We now live in a techno-savvy world whereby businesses, including law firms, have come on board and embraced technology. Most American law firms now have websites, social media platforms and other virtual engagement platforms to aid in the running of the law business. The biggest marketing platforms for law firms are no longer networking seminars and hotels but the internet platforms. Both small and big law firms can now compete for top clients equally.
The pandemic has proven that technology is the saviour that American law firms needs to fuel future success. Lawyers have had to work remotely thanks to technology. Law firm meetings and even court proceedings have now become virtual. Such occurrences have sparked a new conversation on law firms’ real estate. Law firms occupy a majority of office space in most cities but technology and more so the use of technology during the pandemic has ignited new considerations. Is renting a big office space necessary if lawyers can work and even attend court proceedings remotely?
As much as most aspects of law firm operations are going to change henceforth. The real estate is bound to experience the most significant change. Here are some of the projections on the future of American law firm and real estate.
A decrease in the square footage of office space
Pre-pandemic times had already started seeing a reduction in the square footage law firms signed up for in their leases. Subsequently, the current pandemic times have proven that remote operations are equally productive. The expectation, therefore, is that most law firms are going to decrease the square footage they lease henceforth. Pre-pandemic times had law firms seeking to renew their leases to reduce their footage by around 10.6 %. Hence the current anticipation is just how far law firms are going to cut on their office square footage post-pandemic.
Steady or increase of rent per square footage
The future prediction on gross rent per square foot is that the rent is bound to either remain steady or increase. It is important to take note; that for top tier law firms’ office space is among the strategies to attract top clients, talent and retain talent. Law firms, therefore, have to derive new strategies on recruiting and retaining talent. Lawyers that have just been admitted to the bar or experienced associates looking for placement are known to focus on the work environment when making applications. Despite the expected future changes in law firm real estate, law firms can still use compensation to attract top talent.
A decrease in the percentage of real estate costs
The past five years have seen a decrease in the percentage in revenue that law firms spend on rent. A more significant percentage of law firms are now finding ways of streamlining services. It seems like we are going to see a future where law firms are going to be more about virtual meetings and remote operations.
Every Law firm now has to be alive to the fact that technology is here to stay. Therefore the future of the American law firm will have to incorporate a holistic approach to operations