Even before the pandemic drove the global economy towards laptops and dining tables, physical offices were going out of style in the business world. International companies like the Big Four accounting firms have been experimenting with hotel and similar concepts for years to reduce their real estate footprint. Once the COVID-19 crisis was in full swing, that trend set in. Tech companies like Facebook, Google and Intel have advised their employees to work from home at least until the summer of 2021. REI recently decided to sell rather than move into its brand new, state-of-the-art headquarters campus. The long-predicted future of remote working seems to have finally been forced upon us.
Although law firms have generally followed the trend of remotely operating their workforce, many in the legal world continue to predict a return to the office. There seems to be little appetite among the managing partners of the law firm I spoke to for making the current state of affairs permanent. Most expect permanent change, but also believe that the overall long-term effects will be less than most expect. To my surprise, several law firm leaders have even set a strategic priority to get back to pre-pandemic normality as soon as possible once COVID-19 is finally contained.
Are these law firm leaders forward-looking, non-contact or simply tied to long-term leases? The answer can be all three.
The only constant is change
The law has traditionally been slow to embrace changes in the wider business world, but in this case I find it hard to imagine that 2022 and beyond will see law firms look like 2020. For starters, many lawyers may find that they have developed a taste for not being tied to one physical place. Nobody loves spending time on a commute that could instead be used for loved ones, personal improvement, extra billing, or a few more twinks. There is also something nourishing for the soul to have a lawsuit or finish an eight-figure negotiation while wearing ugg slippers. Running a law firm that expects everyone to return to the traditional 50 hours a week in the office is likely to find resistance to this notion as the pandemic proves we can get the job done in our guest rooms and guest houses.
Then there is the pure dollar-and-cent argument. With office rents popping up and companies considering their next move, the temptation to save money on rent must be great. Real estate is usually the second largest item on a company’s expense report after staff. Every dollar saved there is left over when the partnership is distributed at the end of the year. Most partnerships would cut costs and fatten their wallets.
What stays the same
However, I don’t expect the legal real estate market to go away overnight. There are at least two strong reasons for companies to have at least some dedicated office space: collaboration and customers.
Office space encourages collaboration in both overtly practical and less overt, squishier ways. Some practices cannot be operated on a laptop and cell phone basis, while others cannot. Litigation attorneys sometimes still need to store and review physical documents and evidence. Many mediators still prefer conference rooms to zoom breakout rooms for negotiations. Transaction attorneys may find that deals are closed in person on better terms, with no delays and disruptions from Microsoft Teams. It makes sense to have dedicated space to meet these needs. Even the most dedicated cloud-based law firms like Fisher Broyles have office space. In the meantime, the jury is still unsure whether companies with stationary roots can make the transition to a digital world while keeping morale high and feelings of isolation low.
For better or for worse, there is also a subset of clients – albeit a diminishing one – who may still be drawn to the shiny objects of a fancy law firm. There are people who, by the pile of carpets or the sheen of lobby sculpture, want to know that the company they are trying to hire is smart, strong, and expensive enough to make their time worthwhile. Some decisions about hiring a law firm may still be made when the elevator rings and the customer enters the reception area. It may seem like an empty theater, but if it matters to some clients we have to take it seriously.
Where it gets weird
What seems less and less important every day are the luxurious private law firms that so many of us associate with the basic concept of a lawyer. Here I see the biggest overhauls of the traditional law firm blueprint. Some companies may give up their offices entirely to work from home or switch to hotel concepts like the Big Four. Others may give their lawyers the option to pay for office space and furniture out of pocket. Still others may have offices that are half the size of their current floor space. I expect experimentation with office solutions and ultimately, far more bespoke, less expensive models for office in the legal industry than anything we’ve had in the past few decades.
In the meantime, I wouldn’t be the least bit surprised if some of the savings from downsizing law firms didn’t go towards upgrading the remaining space. This is especially true when the greater market demand for commercial property falls and prices fall. A portion of the savings can be used to forecast success for new and current clients, or to promote and develop the morale and corporate culture of lawyers and employees through improved common and collaborative spaces. Firms looking to downsize their law firms but keep their staff happy may experiment with lounges, coffeehouse-like spaces, quiet spaces, nursing homes, and other common goods that provide community and enjoyment in far less expensive ways.
I am optimistic about Biglaw’s prospects for experimentation and growth. The incentives, both personal and collective, personal and purely financial, are all geared towards moving us towards more effective, interesting and tailored real estate solutions.
Regardless of how these new offices take shape, you can be sure that lawyers and other legal professionals will float in and out of the room much more regularly. The days of five or six days a week in the office are gone forever – no matter how hard some law firm leaders try to eliminate them. In a competitive world, when companies fail to apply flexible remote working policies, employees are left to the companies to do it.
After all, why should we have to choose Uggs or Dress Shoes when we can have both?
James Goodnow is the CEO and managing partner of NLJ 250 company Fennemore Craig. At 36, he became the youngest known executive director of a major law firm in the United States. He has a JD from Harvard Law School and two corporate governance certificates from MIT. He is currently attending the Judge Business School at Cambridge University (UK), where he is working towards a Masters in Entrepreneurship. James is the co-author of Motivating Millennials, which ranked number one on Amazon in the Business Management New Release category. As practitioners, he and his colleagues created and operated the technology-based practice and business model of the plaintiffs. You can connect with James on Twitter (@JamesGoodnow) or by emailing [email protected]