Law Firms Shrinking Their Footprints

“What we’re seeing in some ways is a changing of the guard,” David Mahoney, senior vice president with CBRE, tells GlobeSt.com.

CHICAGO—Large law firms in Chicago continue shrinking their footprints as technology and new workplace strategies allow for more efficiencies, and the pace of these changes is accelerating, according to a recent report from CBRE. In the past 24 months in Chicago, approximately 70% of law firms requiring 75,000 square feet or more have contracted their space when completing a lease transaction. But it’s not just about efficiency and cost.

“What we’re seeing in some ways is a changing of the guard,” David Mahoney, senior vice president with CBRE, tells GlobeSt.com. As new associates join firms, they bring in their beliefs on what constitutes an appealing workplace. Younger attorneys value collaborative environments and a less hierarchical workplace culture, and that, along with a desire to win the war for new talent, helps convince partners to transform their spaces.

That same process has already largely transformed the corporate world. And although law firms began replacing law libraries and huge file storage rooms with electronic storage in the past five to seven years, Mahoney says many were a bit more reluctant to create the more open, social environments made popular by tech and creative firms.

“One of the biggest obstacles faced by law firms is that there is a very high sensitivity to privacy issues,” he says. After all, confidential discussions between clients and their attorneys are the norm. Therefore, far more than other businesses, “law firms need walls.”

Hines’ River Point development at 444 W. Lake St. opened in 2016, and landed several top law firms as anchor tenants.

Many firms have switched from two standard offices sizes to a one-size, glass format, an environment that allows clients privacy, gives associates and partners the same personal work space, and allows natural light to flow through the entire office. And ditching the libraries and storage gives firms the option of adding the amenities and collaborative spaces desired by their new recruits.

“Law firms are creating areas that are not just lunch rooms people use for two hours a day,” Mahoney adds. Instead, they favor true cafes that provide the kind of relaxed atmosphere that attracts users at all hours. “It’s a better use of your dollars.”

Currently, the 25 largest law firms by square footage in Chicago average 800 square feet per attorney, CBRE finds. As the downsizing trend continues, most will aim to achieve between 550 and 650 square feet.

The recent opening of several new trophy towers in the West Loop has helped accelerate this transformation. “It gave some of the big firms an opportunity to start with a clean slate,” Mahoney says. 444 W. Lake, for example, which opened in the fourth quarter of 2016, landed law firms McDermott, Will & Emery and DLA Piper as anchor tenants.

The Central Loop area is home to 50% of legal workers, with 31.6% in the West Loop, the second-largest submarket. And as it will soon see new developments such as 110 N. Wacker by Riverside Investment & Development and Howard Hughes, or John Buck’s tower at 151 N. Franklin, “we continue to see a shift toward the West Loop,” Mahoney says. “There are still law firms that have not had the opportunity to change because their current leases have not yet expired.”