Law firms grapple with rapid changes in office environments | Business Observer

Just a decade or 15 years ago, if you were asked to picture the office space of a law firm, it probably would have gone something like this: You would likely have envisioned a formal environment with lots of private offices that got bigger and fancier based on attorneys’ seniority. You’d probably have imagined a law library, an elegant space filled with thick, bound books. And there’d be an area for storing boxes and boxes of documents.

‘The mentoring and camaraderie that come with being in the office, that’s a little more challenging when you’re trying to build a relationship with someone young on the phone or even on Zoom.’ Douglas Szabo, Henderson Franklin

But that’s not necessarily what law offices look like today. The internet, for one thing, means firms don’t need to devote a lot of space for book or document storage because so much of that information has moved online. Private offices remain a thing, but many firms have started to include more common areas or flexible space within the firm’s total office space.

Then COVID-19 happened.

“For the 20 years leading up to the COVID-19 pandemic, we were watching the gradual evolution of the practice of law requiring less space and moving toward more efficient use of space,” says Dean Cannon, the president and CEO of GrayRobinson, which has 14 offices in Florida (with locations that include Fort Myers, Naples and Tampa) and one in Washington, D.C. “If you think of what COVID-19 did, it took a process that was happening in a slow cooker and stuck it in a microwave.”

Courtesy. Shutts & Bowen has created an outdoor space at its Tampa office.

According to the 2020 National Legal Sector Benchmark Survey — Bright Insight from the Legal Sector Advisory Group of global real estate services firm Cushman & Wakefield, square footage occupied per lawyer has decreased over the past several years. But the bar was set high: Through the first quarter of 2020, 90% of firms still devoted, on average, more than 600 square feet per attorney.

The survey also found that in 2019 the average cost of real estate as a percentage of firms’ gross income was 6.2%. In lawyer lingo, that’s an opportunity to mitigate expenses. “Real estate is one of those areas that law firms have taken a much bigger look at in terms of the fact that it’s generally a firm’s second-largest expense,” says Todd Rains, the chief administrative officer for Shumaker, with offices in Sarasota and Tampa as well as five other U.S. locations.

Periods leading up to lease renewals can give firms the opportunity to evaluate their space and either investigate giving some back to landlords or negotiate tenant improvement dollars to renovate existing space for more efficient use. Cushman & Wakefield’s Bright Insight survey found that law firms that signed new leases or renewals in 2019 had decreased their occupied square footage by an average of 10.6%.

In the past year, GrayRobinson, for example, has made footprint reductions in its Fort Lauderdale and Jacksonville offices and recently completed a sublease of about 22% of its space in Orlando. But it also recently relocated its Gainesville office to a location with more square footage. “We’re looking all around at whatever fits that particular market best,” Cannon says. “As with all things, it’s driven by client need.”

Long term plans

Like in many other industries, remote work has become a hot topic in the legal field and an area firms look at when evaluating space needs. The pandemic forced law firms to experience how things operated when attorneys and other employees worked from home — something not necessarily widespread before.

“A lot of lawyers who used to believe there’s no way I can practice without physically being 10 feet away from my secretary and paralegal found out, actually, yes they can,” Cannon says. “We all have learned a valuable lesson that we could do more than we thought we could. That’s a really positive byproduct of COVID-19.”

Most firms were able to make the work-from-home transition relatively easily and quickly, thanks to investments in technology made over the years for general future planning and such things as hurricane resiliency plans. Now even if many attorneys have returned to the office in some capacity, firms are looking at where remote work fits into their overall future plans. Cushman & Wakefield’s Bright Insight survey found that in the second quarter of 2020, 90% of respondents say they expect more than 10% of attorneys will work remotely on a regular basis.

“To be frank, we were not looking at doing anything like that prior to COVID-19,” says Russell Schropp, the managing lawyer at Henderson Franklin, which is headquartered in Fort Myers and has offices in Bonita Springs and Naples. “We had kind of a traditional model and culture where you come to the office to work.”

But the firm’s experience during the pandemic has opened its eyes to future possibilities. “We’ve kind of realized that we can do a pretty good job working from home for the most part,” Schropp says. “So we’ve undertaken an evaluation of what we might do for work-from-home and work-from-the-office arrangements moving forward once COVID-19 is past us.”

Courtesy. Todd Rains, chief administrative officer for Shumaker,

It’s not all or nothing approach. Although most firms haven’t struggled with remote work, firms like Henderson Franklin have found it works better for some practice areas (such as real estate and tax law) than it does for others (such as litigation). “There are challenges but also opportunities, so we’re trying to anticipate what both those challenges and opportunities are and plan accordingly,” says Douglas Szabo, the managing lawyer-elect at Henderson Franklin.

Of course, just like other industries, WFH comes at a cost in lost face-to-face time. “In-person collaboration is impacted by working from home,” says Mike Dal Lago, the founder of Dal Lago Law in Naples. “It’s not as easy to go down the hall, knock on somebody’s door and just talk to them about an issue you’re having on a case where you just need a sounding board.”

Szabo says it’s also difficult for experienced attorneys to mentor younger lawyers virtually. “Younger attorneys are tech savvy, and that’s great,” he says. “But the mentoring and camaraderie that come with being in the office, that’s a little more challenging when you’re trying to build a relationship with someone young on the phone or even on Zoom.”

Although safety precautions have been the driving force behind the way law firms have been operating lately, many attorneys say there’s no replacement for the intangible benefits that come with taking depositions or developing client relationships in person or the casual office conversations that help create a strong corporate culture within a law firm.

“That ability to shake a client’s hand and look them straight in the eye — Zoom is not the same,” says Damian Taylor, a partner at Coleman, Hazzard, Taylor, Klaus, Doupé & Diaz in Naples. “We like the social benefits and the feeling of being connected with each other that come from having the capacity to have everybody physically present on a given day.”

Reevaluating real estate

Courtesy. Russell Schropp, Henderson Franklin

Although remote work does have its downsides when it comes to interpersonal connections, it has some benefits when it comes to real estate. Shumaker’s Rains sees remote work options as a way for firms to address office space issues. Options like shared office space, hoteling (providing office space on an as-needed basis) and hot desks (where employees use any desk available at a given time) allow firms to have a mix of employees, where some work in the office regularly and others work remotely and come into the office when needed.

“And what that really does is it enables the firm to pursue their growth plans more aggressively,” Rains says. If you have 20 attorneys working in a hybrid capacity who used to have 20 individual offices but can now share 10 offices, for example, that suddenly frees up 10 offices for additional hires.

Courtesy. Douglas Szabo, managing lawyer-elect at Henderson Franklin

It gives firms a lot to think about in planning for a post-pandemic world — whatever that looks like. “I think where law firms are now is they’re looking to get their remote work plans aligned and adopted and functioning for the long term,” Rains says. “There will probably be more active engagement with landlords in terms of space utilization, give backs and redesign.”

Shumaker currently has about 163,000 square feet of leased office space, and Rains expects the firm to take a hard look at things as leases come up for renewal for its Sarasota and Tampa offices, as well as its Columbus, Ohio; Charleston, S.C.; and Charlotte, N.C. offices. “We are right there in that mix of looking at our remote program and making recommendations on how that might work for us,” he says.

Flexibility will be important for firms going forward, something Shutts & Bowen has already seen at its Tampa office. The firm has about 48,000 square feet of space spread over two floors in Tampa, and prior to the pandemic it had begun creating a collaborative area that included both indoor space and a large outdoor terrace designed amid several towering oak trees. That highly functional outdoor space, planned before the pandemic, has proved incredibly beneficial in these times.

“Because it’s so large and outdoors and private, even clients are enjoying it,” says R. Alan Higbee, the managing partner of Shutts’ Tampa office. “We get clients who are comfortable with that who would never be comfortable in a restaurant (or another indoor space), but they love it because it’s outside.”

Higbee says the office has always been collaborative, nimble and flexible — important attributes with pandemic uncertainty swirling. “I don’t think we know what the future brings,” Higbee says. “I think the key is going to be to be nimble and flexible and be able to roll with whatever comes at you.”

 

 

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