Law firms are utilizing less than half of their real estate. Kastle Systems reports that as of March 2023, the overall office occupancy rate is 48%, with the occupancy rate for law firms varying around that, ranging between 26% to 50% of their space for most firms. See, Colliers 2023 Law Firm Office Markets North America Report. With the average law firm spending 10.5% of gross annual revenue on real estate (see, Cushman & Wakefield 2023 Bright Insights), this overhead expense is significant — and not utilizing half or more of it is of enormous concern.
Here’s a quick, reductive calculation — given the average full-service Class A asking rent across 21 markets is $40.17 per square foot (See, Colliers, supra) and that law firms occupy approximately 120 million square feet of real estate in total, we’re talking about a very large number: $24 trillion dollars in unused real estate per year. It really should come as no surprise that 65% of law firms are expected to reduce their space needs, both when renewing in place or relocating. Ibid.
