Law Firms Lead the Way in Dropping WFH Strategies

Law firms are among the first office-using tenants to reduce or eliminate their WFH strategies, according to a new report from Colliers. 

While the national occupancy rate currently stands at 25%, nearly 70% of law firms surveyed by the commercial real estate giant report being at least 25% occupied. By the end of 2021, Colliers experts predict that two-thirds of all law firms will be more than 50% occupied. 

Adding to that calculus is the fact that most large firms posted a blockbuster financial year: according to Colliers’ Grame Young, “all of the major law firms are having a banner revenue year.”

At the same time, firms are reducing their footprint; many with leases up for renewal this year converted to universal offices, a trend Colliers predicts will continue post-COVID. Colliers also says additional sublease space will likely flood the market as office-using tenants reevaluate space needs.  Over the last four quarters, office posted a 65% increase in new sublease space, and the total supply now exceeds 200 million square feet.  

The effect is already beginning to be felt across the law firm sector, with firms like Locke Lord in Dallas putting nearly half of its 115,000 square foot footprint up for sublease. Hogan Lovells in Washington, D.C., and Winston Strawn in New York City are also following suit. And in Atlanta, Aldridge Pite Haan put its entire office at 3545 Piedmont Road up for sublease, adding 44,776 square feet of sublease space to that market.  

“Despite the quick return, the pandemic’s impact will be seen for years to come as firms reassess their traditional ways of doing business,” the report notes. “Flexibility will remain paramount, whether it’s early termination/contraction language added into a lease agreement or a functional change in the design of the office that will allow them to easily demise a portion of their space in order to sublease it.”

Productivity will also remain a key metric in assessing space needs for many firms, according to Colliers: “While many lawyers and employees have been as productive, if not more so during the pandemic, uncertainty remains whether these levels are sustainable over the long run,” the report states.

But recent research from Cushman & Wakefield shows that many staffers aren’t so eager to return to physical work full-time: 60% to 80% of the law firm professional staff surveyed by C&W would be happy to continue working remotely, according to Sherry Cushman, executive managing partner of the commercial real estate brokerage firm. Firms are likely to strike a balance, she said, between bolstering productivity and achieving cost savings through shrinking their real estate footprints.

“They can’t all stay at home,” Cushman said of staffers. “But firms are evaluating every single position.”