Leasing activity among law firms remained strong during the first half of the year, with 2.5 million square feet of space leased during the second quarter and a total of 5.9 million square feet leased during the first half. That represents the highest first-half volume since 2018 and signals sustained momentum as firms adapt their space strategies to evolving business and workplace needs, according to Savills' Q2 US law firm activity report.
Thirty-nine percent of firms moved to similar or older buildings during the first half, up from 35% during the first half of 2024. Thirty-four percent of renewals and relocations were expansions, up from 33.3% during the same period last year, the report found.
The report considers legal sector leases over 20,000 square feet.
Quarterly leasing performance this year of about three million square feet is outpacing 2024’s quarterly average of 2.5 million square feet, which was the strongest leasing pace in more than five years.
“This sustained momentum reflects renewed confidence in long-term office commitments and underscores the legal sector’s steady re-engagement with the workplace,” said Savills.
Nearly 60% of firms decided to renew their lease during the first half. The decision to stay is driven by a limited number of newer, high-quality options in most markets and the rising cost of tenant improvements.
The top law firm lease during the second quarter was Goodwin Procter’s 244,000 square foot relocation to 200 Fifth Avenue in New York. The deal reaffirmed the city’s strong appeal to high-profile firms and helped it lead all markets, accounting for 28.7% of total legal leasing volume. Washington, D.C, ranked second, with 14.2% of total law firm square footage.
Firms were as likely to expand as they were to downsize during the quarter, with 34.1% choosing either option, while 31.8% of firms maintained their current footprint without significant changes. On average, downsizing firms reduced their footprint by about 23,000 square feet and expanding firms increased their footprint by 20,500 square feet. These transactions resulted in a net decrease of 50,794 square feet of legal tenant footprint.
The study found that lease terms, which used to vary significantly, have begun to converge following the pandemic and differences in average lease length have narrowed. Some firms are opting for longer lease terms to offset rising costs or to secure premium space, while others favor more flexible terms and have been able to leverage soft conditions in more tenant-friendly markets, Savills said.
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