Have you followed the recent commentary about law schools in crisis? The three-year curriculum is too long, the cost-benefit isn't there except for tenured law professors, graduates emerge with enormous student debt, there are too few jobs, and far fewer that pay well. Law schools are talking about changing curriculums, possibly cutting a year out. The dirty little secret is—many intelligent college grads could pass the bar exam after taking one of those intense prep courses, certainly without all the law school course padding.
And that leads into what's happening at law firms, a once reliable demand driver for prime office space. Let's put it this way—most firms are not exactly in expansion mode. My white shoe law firm neighbor seems more than frustrated—he affirmed that “clients just do not want to pay as much.” The squeeze is on… fewer transactions, fewer deals, and even on-line do-it-yourself legal forms all contribute to the need for fewer lawyers. What a difference a few decades make…
Thirty years ago when I graduated with a JD degree, the law school track was one of the most popular, highly coveted and rewarding —first year associates at top law firms were the very apple of their parents' eyes. Remember all the mamas kvelling over “my son the lawyer.” It was the top tier profession, ahead of investment banking, who knew from high tech, and you didn't need to pass impossible organic chemistry like all the doctor wannabes.
Associates in the leading firms can still make a nice low six figure salary, but it can be a burn out track, and most have those big student loans to pay off. These are the lucky ones.
Of course, it's a similar scene in the investment banking world—Barclay's just entertained a new round of layoffs and newly minted MBAs have started to wonder whether the round-the-clock numbers crunching will get them anywhere. There's no more guaranteed road to riches and the regulators make it harder to score the big payoffs (or put another way harder to risk losing a lot of other people's money).
With fewer people making more and more people making less even in the top line professions, the trend line is clear for what will be happening with office leasing and rents. It will continue to be slow going—forget about any pop. Sure there will be some hot boutique firms willing to pay up for exclusive space, but they will be the outliers, and landlords should wonder about potential flameouts. The established law firms will continue to economize, keep lean, shrink space per capita requirements like other office tenants, and necessarily drive hard bargains as the Brahmin partners try to maximize their payouts. This once sure thing demand driver, especially in the major CBD markets, is no sure thing anymore… Like just about any other industry.
Indeed, even the white shoe has lost some of its sheen in all the recent tough going.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
