London’s top law firms are looking to reduce space and “radically rethink” workspace after rents rose by an average of 7% in 2015, according to research by CBRE.
Average rents for London’s 100 largest law firms rose to £43 per sq ft last year.
Many of those firms, 95 of which are located in the City, have responded to rising costs by taking less space and occupying more efficiently, according to CBRE.
Last year, there were 63 relocations, 19% more than the previous year, pushing office take-up in the legal sector to 12% above the 10-year average.
UK firms have reduced their take-up by 9% between 2012 and 2015, losing 725,000 sq ft of floorspace, bringing the average space per fee-earner down to 457 sq ft.
However, over the same period international firms increased their take-up in London by 12%, gaining 225,000 sq ft and bringing the average space per fee-earner up to 588 sq ft.
A number of law firms have continued the trend towards open-plan working, including CMS Cameron, McKenna, Ince & Co and BLM.
CBRE found that open-plan office layouts require 20% less space per head than traditional cellular structures, resulting in average rent costs of £21,800 per fee earner; £5,300 less than £27,000 for cellular spaces.
Frances Warner Lacey, senior director in CBRE’s central London tenant advisory group, said: “Property overheads are the second largest cost after salaries for law firms, so as they face up to rising competition and pressure on fees, real estate costs are one area where savings can be made.
“London continues its position as a global city, so instead of moving elsewhere, many firms have elected to make their current space work harder, while also nearshoring the use of contract lawyers and legal support centres to improve efficiencies.”
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