Getting lawyers to return to the office was never going to be a straightforward task. Two years of remote working through the pandemic caused a mindset shift that meant few, if any, saw a benefit to commuting in five days a week.
But, six months into the U.K.’s latest office return, what London’s largest law firms have been left with is an awkward mix of half-empty premises and a difficulty in enforcing the rules.
A straw poll of a range of commercial law firms in the city found the majority are averaging about 60% occupancy on peak days, with the figure lower on Mondays and dropping to less than 25% on Fridays.
While 60% might not sound particularly impressive, managing partners and estate agents said it is similar to what firms were operating at before the pandemic.
Richard Proctor, partner and head of London tenant representation at Knight Frank said: “Every firm I talk to, regardless of if they have no policy or up to four days in the office, the reality is they’re experiencing midweek culture. On those days it’s up to around 60%, but pre-pandemic it only came up to about 65%. Very rarely would everyone be in at any one time.”
“The issue firms face now is that they’re back up to pre-pandemic occupancy and require similar amounts of space as previously, but only midweek.”
This was reiterated by one managing partner of an international firm, which was tracking occupancy pre-pandemic in anticipation of a move and found Wednesday afternoons at around 2:30pm the office was only 60% full, with staff travelling, out at lunches, clients meetings, external events or unwell.
Occupancy varies among firms in London. Herbert Smith Freehills’ “policy is to be in three days a week but people aren’t doing that” according to one lawyer, who added that employees were recently shown an occupancy graph they described as “like a tent”.
Bryan Cave Leighton Paisner operates around 60% on any midweek day with Friday dropping to approximately 25%. Some Linklaters partners and their teams are in “4 or 5 days a week, not just the three expected” according to one partner.
Travers Smith has also seen a strong return, one partner “barely had any space in his office anymore” due to up to 70% of people in on any one day. The firm expects employees to be in up to 50% per fortnight, with a minimum of two days in the office each week, and in a recent firmwide survey “the large proportion (85%) of respondents feel [the policy] is having a beneficial impact on their wellbeing” and “allowing them to maintain control over work/life balance and productivity levels,” according to a spokesperson for the firm.
Weil, Gotshal & Manges wants its people in three days a week. Clifford Chance doesn’t expect its employees to be in the office more than half their working days. Skadden, Arps, Slate, Meagher & Flom expects the same but “that is not always being observed” according to one partner.
Which employees are following policy “isn’t easy to police”, noted one London partner, as the return of travel and in-person client lunches and meetings make it difficult to distinguish between someone being away from their desk and working from home.
Firms will also have to consider how attendance differs depending on lawyers’ positions. According to multiple partners, senior partners and junior associates are in 3.75 days a week on average, whilst the ‘middle band’ comprising counsel and senior associates are in less at 2.75 days.
Smaller, But Nicer Buildings
How office space is used by firms will have a direct impact on the buildings they choose to occupy, leases they agree to sign and the way offices are set up.
One law firm leader that chose new premises said: “The shortlisted offices were somewhat smaller anyway. But did we pick something smaller than we would have done because of COVID-19? Probably.”
DWF is currently on the hunt for a smaller space in both London and further afield having engaged a workspace consultancy to review its property footprint, conducted surveys and run focus groups with employees.
“We would anticipate having less space in many of our locations, but it will be better space,” according to someone with knowledge of the situation, adding the firm “no longer needs the amount of desk space it required before the pandemic”.
But not everyone is looking to downsize, “one law firm client will be taking twice as much space as a result of having to house significant lateral hiring, the range I’m seeing is from firms doubling up to most radically nearly halving” added Proctor.
Some firms won’t be moving offices until multiple years into the future, one example is Hogan Lovells which will move to a new home 15% smaller in 2026.
Those tied into a long lease and aren’t sufficiently utilising the space may think to sublet office space, like Taylor Wessing has done.
This is because premises can be a large expense for firms, Baker McKenzie’s next lease comes at a cost of £10.5 million per year.
However Proctor is not seeing firms pinching pennies when it comes to space. Instead he’s seeing firms “trading up”, for offices with better amenities, outdoor area and sustainability credentials, rather than cutting square footage to manage down costs. The buildings are being used as a strategic device.
“When you’ve got five or six times the cost of people vs cost of property, firms must use their base to shift the needle of attrition rates and billable hours in a positive direction – that will generate bigger performance”, he commented.
For some firms this has certainly been the case historically. One person said DLA Piper’s utilisation rate went up a significantly after it moved London office over three years ago, while Weil Gotshal & Manges back in 2011 completed its three-year recruitment plan in the first nine months post-move.