Denver Law Firms Adopting More Efficient Space Strategies
DENVER – Law firms in Denver are shedding surplus space, increasing efficiency and migrating across downtown, according to CBRE’s 2018 North American Legal Sector Trends Report.
Denver recorded 283,848 square feet of law firm space transactions from Q3 2017 through Q2 2018. Of these transactions, 47.2 percent were contractions, 28.6 percent were expansions, 20.2 percent were stable and 4 percent were new-to-market. Of the firms who contracted, on average they reduced their footprint by 21.8 percent.
CBRE found increasing space efficiency a common trend among Denver firms. One-size offices have been broadly adopted in the market with 12 (28 percent) of the top 40 Denver law firms (measured by square footage) having implemented or in the process of implementing one-size offices. Ten of these new build-outs occurred starting in 2015, making it a fairly new phenomenon that is anticipated to continue.
In Denver’s Central Business District, law firms continue to migrate from Uptown and Mid-CBD with three major firms making this move from 2017-2018. Eighteen (45 percent) of the top 40 Denver firms are now located in LoDo or the adjacent Skyline Urban Renewal District.
In terms of employment, Denver’s legal services employment is slightly decreasing. The market saw a 1.2 percent decline in overall legal services employment and a 3.1 percent decline in lawyers specifically from 2015 to 2017. This aligns with the national trend of fewer millennials graduating with law degrees in recent years.
“Both nationally and in Denver, law firms are facing a couple of headwinds. While profits are being squeezed, expenses are going up as rents rise and firms increase their compensation to attract and retain top talent. This is causing law firms to reevaluate their approach to real estate, considering how they can design their space to adapt to changes in technology, to changes in the generational composition of their attorneys, to win the war for talent, to respond to competitive forces and to maximize operational efficiencies. The result of all this is more modern and efficient design with law firms reducing space per lawyer by about 20 percent on average,” said Greg Holm, senior vice president, CBRE National Trends.
Photo courtesy of Polsinelli