Atlanta Law Firms Hit The Market With Vacancy At All-Time High

Bradley Arant Boult Cummings began a search for a new Atlanta office with a record 50M SF of office space on the market.

For a law firm looking to make its debut in the metro area, the record levels of vacancies found it fielding pitches from landlords around the city offering to beat their competitors' rents or trying to top how much they'll cover on their interior construction.

“There were a lot of options at the time we were making a decision," said the firm’s managing partner, Sibley Welch. 

Bradley Arant ultimately landed at Promenade Tower in Midtown, quickly growing from an initial roster of 20 attorneys to 50, and increasing their office space to take nearly an entire floor, Welch said. 

The firm's experience is part of a larger surge in office activity in the Atlanta legal sector.

Law firms leased nearly 500K SF in Metro Atlanta over the past year, according to data compiled by Avison Young, with some of the city’s largest firms either having secured new space or actively scouting the market for new digs.

The most prominent move so far has been Morris Manning & Martin, which leased 100K SF at Two Alliance Center, with plans to pack its suitcases from its 130K SF office at Atlanta Financial Center. Another 25 law firms in Atlanta with at least 20K SF are facing office lease expirations through 2027, according to Avison Young. 

Alston & Bird, Atlanta's largest law firm, is scouring the market in anticipation of the 2028 expiration of its 340K SF lease at One Atlantic Center in Midtown. Eversheds Sutherland and Greenberg Traurig are also assessing their office options as their current leases approach expiration.

Eversheds, among the 10 largest law firms in Atlanta, plans to move out of its 180K SF space at 999 Peachtree and into an office at the iconic Bank of America Plaza tower that's half the size, the Atlanta Business Chronicle recently reported, citing sources familiar with the deal.

Atlanta isn't alone in seeing a spike in leasing activity from the legal sector.

Law firms leased 8M SF of office space in the 10 largest U.S. legal markets in the first half of 2024, according to a Cushman & Wakefield report. The second quarter alone was the third-best quarter in the past five years and the highest Q2 on record for law firm leasing in the U.S., according to the brokerage firm.

At this rate, law firms are set to ink 15M SF in leases by the end of the year in the 10 largest markets, including Atlanta, Los Angeles, Dallas and New York, according to Cushman & Wakefield.

But experts who spoke to Bisnow said that despite the plethora of office space available and aggressive terms, many of the larger law firms in the city are shrinking their footprints.

“Most of them are downsizing because they’re still not fully 100% back in the office,” said David Todd, a senior vice president at CBRE. “So they’re becoming a little more efficient.”

Todd represents Greenberg Traurig, which leased the top five floors at Terminus 200 in Buckhead back in 2010. He declined to comment on the firm’s search status. 

Despite nearly 30% of Atlanta's office market sitting vacant, there are nuances to what concessions tenants are able to get from landlords in terms of rate, Bradley Arant partner Stephanie Friese told Bisnow.

Many law firms focus on the city's top trophy buildings, especially in Midtown, where demand and occupancy are strong despite the overall market malaise. In those instances, landlords have a better time holding their rental rates, Friese said. 

Some firms in recent months have taken the opportunity to downsize their office footprints while upgrading to swankier office towers. The tradeoff means the firms are keeping their overall rental costs down and moving to better offices.

“The bigger firms are all doing what everyone calls flight to quality, but it’s really a flight to downsize,” Todd said.

The downsizing of large law firms in Metro Atlanta isn’t a new phenomenon. A decade prior, law firms reduced their office footprints as technology negated the need for sprawling law libraries in their spaces.

But the biggest driver of space reduction today, especially for firms with a national presence, is the streamlining of their footprints to create a national standard of office sizes for their staff, Highwoods Senior Vice President Heather Lamb said. 

“They’re downsizing. The partners' office sizes are decreasing,” Lamb said. “If you’re this level partner, you get this size office.” 

In the past, attorney office sizes were determined based on the seniority of the partner — the more prominent the lawyer, the larger the office. Now, many firms are eschewing that aesthetic and embracing smaller offices.

“A lot of firms are moving to single-sized offices or at least two-sized offices,” Savills Vice Chairman David Rubenstein said. “What they’re doing, though, is becoming more efficient with how they lay out the offices themselves. If everybody gets the same sized office, it’s a lot easier to migrate offices around the space.”

Welch said Bradley Arant embraced this trend with its office at Promenade Tower.

“The thought process behind it is everybody is treated equally,” she said. “So whether they’re a partner, associate counsel, it doesn’t really matter what the title is. Everybody is treated equally.”

At the same time, Welch said the smaller, standardized offices help the firm control its rents.

“It was important for us to be budget-sensitive to things and to think about the partners' money,” she said.

But for law firms, streamlining office footprints isn’t the sole motivation in choosing office space. Like other corporate office tenants, law firms are looking for spaces with an array of amenities in desirable locations to lure their partners back to the office more often.

It’s especially critical for law firms, which need senior partners to be at the office to mentor younger lawyers and associates, brokers said.

“Law firms are saying the partners can’t mentor the junior attorneys by Zoom,” Todd said. “They got to be there with them.”

Aside from the Midtown location, Welch said Promenade also had bells and whistles that make it attractive to the firm’s attorneys, including the Lawyers Club of Atlanta on the top floor so they can host private meetings and parties. The Lawyers Club is a members-only social club for the legal community.

While other firms struggle to lure attorneys back to the office more often, Welch said Bradley Arant doesn’t have that issue. It has no official back-to-work policy in any of its Southeast locations. 

“Most of us are here on a quite consistent basis unless people are traveling for work,” she said. “Others struggle with that as people have embraced remote work.”