Law firms opt for office relocations as attorneys return to in-person work

A boardroom is seen at the legal offices of the law of Polsinelli in New York City. June 3, 2021. REUTERS / Andrew Kelly

Register now for FREE unlimited access to Reuters.com

  • Relocations accounted for 63% of firm leasing transactions by square footage in first half of 2022, survey says
  • Total office leasing was at 1.6 million square feet in Q2, compared to 1.1 million in Q1

(Reuters) – Law firms leasing office space chose relocations rather than renewals in the first half of the year at a level not seen since before the COVID-19 pandemic, according to commercial real estate brokerage Savills Inc.

Relocations have made up 63% of law firm lease transactions by square footage through the end of the second quarter, compared to 51% in 2021 and 30% in 2020, a newly released Savills survey of firm leasing activity said. Savills tracks law firm leases over 20,000 square feet across major US markets.

The relocation decisions in 2022 look more similar to pre-pandemic figures, when 58% of transactions by square footage were relocations in 2019 and 67% in 2018, said Savills.

Register now for FREE unlimited access to Reuters.com

The shift comes as some law firm leaders are reconsidering their office spaces, after lawyers and staff have worked remotely for much of the COVID-19 pandemic. Many large firms started widespread return to office plans earlier this year, typically on a hybrid schedule.

A separate Savills survey of the top 100 US firms by revenue released this week found 61.9% of partners are expected to be in the office three to four days per week, while 4.8% are expected to be in one to two days per week and 33.3 % can go in as often as they want.

Tom Fulcher, chair of Savills’ legal tenant practice group, said firms now feel “more of a sense of confidence” about how to accommodate a new balance of in-office versus remote work than they have in the previous two years. They at least know enough to “start being able to make long-term commitments” to new office spaces, he said.

“Soft” market conditions favorable to tenants are also contributing to relocations, the report said.

The law firms in the Savills survey leased a total of 1.6 million square feet overall in the second quarter of 2022, picking up after a slower first quarter that saw a drop to 1.1 million square feet leased from over 1.5 million the previous two quarters.

The total increased as seven transactions were over 100,000 square feet, a threshold that no deal met in the first quarter, Savills said.

In the long term, legal leasing volume may drop as firms rethink their needs, and the number of “dedicated” offices decreases and shared spaces increase, the report said.

Savills’ survey of the top 100 US firms on work flexibility found 42.9% of respondents are putting in place hoteling or a “shared approach” to using offices.

Read more:

Law firm leasing dips amid industry’s revamped office plans

Register now for FREE unlimited access to Reuters.com

Our Standards: The Thomson Reuters Trust Principles.

Sara Merken

Thomson Reuters

Sara Merken reports on privacy and data security, as well as the business of law, including legal innovation and key players in the legal services industry. Reach her at [email protected]

.

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker