Law Firms Shift Focus To Real Estate Efficiency And Creative Use Of Space

SEATTLE, April 1, 2015 /PRNewswire/ -- Leading global commercial real estate services firm Colliers International today released its latest law firm services study, the 2015 North America Outlook Report. Produced by the Colliers Law Firm Services Group, the report anticipates factors that will impact ways law firms use space and analyzes how important trends—such as changes in lawyer demographics and the evolving technology landscape—impact business. A key finding in this year's report reveals that law firms are increasingly focused on boosting efficiency and lowering real estate costs as the market slowly returns to pre-recession levels.

According to the report, law firms are transforming the way they handle their real estate transactions and utilize space as the legal field has shifted following the financial crisis. While the industry in North America is moving beyond the effects of the recession, the consolidations and extended transactions in the last two to-three years have resulted in slower activity. Firms are now focused on ways to drive costs down, and are exploring one-size-fits-all offices, in-boarding associates and potentially putting first-years and other legal associates into workstations.

"As law firms pay closer attention to their overhead, it is immediately apparent that real estate is a key asset that firms are able to leverage in order to further support business," said Steve Levitas, National Director of Law Firm Services, Colliers International. "We at Colliers are seeing the real estate implications on a regional, national and global level and have been working closely with clients to provide a real estate business solution that supports enhanced productivity and increased long-term profitability in today's ever-changing market."

Other key findings include:

• The rise and resistance of the workplace strategy movement. The workplace strategy movement leverages technology, telecommuting and sophisticated design to provide maximum flexibility for space and to reduce real estate costs, as well as allow law firms to become more efficient and reduce their footprint. However, many prestige firms are resisting the movement toward the universal office, creating a bifurcation in the market. These larger groups aren't as sensitive to real estate prices, and there is a sustained concern that a more streamlined office setup will be a detriment in talent recruitment.
• Growth of technology and commodity legal services. Legal services are being commoditized—clients will still pay top dollar for high-value legal services but are less enthusiastic about paying for process and content-related work. Disruptive technologies are coming in to take market share for commodity-based services.
• Reduction of surplus space.  Firms are also disposing of surplus space, and looking at strategies to make that happen more efficiently. Firms are beginning to leverage platforms, such as LiquidSpace and Regus, to add a revenue stream by renting unused space on a short-term basis.
• Nearshoring. Unlike offshoring, this strategy allows firms to protect confidentiality and intellectual property, and to serve customers in close proximity. While some firms are relocating parts of the business to a lower-cost, but nearby location, others are actually outsourcing the whole operational function of the firm, including accounting and human resources.
• New construction. Some large firms are considering space options five to seven years ahead of time to contemplate new construction. The advantage of a new building is that firm can implement improved space use strategies, creating more efficiency on a per-foot basis. The trade-off is that costs will be higher in a new building, though the investment may pay off in regards to recruitment.

Overall, there are regions of the country where the legal industry remains very strong. On the West Coast—particularly San Francisco and Silicon Valley—markets are solid because of venture capital and the emerging tech-related industries. Business in New York, along the Eastern Seaboard, and throughout the Mid-Atlantic States, is robust. However, Houston and Dallas may see a retrenchment as the typically robust energy markets have experienced a recent slide in oil prices.

For more results from the 2015 North America Outlook Report from Colliers International's Law Firm Services group, please visit http://www.colliers.com/en-us/insights/market-news/2015-na-law-firm-services-outlook-report.

About Colliers International
Colliers International is a global leader in commercial real estate services, with over 16,300 professionals operating out of more than 502 offices in 67 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. Colliers International has been recognized and ranked by the International Association of Outsourcing Professionals' Global Outsourcing 100 for 10 consecutive years, more than any other real estate services firm. 

For the latest news from Colliers International, visit Colliers.com, or follow us on Twitter (@ColliersIntl) and LinkedIn.

SOURCE Colliers International