” says Cushman, who has worked with law firms for more than three decades.
Besides pursuing downsizing, Cushman also expects firms to alter how their offices are designed. She predicts that the law firm office of the future will have far fewer fixed offices assigned to specific attorneys, more “touchdown spaces” for employees who do not come in five days per week, and conference centers that can be easily transformed for other uses.
About a quarter of respondents during the recent webinar that Cushman led said they anticipated “drastic changes to their workplaces” because of COVID-19 and legal sector shifts, and another 69% said they planned incremental changes.
“I think that the savvy firms and the progressive firms are going to grab the bull by the horns and look at every aspect of their operations and real estate and use this to reinvent,” Cushman says.
However, she acknowledges that the legal sector as a whole has historically trailed behind other industries in modernizing the workplace.
Cushman attributes this, in part, to law firms traditionally thinking that having opulent offices was sending a signal to clients about the quality of the firm. She says lawyers who worked hard to make partner also have wanted to enjoy the benefits, which typically have included being given your own large office with a partner desk.
But even as firms downsize and more attorneys become primarily remote workers, Cushman emphasizes that the traditional office still has an important role to play in the development of firm culture and personnel.
She thinks firms would be wise to maintain spaces in which employees can come to interact in person with colleagues, receive mentorship and participate in educational programming.
“The need for as much office space is going to be less and less, but the need for the right kind of office space is going to be more important than ever,” Cushman says.
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