There is No Template for How Law Offices Will Handle Space Needs

There is no blueprint for how law offices will tackle their space needs coming out of the pandemic.

“There is not a true sense of exactly what working from home or remote working is going to look like in terms of headcount or percentage,” said Stephen Bay, vice chairman, CBRE on “The Weekly Take” podcast. “There isn’t a sense of where those people are going to sit when they come into the office.”

Bay says that a number of his clients have decided to provide less space. “If they have 100 lawyers there, maybe they’ll have 70 offices,” he says.

If law firms choose to go that route, Bay wondered how they would have enough seating if everyone is in the office.

“Law firm space might be some of the most expensive space to design,” Bay says. “And law firms are hesitant right now to make a commitment to leap into that void, not knowing what the ultimate outcome is going to be.”

David Fries, CFO for Orrick, expects to see a lot of change in how law offices are designed over the next five years, including the attorneys losing their proprietary sense of ownership in their own office space. He sees “a democratization of the use of real estate based upon need” with a mix of “me space” and “we space.” He predicts that offices will have more light and better technology while shrinking to something much closer to 400 square feet per attorney than the 700 to 900 square feet that has been prevalent.

“There is an enormous opportunity for us to do things so much better,” Fries says.

Even before COVID, Bay says law firms started to realize that they had to manage their real estate like a business and couldn’t let each office make its own decisions. “We had rents increasing on a compounded basis year over year from 2010 to 2019,” he says.

Laura Saklad, Chief Operations Officer at Orrick, says real estate is the second biggest expense for law firms after people. “It’s one of the few expenses that we believe we can control in a way that will not negatively impact our business at all,” she says. “In fact, we probably can get better. And so it’s really a lever that I think every law firm is looking at to try to figure out how to set up a workplace that makes the most sense in the future.”

In the process, firms have begun outsourcing some of their document storage and research needs to less expensive locations. For instance, Orrick now has its Global Operations Innovation Center in Wheeling, West Virginia. Fries says that with technologies like Zoom, DocuSign and virtual closings, there is less differentiation in the types of spaces that litigation associates or litigation attorneys need relative to transactional attorneys.

“More and more, a lot of the work can be done online. And you don’t need all that paper, and you don’t need all those paralegals on-site,” Saklad says.

Coming out of the pandemic, Saklad thinks remote work will allow law firms to tap into new markets and widen their talent pool. “It could give us access into markets where we can recruit more diverse talent, which I think would be a tremendous benefit,” she says.

In addition, the move to remote work will help firms retain talent that might find it challenging to balance an intense job and a long commute. “Getting rid of that commute gives us the ability to help retain really talented people that are struggling with work-life balance challenges or otherwise just want to have more time in their day to work and then time to still exercise and be with their families,” Saklad says.