Legal Business Blogs

Law firms set to downsize offices as profession faces 4.9m sq ft of lease events in London by 2021

The legal profession is set to see a spate of downsizing of its real estate holdings according to CBRE’s Professional London report with legal occupiers having breaks or leases expiring covering 4.9m sq ft over the next six years.

The report cites the recent trend for law firms to take the opportunity of breaks to downsize such as CMS Cameron McKenna’s move from Mitre House to Cannon Place that saw the firm take up 140,000 sq ft, less than its previous 190,000 sq ft space. This is combined with the trend towards north-shoring and near-shoring with law firms establishing lower-cost outposts outside of London.

Any downsizing is expected to see a rise in employee density with staff numbers expected to rise by 9,700 and with law firms continuing to provide one desk per employee – more than accounting firms and management consultancies which currently fit 1.25 people to a desk and a projected 1.75 by 2019.

Instead of cutting down on the number of desks, the report refers to a growing debate in the legal sector around whether to go open plan or not. It finds that ‘the majority of the top-tier UK and US law firms have opted to remain cellular, but still plan to use their space more efficiently by increasing densities.’ It does point to some firms that have adopted open-plan working, such as CMS Cameron McKenna, Pinsent Masons and Fieldfisher.

CBRE quotes Douglas Peniston, Fieldfisher’s operations director, saying: ‘Compared to the big accountancy practices, our lawyers spend more time in the office than out with clients so there just isn’t the same incentive to have fewer desks than people.’

Looking at the current market, the real estate services adviser finds an overall increase in take-up of new leases by law firms compared with the years following the financial crisis – partially driven by a trend towards downsizing through moving. Central London take-up for legal services averaged 600,000 sq ft a year from 2009-12 but in 2013 and 2014 that rose to an average of 800,000 sq ft.

It also found that the average current space-per-fee-earner is 490sq ft and that while there is a move to more flexible working it is much less pronounced than in other professional services.

However, the report does find there is a consensus among professional service firms of the importance of workplaces. Some 92% of firms surveyed by CBRE said workplaces were key to enhancing employee satisfaction, and 83% said it promoted productivity.

Professional services are also using their workplaces to bolster their recruitment efforts. Location was placed as the most important aspect for attracting and retaining talent, followed closely by technology, while workplace design and style also featured prominently with facilities such as gym and canteen at the bottom.