LOS ANGELES—Law firms are responding proactively to the challenges brought on by changing business conditions, CBRE says in its inaugural report on the sector. For office landlords, those responses may have unwelcome implications for the space requirements of legal tenants.

Put simply, the largest law firms—the Am Law 100, representing the 100 top-grossing US firms as ranked annually by The American Lawyer, sister publication to GlobeSt.com—are reducing their office footprints. “Am Law 100 firms are more likely to engage in contraction activity vs. their smaller peers,” according to CBRE's report.

Between the first quarter of 2016 and Q2 2017, CBRE says, more than half of the legal sector's transactions and the majority of the square footage that resulted in contraction involved Am Law 100 firms. Twenty percent of the Am Law 100 firms reduced their space needs in one or more markets over that time period, according to CBRE data.