Another U.S. law firm shrinks office space as hybrid work becomes the norm

(Reuters) – As U.S. law firms continue to navigate the pandemic-era shift to remote and hybrid work, Davis Wright Tremaine has moved to a new space in San Francisco that cuts its footprint in the city by 40%, the firm said on Thursday.

Davis Wright said the new office will accommodate both technology-enabled hybrid work and future hires. The Seattle-founded, 600-lawyer firm has more than 50 attorneys in San Francisco, after adding 11 lawyers there over the past two years, it said.

The firm moved from nearly 34,000 square feet of office space to just under 20,000, according to a spokesperson.

The new location, which opened Monday, has a mix of dedicated single-size offices and hoteling space, which leaves the firm room to expand, said Jeff Bosley, partner-in-charge of the office.

“If there was any positive of going through design and build-out in this period of time, it’s that we were able to really make choices that allow maximum flexibility for lawyers,” he said.

The move to one-size offices is new for the firm in San Francisco, but its offices in Seattle, New York and elsewhere have already made the switch, Bosley said.

Office leases are a top expense for law firms, which are also grappling now with higher expenses after widespread associate raises last year. Bosley said that while there were savings associated with Davis Wright’s relocation, cost was only one factor.

Major law firms have been reducing the number of square feet per lawyer for years, including by adopting uniform office sizes. The trend has accelerated since the pandemic led many of the largest U.S. firms to embrace a long-term mix of in-person and remote work.

Other big law firms are also trimming their footprints in major markets, even as the pandemic fades and more lawyers are back to working full or part-time in the office.

Shearman & Sterling recently finished a redesign of its Manhattan headquarters that saw the firm shrink its office footprint by more than 184,000 square feet, according to a statement from Arsha Cazazian-Clement, the firm’s director of global real estate.

The remodel, chosen before the pandemic, reduces its carbon footprint and aids its environmental, social and governance goals, the New York firm said in an announcement last week.

Philadelphia-based Duane Morris plans to reduce its office footprint by 20% in the next five years, a firm spokesperson confirmed Thursday.

Not all law firms are looking to reduce their office space, though. Freshfields Bruckhaus Deringer said in August that it signed a lease for a larger office to accommodate growth in New York. Barnes & Thornburg last year inked a lease to triple the size of its New York space.

For both larger and smaller space, law firms have been choosing this year to relocate offices at levels not seen since before the pandemic, according to brokers at Savills Inc. Those decisions come as firm leaders have more confidence in making long-term commitments, and amid softer market conditions that favor tenants, Savills leaders have said. During the earlier days of the pandemic, more firms opted to stay in place.

Law firm office leasing activity has stabilized this year after a pandemic-era dropoff, recent data from Savills showed.

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