Law firm take-up beats 5-year annual average

Break and expiry events combined with changing operational realities, accelerated by the pandemic, are leading law firms to line up new offices in the UK. This was evidenced by the 1.5mn sq. ft leased by law firms across the 12 major UK office markets in 2021.

Firms inking deals included:

• Latham & Watkins - 250,000 sq ft at 1 Leadenhall in London.
• Allen & Overy - 270,951 sq ft at 2 Broadgate in London.
• DLA Piper – 83,000 sq ft at City Square House in Leeds.
• Womble Bond Dickinson – 47,500 sq ft at The Spark in Newcastle.
• Shoosmiths – 32,900 sq ft at 103 Colmore Row in Birmingham.
• Brabners – 20,000 sq ft at 100 Barbirolli Square in Manchester.

It is worth noting that a large proportion of 2021 law firm transactions were pre-lets, showing that law firms are prepared to act early to secure scarce best in class space and providing further evidence of the sectors confidence in the future of the office.

Take-up varied by city, with London accounting for over 1mn sq. ft of 2021 law firm take-up followed by Leeds and Manchester. Markets that saw law firm take-up above the 5 year average were: London, Newcastle, Glasgow. Birmingham, Leeds and the South East.

Law firms remain committed to the office, recognising its role in supporting, facilitating and portraying business strategy. In particular law firms cited difficulties in training and developing junior lawyers, building cultural ties and developing deeper client relationships in a fully remote working environment. For some legal professionals, working from home all the time led to a decline in their mental health. A survey of over 3,000 lawyers by Douglas Scott found that one in four felt that working home all the time had a negative impact on their mental health.

However, it is clear that the law firm office is being reimagined. Looking at the drivers of leasing transactions in 2021 some common themes are apparent: sustainability, health and wellbeing, flight to quality, amenity-rich, highly connected, spaces designed with new ways of working in mind and centred around collaboration, innovation, client-centricity and learning and development. Indeed, 94% of law firm leasing transactions above 5,000 sq. ft in 2021 were for Grade A buildings.

Whilst there was expansion-led activity, most notably amongst the US law firms in London, it is clear that space efficiency is a primary real estate strategy for law firms. Our law firm (Y)OUR SPACE survey found that 71% of respondents intend to introduce more desk-sharing and hot-desking over the next three years.