Chicago’s CBD office market closed out 2017 with over 700,000 square feet of positive absorption despite a 19 percent jump in direct vacancy. This discrepancy is largely attributable to new building deliveries and vacating shadow space.
For the city’s large law firms, a similar trend is taking place. Looking to maximize efficiency and attract new talent with appealing and innovative layouts and designs, many firms are opting to consolidate space, according to a recent report from CBRE.
Law firms, especially those leasing 75,000 square feet or more, continue to reduce their square-footage when opportunities arise in a bid for increased efficiency. Looking over the past 24 months, the CBRE report found that approximately 70 percent of large law firms in Chicago have contracted their space when completing a lease transaction. The 25 largest firms average 800 square feet per attorney but are targeting between 550 and 650 square feet per attorney as the downsizing trend continues
“Law firms are continuing to drive for efficiency with their space and we don’t see this trend changing anytime soon,” said Todd Lippman, vice chairman with CBRE and member of the firm’s law firm practice group. “As more law firms see the benefits of adopting new workplace strategies, both for financial and functional purposes, the square footage per attorney will continue to decrease and firms will be able to do more with less space.”
Technological advancements are also driving many real estate choices for the legal sector. A move toward a paperless environment is eliminating the space needs for law libraries and file storage—once the staples of any law firm’s office. As information digitizes and these spaces are eliminated, firms are opting to creating more open, social environments for collaboration in a smaller footprint.
Individual offices are changing as well, as many firms are moving away from two standard offices sizes to a one-size, glass format, with seniority being represented by location. In this environment, associates and partners can expect to have the same personal work space. All of these changes create an office setting that is more appealing to younger attorneys who value workplace environment and culture as major perks.
“The Chicago legal landscape is experiencing a talent war—recruitment and retention has become much more competitive,” said David Mahoney, senior vice president with CBRE. “Firms are changing their work environments as they find that the next generation of attorneys care less about office sizes and more about natural light, technology, amenities and collaborative spaces.”
Some recent strategies in the legal sector include shifting emphasis from grand, ceremonial client spaces to functional meeting spaces and orienting the reception area around hospitality, with concierge services and hosted events.
Firms are also cutting space through employee reductions with the ratio of secretaries to attorneys changing from four-to-one to 10-to-one. Additionally, decentralizing the support staff disperses them throughout the office and better maximizes interior space.
Cafeteria spaces have evolved from merely a spot to eat to a place for employees to socialize, usually in a prominent area such as along a window line. Firms are also creating smaller, on-demand meeting rooms with interactive technology scattered throughout the practice area.
Chicago remains the fourth-largest legal sector in the country, with approximately 40,000 law firm employees. Half of these are in the central Loop area while the West Loop is the second-largest submarket for legal workers, with 31.6 percent.