Law firms face more supply constraints than companies in nearly any other industry. Why? Law firms typically target premium, Class A space in central locations—the tightest segment of U.S. office markets. Occupying roughly 8% of the Orange County market, law firms typically seek this high-quality office space in Newport Beach, Central Irvine and the towers in Costa Mesa surrounding South Coast Plaza. The highly-desirable Airport Area and South County’s Irvine Spectrum area offer an abundance of amenities, easy access to a number of residential neighborhoods and transportation hubs. However, as available space continues to shrink, firms may find themselves battling with competitors not only for clients—but for desired space as well. Notwithstanding these challenges, our 2014 Law Firm Perspective identifies several trends that law firms are using to optimize costs.
The first trend we’ve seen is that location is being driven by talent, not a premier address. Traditional law firm partners have located their business in the heart of the CBD, close to transit options and client offices. But in recent years, fringe CBDs and somewhat unorthodox locations are becoming more desirable to associate and senior associate talent—the future of firms.
The second trend is around finding savings through multiple office locations. At most law firms, about half of the employees aren’t lawyers, but professionals in administrative and operational roles. Since modern technology enables communication across geographies, some firms are saving money by relocating these non-revenue generating employees to offices in lower-cost metro areas, while keeping attorneys in their premier space.
The third trend is in how law firms are making the best possible use of office space. Mid- to large-size are still in contraction mode across the U.S.—giving up an average 17 percent of space upon relocating in 2014 in an attempt to right size. However, compared to global firms and other U.S. professional- and business-service industries, U.S. law firms on the whole remain hesitant to fully adopt contemporary, open-office plans.
These trends and others are discussed in more detail in our full report. Visit www.us.jll.com/2014law for more detailed trend info, charts, videos and webinar information.