Key findings of the report include
- As space efficiency has become a primary real estate strategy for most major law firms, the amount of square feet leased per attorney has generally decreased over the past 10-15 years across the ten markets studied. However, factors such as fluctuating attorney counts, subleasing of space, and variances in space design versus space utilization make it difficult to draw direct conclusions from the amount of leased space per attorney. In short, the intent behind how law firms lease and use office space does not always match the reality of how much space they occupy. Nonetheless, these figures have generally trended downward as more space is dedicated to shared amenity and meeting areas.
- Legal services employment in the 10 markets studied has remained relatively flat over the past five years, averaging only 0.5% annual growth. However, this was a considerable change from the layoffs many firms endured during and after the Great Recession. Sluggish growth in legal services employment is expected to continue with forecasted annual growth for these markets averaging only 0.2% over the next five years. Recruitment and retention is a priority.
- Rental rates for law firm leases have increased over the past 15 years, with most cities seeing a marked rise in rents over the past five years; the 10 markets studied saw a 21% average increase in law firm rental rates during the 2015-2019 period compared with the 2010-2014 timeframe. This significant increase is mostly attributed to a flight-to-quality trend among law firms, as the increase in efficiency allowed many firms to upgrade their space while maintaining or reducing overall occupancy costs.
The study concludes with a summary of key law firm real estate metrics for these 10 cities and offers action steps for law firm tenants and for asset owners who lease space to these tenants.