Law firms are D.C.’s largest private-sector office user. In total, the sector has an aggregate footprint of 16 million sq. ft., or 15% of D.C.’s total leased office space. 94 of the Am Law 100 firms have a presence in the nation’s capital.
Relocation remains a clear preference for many large law firms, as it provides the best opportunity to both rebrand and rightsize. Six of the 10 largest law firm leases since 2017 were preleases totaling 854,000 sq. ft.
The adoption of new workspace strategies has enabled law firms to redesign their space and significantly increase space utilization. Among current leases of Am Law 100 firms, those signed prior to 2011 have an average size per attorney of 1,100 sq. ft., while leases signed in 2011 or later average 830 sq. ft. per attorney, a significant reduction of 25%.
Nonetheless, rightsizing in the legal industry is not always about contraction. As smaller firms benefit from the rising demand for commodity legal services, this sector of the market is increasingly taking market share from larger firms that charge high hourly rates. Of the 43 leases 35,000 sq. ft. or less, 28 led to occupancy growth for a combined 226,279 sq. ft.
In addition to workspace efficiency pursuits, M&A activity is another source of contraction for the D.C. office market. Three recent law firm mergers have affected the market so far in 2018, resulting in a total addition of 121,494 sq. ft. of sublease space.