As West Michigan law firms focus on talent recruitment and greater efficiencies, they increasingly are upgrading to modern, first-generation office space.
Around the region, large firms have left or are preparing to vacate aging offices in favor of new buildings. Stakeholders hope the moves will result in spaces that better utilize technology, have better efficiency and promote their firms as welcoming to new talent.
Jeffrey Karger, a senior vice president in the Grand Rapids office of Jones Lang LaSalle IP Inc. (JLL), a commercial real estate brokerage, currently is working with four law firms searching for newer, updated space. All of them cite talent recruitment as one of their main drivers in looking for new offices, he said.
“It’s something a lot of the accounting firms did a few years ago, but now with law firms, they’re getting more efficient in their space,” Karger said. “The reason they’re going to newer space is the attraction of talent. The same firms are competing for the same talent. A nice, new shiny building helps with the recruitment of new talent.”
Although Karger declined to name the firms he’s working with, numerous West Michigan law firms have announced similar moves in recent years.
Among them is Grand Rapids-based law firm Warner Norcross + Judd LLP, which hopes to gain efficiencies and encourage greater collaboration in new office space.
By fall of next year, the firm plans to vacate its long-time offices in the Fifth Third Bank building in downtown Grand Rapids and move across the street to the Warner Building, a 15-story office tower currently being developed and built by Orion Construction Company Inc.
In doing so, WNJ will occupy four floors of the building totalling about 80,000 square feet, a reduction of about 20 percent from its current footprint, said Amanda Fielder, a partner in the firm who’s chairing the design committee ahead of the planned move.
“The practice of law has just changed,” Fielder said. “The space each attorney uses and the way that we operate as a firm is just different than how it was 40 or 50 years ago.”
National brokerage firm CBRE outlined those differences in an October 2017 report. While attorneys typically would prioritize the size of their offices with partners getting the larger footprint, they’re shifting to focusing more on location and open views. At the same time, the ratio of attorneys per secretary is expected to increase from roughly four to one today to 10 lawyers for every secretary in the coming years, according to the report.
“Legal industry trends are having a profound impact on the legal workplace. Law firms with leases expiring in the near term are reconsidering long-held assumptions about how their attorneys work and, when determining their space needs, the services and technology they need to be most effective,” according to the report.
Attorneys also are rethinking their collaborative areas to encompass smaller rooms that are more flexible and loaded with technology, CBRE researchers wrote. Many firms expect to shift increasingly to a paperless office as much as possible, further reducing the need for filing and storage space.
CBRE estimates that about 29 million square feet of law firm leases will expire between 2018 and 2022 in 26 major markets nationwide.
A MATTER OF COST
Like many other companies, law firms can attain cost savings by reconfiguring their space to create more efficiencies such as standardized office spaces.
However, the legal profession is one of the few remaining sectors that require private offices because of the need for client privacy. Those walls add significant cost to new build-outs for office space, according to JLL’s Karger, who noted that large, open spaces with standard finishes can be built for about $50 per square foot in today’s construction market. Law firm spaces with private offices tend to run more around $85 per square foot with the same finishes, he said.
Other firms are moving out of downtowns to more convenient locations for clients. That was one of the factors in Honigman Miller Schwartz and Cohn LLP moving its Kalamazoo office from the downtown central business district to a newly-built office building in Portage right off I-94 in March.
The 18,000-square-foot office in the Trade Centre complex owned by The Hinman Co. and AVB Inc. offered the firm a “blank space” to serve its national client base, as well as amenities like ample parking and proximity to two newer hotels, both of which are located within the office and commercial complex.
Phil Torrence, managing partner of Honigman’s Kalamazoo office, notes those onsite amenities and the easy accessibility to the Kalamazoo/Battle Creek International Airport come at a great value to the firm given that much of the work done in Southwest Michigan involves clients from outside the region.
“I think (the move) reflects the regional nature of our practice,” Torrence told MiBiz for a previous report. “(We will have) proximity, frankly, to the airport. We have a number of clients from out of state who from time to time visit us here in our offices in West Michigan, particularly in our Kalamazoo office. That proximity to the airport and the proximity to other clients that we have up and down the I-94 corridor — it’s just really, really efficient for us.”
As well, Miller Johnson Snell & Cummiskey PLC two years ago moved from its aging office space along Monroe Avenue on the north side of downtown Grand Rapids to the new Arena Place development in the burgeoning Arena South district.
Like other law firms, Miller Johnson moved away from corner offices to standard office sizes and more open space to cater to a variety of working environments.
“All of it is designed to make our work efficient and ultimately to add value to our clients,” Nathan Plantinga, a member of the firm, told MiBiz at the time.
Despite the number of law firms that have recently entered new space or plan to in the coming months, a JLL report from late last year expects that trend to slow down “as many of the recently executed leases by law firms have been long-term commitments.”
Nonetheless, Karger said it’s still an opportune time for firms to make a move.
“There’s plenty of space on the market,” Karger said. “I know some people say the market is tight right now, but there’s space on the market. I’m not having any problems finding locations.”