London Law Firms Shrug Off 2016 Malaise And Get Ready For Active 2017
London law firms are set to experience an active 2017, despite heavy new liabilities, according to CBRE’s Law In London 2017 report that examines the office space usage of the largest 100 law firms operating in London.
New business rates will go into effect on 1 April that will instantly add a 19% liability to occupational costs. To rub salt in the wound, the recent Mazars case limits the circumstances under which occupiers can seek discounts, and some billing authorities are looking to apply this ruling retroactively.
But after 2016, when no significant deals were completed in London, law firms are charging into 2017. Freshfields has committed to 255K SF at 100 Bishopsgate for its new HQ. Sidley Austin is looking for 100K to 120K SF. Squire Patton Boggs is on the hunt for 80K to 90K SF, and Withers is looking for around 80K SF.
Experimenting With Flexibility
CBRE senior director Frances Warner Lacey said firms will continue to explore ways to increase space efficiency as well as pursue nearshoring, agile working and intensification of space. Lacey said a greater percentage of law firms’ budgets will be assigned to technology infrastructure to facilitate agile working practices. As part of the drive for efficiency, investment in artificial intelligence technology will continue and will inevitably have an impact on headcount.
The report revealed that 19% of the CBRE Legal 100 firms are now working in full open plan layouts compared with just 10% five years ago. Cost is a key benefit, as CBRE’s findings show that on average firms operating in open plan occupy 40% less space and pay 35% less per fee-earner than those operating in cellular. CMS, Bird & Bird, Pinsent Masons, Eversheds Sutherland, and Addleshaw Goddard all have open plan offices.
A further 10% are operating in mixed open plan/cellular configurations. The continued trend away from traditional ways of working is driven both by the need for more efficient space usage and to facilitate greater collaboration between teams.
