Law firms leased 3.2 million sf of office space in the first quarter, surpassing previous highs in 2019 and 2021. The evolving trend towards hybrid work, with 2 days remote and 3 days in the office, offers attorneys flexibility for collaboration and performance.

Law Firms Are a Bright Spot in a Dreary Office Leasing Market

By  Kelsi Maree Borland

Law firms have a history of supporting the office market. During the creative office revolution, law firms provided a lifeline to traditional office owners, and in the midst of today’s office market correction, law firms remain fervent users of office space.

From the adoption of hybrid work styles to retiring the corner-office mentality, they are emerging as an example of how the office market will evolve, say Raymond Trevisan, CRE, executive managing director with Cushman & Wakefield and a member of the Counselors of Real Estate, and Anthony DellaPelle, CRE, the global chair of the Counselors of Real Estate, two experts in law firm leasing.

Law firms are voraciously leasing office space, even as office demand in the US has fallen sharply. According to research from Cushman & Wakefield, law firms have accounted for 7.2% of office leasing activity in major markets, and firms have committed to 3.2 million square feet of space in the first quarter of the year alone. The activity exceeds leasing activity for the sector in1Q19 and 1Q21, and it puts law firms on track for another strong year of leasing activity

Finally, some good news for the office market as Law Firms leased more office space in 2023 than they did during any of the pandemic years, 2020-2022. In fact, per this article, they leased more in 2023 than in 2017, 2018, or 2019.

Law firm office-leasing activity hit a milestone in 2023. It could fuel a domino effect.

By Ashley Fahey – Editor, The National Observer: Real Estate Edition, The Business Journals

The legal industry leased more office space last year than it has since the Covid-19 pandemic.

In 2023, U.S. law firms leased a collective 16.9 million square feet, according to Cushman & Wakefield plc (NYSE: CWK). That’s not only more office space leased by the sector since the Covid-19 pandemic, but exceeds the amount leased nationally by law firms in 2017, 2018 and 2019, as tracked by Cushman.

The legal industry has bucked the broader trend of office-market leasing since the pandemic upended norms around office-space usage. While law firms, like other industries, have taken a hard look at their office real estate, they on the whole are using the office more regularly than other industries. Therefore, they’ve occupied a more robust segment of the leasing market while other industries have slowed their deal activity, put spaces on the sublease market or exited big chunks of space.

For those in commercial real estate who work with law firms on their office-space needs or otherwise track the industry, the legal sector’s recent leasing activity is indicative of its new normal.

Many law firms that saw their leases expire in 2020 or 2021 inked a short-term extension because of the uncertainty during the height of the pandemic. But in the past two years, law firms have gone back to the office more frequently and overall feel more confident making longer-term decisions about their space, said John McWilliams, senior research analyst at Cushman.

The biggest relocation signed by a law firm since the pandemic, according to Savills plc, was Paul, Weiss, Rifkind, Wharton & Garrison LLP’s deal inked late last year. The international law firm agreed to take 765,931 square feet at 1345 Avenue of the Americas in Manhattan. Not only was it the largest law office relocation since the pandemic, it was also the largest office lease signed across all industries and the U.S. last year.

Are Law Firms redesigning their office space for hybrid work? Per this article from Gensler, maybe.

Certainly, they are planning more meeting/gathering spaces with smaller more uniform offices, but are attorneys willing to give up or share their private offices? I think the jury is still out on this one.

What do you think?

Rethinking Law Firm Workplaces in the Age of Hybrid Work

By Carlos Posada

Editor’s note: This article originally appeared on Law.com.

Although the debate on what the right balance and approach are continues, it is fair to say that hybrid working is here to stay. Embracing this transition in law firms has required a lot of thought, given the nature of their highly confidential and focused work. We also know how crucial mentorship and firm culture are to the business and ecosystem of today’s law firms, so creating places that people want to work in is more important than ever. As we increasingly look at design and the built environment through the lens of sustainability and social consciousness, it seems competing interests are emerging that are creating tensions in the design of law firm workplaces.

One of the universal issues we face is the climate crisis. As we collectively consider how to reduce our carbon footprints, the decision to rethink the purpose, and therefore layout, of our offices has become urgent. It is important we explore the challenges and opportunities law firms face in finding the right balance between their sustainability goals, employee well-being, and business opportunities where employees can thrive and do their best work.

Currently, data is showing that European office occupancy is averaging 50% with midweek peaks of 65%. The feedback we have received from lawyers is that they often feel isolated in their assigned offices and question the benefit of commuting in when there is a lack of buzz, energy, and even interaction with their colleagues.