While the office real estate segment is starting to turn around, it still remains uncertain and bifurcated. Unless the discussion is about the legal sector. “The legal sector continues to outpace office-using industries in both leasing activity and employment growth, fueled by a 13.6% increase in U.S. lawyers since 2020 and a strong demand for premium, flexible office space,” according to Cushman & Wakefield.
The firm’s recently released “Bright Insight 2025: National Legal Sector Benchmark Survey Results” explained the following.
Legal Tenants Lead Office Leasing
Firms are signing “record amounts of long-term, high-quality leases.” Even though law firms were focused on space downsizing in the 2010s, this is no longer the case. Efforts these days are directed to talent attraction and retention.
“While average lease renewals have shrunk by less than 2% since early 2023, new leases still offer opportunities for greater space efficiencies in higher-quality buildings,” the report said.
Law Firms Emphasize In-Office Presence
With their emphasis on collaboration, 56% of law firms surveyed said they want to see on-site attorneys at least three days a week.
Said Cushman & Wakefield analysts: “Notably, attorneys spend 39% of their time working alone compared to 28% working with others in person, underscoring the need for office environments that balance interpersonal engagement with focused, individual productivity.”
The Sector Embraces Technology
The adoption of technologies like artificial intelligence is on the rise; 50% of firms say they’re using it, and one-third explain that they’ll implement it soon.
The report explained that technology spend continues to grow in the legal sector, with firms expecting to spend 4.0% of their revenue on technology. In addition to AI, other technology additions include security, knowledge management, communication and network/remote working capabilities.
Now, For the Outlook
Cushman & Wakefield analysts reported that law firms are “bullish on revenue and headcount growth in 2025.” However, while firms with over 1,000 attorneys plan to increase attorney headcount by 3.3% this year, staff growth is anticipated to be 1.8%, “reflecting a strategic focus on efficiency and AI-driven productivity,” the report commented.
Additionally, more than half of the law firms surveyed indicated they’re looking at expansion into U.S. secondary markets.
While there are no plans to abandon the major gateway markets, “secondary markets are often the most logical places to expand operations, either by adding new locations or increasing headcount in secondary markets that are slightly lower cost (for real estate and talent) but still have deep talent pools and dynamic office markets,” the report pointed out.
#Legal #Sectors #Positive #Influence #Office #Leasing