This article was originally included in Chicago Lawyer Magazine’s Office Space Survey edition for Nov. 2018, under the title ‘2018 Office Space Survey: A Breakdown by the Numbers of Where Law Lives in Chicago.’
By Paul Dailing
Editor
It looks like a law firm.
It has scenic, watery views of both river and lake. It has coffee, a reception desk and a long, wooden conference table where a group of lawyers and soon-to-be-former mates are negotiating the dissolution of a marriage.
It looks like a law firm — and, in fact, used to be the Chicago location of a multinational whose name you would know, and who still works on a different floor of the building — but Amata Law Office Suites is not a law firm.
Instead, the space is a “plug and play” workplace for small firms, solos starting out and established attorneys who want a downtown mailing address and a receptionist who will say the firm’s name to clients who call in on the firm’s number.
“You can contract on a Friday and walk in on a Monday ready to work,” said Amata President Bob Marks, who was CEO of insurance, reinsurance and commercial firm Walker Wilcox Matousek before coming to Amata.
Unlike other co-working or flexible workspaces like WeWork or Regus, Amata focuses solely on lawyers in Chicago’s central business district. Technology is what made the company’s seven locations possible, both in larger firms freeing up potential rental space by shrinking their law libraries and support staff space and in lawyers able to work from anywhere with Wi-Fi, but still knowing clients appreciate the amenities of a downtown location.
“You have attorneys working from airports, working from homes, working from a small office in the suburbs,” Marks said. “You’re not burning a lot of time on the train.”
It’s a niche business, he said, one made possible by the changing way the legal profession looks at space.
Formerly conjuring images of dark wood and leather-bound legal volumes oozing gravitas within a stone’s throw of the courthouse, the modern law firm space is becoming more lined with glass than wood, more centered by Ogilvie [as in train] than Daley [as in courthouse], more aimed at efficiency than ponderance.
“You could have folks who are in their 20s in that space and folks who are in their 70s in that space, so you want a space that works for everybody,” said Todd Lippman, vice chairman and member of CBRE’s law firm practice group.
Here you’ll find pullout stats from Chicago Lawyer magazine’s 2018 Office Space Survey. Sent out to the largest firms in Chicago at the beginning of the year, we polled Big Law on everything from square footage to office size to whether they provided their attorneys places to breastfeed or work out.
We also talked to experts from CBRE, JLL, Colliers, NAI Hiffman — companies that provide lawyers those office spaces — to get their takes on where law will live in 2018, 2019 and beyond.
Here’s what they said.
‘No more cuts’
When the economy tanked, big firms slashed staff sizes, cut departments and made other massive cuts to protect the bottom line.
It was both devastating and, according to Colliers International’s Daniel Arends, the easy way out.
“You could probably trace this thing all the way back to 2008, 2009, 2010. A lot of law firms took the easy fixes,” said Arends, a principal at Colliers International and chairman of the National Law Firm Services Group.
In the decade since the crisis, firms that chose to ax associates rather than modify partners’ benefit structure have been forced into the ongoing systematic changes they didn’t make then.
“Quite frankly, there are no more cuts,” Arends said. “They’ve done everything easy, the economy’s done nothing but go up for the last 10 years and they’re still not seeing the revenue growth they used to.”
Most firms Arends deals with are aiming at about 625 square feet per attorney, he said. Lippman said his firms are mostly coming from 1,000 square feet per attorney and would consider anywhere in the 600- to 700-square-foot range a win.
Contractions accounted for 44 percent of all Chicago law firm transactions from Q3 2017 to Q2 2018, according to RE Journals, a sister publication of Chicago Lawyer. Expansions were only 27.9 percent of transactions, followed by transactions that kept the same square footage (24.7 percent) and new to market (3.2 percent).
The report, citing CBRE data, said on average Chicago firms contracted 25.9 percent of their space during that time period, slightly shy of the national average of 27 percent.
After payroll, space costs are a firm’s second-largest expense, Lippman said. One way firms have looked at cutting both is by digitizing duties formerly assigned to support staff, also removing the need to house them. The ratio of attorney to support staff has shrunk drastically over the last seven to 10 years at the firms CBRE handles, he said.
“Your ratios have gone from 2-1 to 4- to 5-1 and, frankly when the associates are coming in, it’s more like 15-1,” Lippman said.
It’s an easier transition for the younger generation more accustomed to scanning their own files and plugging upcoming meetings into a calendar app, he said.
“The folks who have been around a while are more dependent on administrative assistants,” Lippman said.
Technology has helped free up office space, said JLL Senior Managing Director Bill Rogers, leader of JLL’s Law Firm Practice Group. Files are on laptops or the cloud, not in massive gray cabinets, and legal research means clicking buttons rather than dusting off leather tomes.
“I would say any firm that has a semblance of a law library it’s more decorative than anything else,” Rogers said.
Trains > courthouse
With e-filing and other online resources making courthouse runs less about shoe leather and more about clicks, law firms aren’t as bound to the Daley, Dirksen or other downtown courthouses.
That means firms have more of an incentive to move closer to transit.
“If they do [go to court] they’re not going every day, but they have to go to the trains twice a day,” Rogers said.
But that doesn’t necessarily mean the Metra trains at Union Station and Ogilvie Transportation Center. For an increasing number of attorneys, the commute means CTA.
“With a lot more attorneys living in the city, proximity to public transportation is important as well,” Lippman said.
Commuting isn’t just about convenience in an industry where income is based on the tick of the clock.
“If you’re looking at it from a billable hour perspective, if you’re getting to the office in 10 minutes instead of 30 minutes, that adds up,” Arends said.
The trainward move, whether toward the West Loop Metra trains or the River North L routes, is both symptom and cause. New construction along the river — 150 North Riverside Plaza, River Point and the currently under construction 110 North Wacker — both spur and respond to a desire for convenient commutes, a desire not limited to law.
They’re also changing expectations of space.
“Some firms have yoga rooms and workout rooms and kind of mental health, mental break type rooms in their space, and some don’t,” Rogers said.
In many cases, the landlord, not the firm, provides these spaces to all their tenants.
“These buildings are creating and providing more and more amenity spaces, like tenant lounges and more robust conferencing facilities and workout space,” Rogers said. “The amenity game is really ramped up across the market, and law firms are taking advantage of that.”
For many firms looking to reduce the square footage per attorney, it has become easier to move to a building designed for efficiency rather than rehab their existing offices. For example, Holland & Knight’s space at 150 North Riverside will be about half the size of its current location at the Citidel Center.
Other industries have jumped at chances for their employees to pick up laptops and work anywhere in the building, Rogers said. Among law firms, national firms with central control are quicker to adapt and adopt than either decentralized firms or solo shops, he said.
“They still like their offices, they’re still in their offices a lot,” Rogers said. “They bill hours, so they’re still in their offices a long time.”
In the suburbs
Any look at real estate that stops at Chicago borders isn’t telling the whole story. Lawyers being able to work anywhere means towns where the rent is cheaper and the commute shorter have increasingly become an option.
Plus, NAI Hiffman Vice President Aubrey Van Reken said, it’s nice to be wanted.
“The landlords are more motivated and there’s less competition over every individual space,” she said. “When you’re in the city and you like a space, you have to move fast and you might not get as good a deal because there’s a lot of competition — and the landlords know it.”
NAI Hiffman recently represented a lawyer who was working for a large firm on Wacker Drive, but wanted to split off to form her own Oak Brook firm. The group is currently working with a Naperville firm that wants “a more tenant-friendly landlord.”
“The law firms I’m seeing are trending away from wood paneling and dark wood,” Van Reken said. “They’re customizing their layout to be more efficient and office sizes aren’t necessarily getting bigger.”
While the general office real estate trend is to get rid of private offices, the confidential nature of much of the work lawyers do – plus the adherence to tradition that, depending on your personal opinion, either defines or plagues the profession — means law firms lag behind in this trend as well.
“For privacy purposes, a lot of companies are actually going away from private offices,” she said. “They’re having more open offices, but law firms are sticking to the more traditional.”
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