X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-Law firms, which are playing a large role in the Downtown office market as well as development decisions, are scaling back their space requirements while increasing tenant improvement costs by keeping up with technology. Those are among the findings in Julien J. Studley, Inc.’s national law firm benchmark survey.

With large law firms Mayer Brown Rowe & Maw, Sidley Austin Brown & Wood, Katten Muchin Zavis Rosenman as well as Bell Boyd & Lloyd either in negotiations or in the market for new space, their moves are affecting owners of existing buildings and projects needing a large anchor tenant. While two Wacker Drive projects are poised to start pending signed leases, law firms have accounted for 7 million sf of lease deals so far this year, according to the tenant rep firm.

“The bottom line is much more important to law firms than it’s ever been,” Julien J. Studley senior managing director David Gelfand tells GlobeSt.com.

As a result, firms that usually made leasing decisions based on 900 sf to 1,000 sf of space per attorney are dialing back, with 70% of firms now allocating less than 800 sf per attorney. Litigation practices are opting for the tightest quarters, Gelfand says, averaging 500 sf per attorney.

“The more efficiently firms use their space, the more profitable they become,” says Gelfand, himself an attorney.

Lease payments still run somewhere between 5% to 10% of a firm’s revenues, Gelfand says, but Studley’s report finds 70% of the firms spending less than 8% on office space. However, he tells GlobeSt.com that technology is emerging as some firm’s second-highest expense. While 60% of the firms reported spending less than 7% of revenues on information technology, Studley’s researchers opined the result may have been skewed by a down year following a decade-long technology explosion and Y2K.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.