The dramatic change in big law firms from being run as a hierarchical club to a true business is no more apparent than in the change in office configuration. Real estate is an expensive perk. After lawyer compensation, office space is the next largest expense in large law firms. Historically, law firms have been inefficient space users, thanks mostly to allocating office size and location by lawyer ranking.
Law firm office occupancy changes
Yet a variety of forces are having an impact on how law firms are utilizing the square footage of their office space:
- Rising rents for Class A commercial office space
- Need to foster collaboration and flatten hierarchies
- Desire to attract and develop millennial talent
- Need to reduce overall costs
Firms are recognizing they need to balance the costs of those senior partner corner offices with these circumstances.
According to a recent article in Bloomberg Law Big Law Business, Nixon Peabody CEO Andrew Glincher found an effective way to handle pushback from some partners to the firm’s plan to switch to a same-size office layout in 2015. He told them they could have two offices and pay the difference, which he estimated between $12,000 and $15,000. There were no takers.
Right-sizing offices means equal size for all. Moreover, it shouldn’t be the material trappings that signal or determine the success of a law firm, but rather the cohesiveness and expertise of the attorneys. Firms will continue to reduce non-essential costs, using experts to assist, so they can focus more on delivering value to clients than showing off views to increasingly unimpressed clients.
Read the corner office article on the Bloomberg Law website.
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Natalya Berdzeni
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