How the most sophisticated law firms are approaching the use of office space

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While nothing will replace the traditional real estate cliché that it’s all about location, location, location, today law firm’s real estate also needs to be about flexibility, flexibility, flexibility.

Corporations and law firms that make 10 to 15 year plans for their office space needs often find that their plans are no longer workable within two years. The smart money realizes that the focus has to be on maximum flexibility: an office that’s adaptable to a fast-evolving business environment needs space design that ensures that the firm’s real estate investment today ensures a desirable workplace tomorrow. The smartest companies and firms will plan for the future by negotiating for maximum lease flexibility, including expansion rights, early contraction and termination rights, and rights to assign and sublease.

The Southern California legal communities are responding to a few underlying drivers in their approach to office space design: evolving business trends, technological advancements, and generational/cultural shifts.

Evolving Business and Geo-Economic Trends

Most companies and corporate law firms are experiencing the need to work leaner, with increased competition and fewer exclusively loyal clients. For law firms, clients now view many legal services as commodity work, resulting in more fixed-fee assignments and negotiated or discounted billing rates. Further, Los Angeles, and California are no longer perceived as business-friendly environments. In the past five years, eight of the 23 of the Fortune 500 firms that made L.A. their homes have left. The proliferating start-ups that are replacing larger companies, dependent on venture capital, can’t pay traditional corporate and legal billing rates.

Technology

Digital filing has dramatically reduced law firms’ need for onsite paper storage. Keeping a library of paper documents has become obsolete, as resources become instantly available on the Internet, and a younger generation of workers and associates prefers to access and assimilate information electronically.

Cultural Changes

Baby-boomer law executives and senior administrators work in distinctly different ways from Millennial junior employees and law firm associates. Instead of working in their offices on their own, Millennials use multiple spaces: individual offices, conference rooms, teaming rooms, and the lunchroom. Younger workers also demonstrate the desire to achieve a balance between their professional careers and personal lives, and are concerned about environmental issues, preferring a greener workplace.

Changes in Law Firm Design

The biggest change in office design is the separation of public spaces from “work” spaces, along with a new flexibility. Public conference centers feature upgraded finishes and enhanced amenities, reinforcing a company’s or law firm’s brand. Full-floor and multi-floor companies are moving their lunchrooms and dining areas from the interior space to the window line, and incorporating a “touch-down” lounge featuring refreshments, wireless connectivity, and flat screens streaming live news channels. The kitchen is no longer built as a staff lunchroom, but functions as a multi-purpose “family room” gathering place. For a more inviting, coffee house ambiance, some corporations and law firms outsource coffee and food services to popular national vendors.

The prevalence of computers has shifted corporate staffing requirements, reducing the ratio of executives, managers and partners to administrative support. A new design concept is the one-size-fits-all office. Individual offices for senior as well as younger employees will become smaller, reducing occupancy costs. Enhanced connectivity also allows individuals the flexibility to telecommute. For some companies today’s trend is for employees to be out of the office for a significant percentage of their time.

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For more information, contact Tom McDonald

 

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