If it’s possible to find high rents in contempt, law firms are doing it in higher numbers than ever this year, marking a trend of downsizing to smaller, more intimate office spaces.
With an average lease that measures 18,600 square feet, large firms are responsible for occupying 4,195 fewer square feet than they did just two years ago – a measurement that is at the lowest point since the commercial real estate recovery took hold in 2009.
Rising office rents and a stalled legal services field are to blame. In fact, the Bureau of Labor Statistics notes that legal services employment growth has averaged less than half a percentage point each year almost a decade. What’s more, the gross rent for spaces leased by law firms has increased by 26 percent since 2009, going from $32 to just over $40 per square foot.
As a result of the economic and market shifts, more law firms are doing away with the perks of a corner office. Instead, larger legal businesses are using universal or standard-sized office spaces that measure roughly 150 square feet per employee – no matter their rank within the firm. Not only does this configuration allow for a more economic use of office space, it also translates to lower transition costs in the case of a newly-promoted partner or retiring senior employee.
For most large law firms, the shift to a smaller space is gradual, but some businesses actively seek out and move to a smaller footprint to conserve space and financial resources. New, efficient construction becomes even more desirable in these instances, combining the economic perks with favorable aesthetics and employee benefits such as natural lighting, updated layouts and better IT infrastructure.
The move to smaller spaces presents interesting opportunities for parties on either side of a lease, and it’s a trend the professionals at Intelica Commercial Real Estate are tracking with interest. If you’d like to know more about the office space opportunities currently available in the Midwest market, reach out to us today.