law firm office spaceA recent article in the American Lawyer confirms a trend that we have long suspected was underway. In their latest real estate roundup AmLaw reports that firms are increasingly making due with smaller amounts of office space. (See the AmLaw story here.)

The report quotes no less an expert than Sherry Cushman (the managing director of one of the biggest leasing agents in NYC if not the world) who explains the trend is all about reducing the square footage per lawyer in order to drive down cost.

Historically, big law firms have been incredibly lavish in terms of space per employee compared to banks, insurance companies and most other large corporate employers. Apparently, the professional dignity that goes along with a law degree requires significant square footage in which to put itself on display.

Not that Big Law has decided to start cramming first year associates into cubicles. Instead the report mentions that law firms are still in the process of pruning secretarial and other support staff, reducing the library footprint and looking for other low hanging fruit that won’t necessarily impinge on the size of the lofty perches provided to partners and associates.

But even so, the trend to reduce space strikes us as yet one more indicator of big changes underway in the legal market – as the cost pressures continue to build, and clients continue to push for more certainty in billing. The traditional business model for a Big Law firm – paying top dollar price for fancy office space complete with art collection and other fancy perks – looks increasingly outmoded in our networked world.

Instead of committing to 6 floors with an option to take another 2 floors of contiguous space over the course of this next lease, managing partners and executive directors would be better advised to consider how they can continue reducing law firm office space over the coming decade (including inexpensive virtual office rentals). This is the direction the business world as a whole is heading in, as the network layer carries an increasingly heavy burden of business infrastructure.

The Social Law Firm, as we see it, will be ideally positioned to take advantage of these trends. A fully social law firm is one in which an enterprise social network provides a primary means of bringing people together thereby dramatically reducing the needs and benefits associated lavish office space. Without the benefit of the traditional cost plus billing model, firms that learn how to operate more virtually will obtain an incredibly crucial cost advantage.

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