• Jaap Bosman

Your expensive real estate



Almost invariably business law firms have their offices in the most prestigious locations in the tier-1 cities in the country. As where the headquarters of large, listed companies are predominantly found outside of the city centers or even in more rural areas, law firms occupy prime property. After salaries, rent and occupancy are the biggest cost for any law firm.

It is not just the uber-expensive location, but there is typically also a lot of ‘unused space’.


Law firms tend to have a very large lobby, designed to impress visitors. There will be more meeting rooms than ever will be used at the same time, there will typically be an inhouse restaurant or cafeteria, and sometimes an auditorium, a bar or a rooftop terrace. Despite the very high price per square meter, there is hardly any urgency to use the space as economically as possible.


For a law firm, more perhaps than for any other type of business, their prestigious location and slick and expensive office, is closely tied to their identity. Being on a triple-A location in a fabulous office is part of who they are. It oozes a sense of prestige and success that radiated to clients and employees. The office is used as an endorsement of the brand. A law firm that has a prestigious office in the heart of the financial business district, must be better than a law firm that is in an efficient modest building on an industrial estate. That is what everyone will believe.


I even personally know of a newly started law firm of young lawyers. At first they occupied a relatively small office outside the city center. Despite their great quality they struggled to attract the big clients and the right talent. Then they decided to be bold and signed a contract for renting one of the top floors in a newly built skyscraper that is one of the tallest in the world. Although this was at the time way too big and far too expensive for this small law firm, it soon paid off tremendously. Because of their now super-prestigious location, new clients came in and talent started to apply for jobs. For this law firm, in hindsight, the location became instrumental to their success.


Work from home? Maybe not


Now that is seems that the worst of the pandemic is behind us, law firms are discussing how and when to get safely back to the office. I have written about this before. Although with the Delta variant, the outcome of this discussion keeps shifting, it looks like a majority of law firms will opt for a hybrid solution, where employees will be required to be 3 days per week in the office and are allowed to work 2 days from home. This may sound reasonable and smart to you, but to me it sounds like a bad idea. Allow me to give three arguments why hybrid working maybe is not so smart.


1. Security and confidentiality


For any law firm, confidentiality is core to its existence. That’s one of the reasons why we protect the attorney client privilege. Lawyers typically work with highly sensitive confidential information that you don’t want to end up in the wrong hands or even worse, on the street. For that reason law firm offices are set up like a fortress, almost impossible to penetrate without permission. Both physically and electronically. No visitor will ever be allowed on a ‘production floor’ or access to the lawyers’ network. When lawyers are working from home, there are no such physical or electronical barriers. There is no oversight who sees what document or overhears a telephone conversation. This is waiting for disaster to happen. You take your office and data security serious for a good reason. Don’t create multiple weak spots.


2. Training on the job and mentoring


Learning to be a good lawyer is dissimilar to learning to be a financial controller or a software developer. The latter two are mostly about mastering technical skills. Becoming a lawyer is different as transfer of experience and development of human skills are core to the profession. You become a great lawyer, only by studying the behavior of another great lawyer and copying part of that. Observing, listening and asking questions are crucial. In theory it might be possible to get a law degree by only studying remote. It is impossible to become a lawyer the same way. Proximity and person-to-person interaction are needed. If there is less of this, the quality of the lawyers will absolutely decline. Don’t forget, many lawyers are introverts by nature. Give them half a chance and they will stay comfortably at home.


3. The ecosystem


Last but not least, your fabulous office on that prestigious location. It is not just that because you have spent so much on the office, you should use it. In theory you could scale down or move to a less expensive location altogether. The office as it is, is more than just a symbol of the past. Your office creates an ecosystem, that itself is part of a larger ecosystem. This ecosystem is where talent thrives and where the constant buzz creates a sort of ‘magic’ that is converted into cash. Together in one space, one building and one business district, people will achieve more than they ever would individually behind their screens at home.


I am not aware of any business law firm, which does not use it’s location and office to attract talent. It is an attractive privilege to work in the lively and hectic business district, where you are surrounded by great restaurants and bars to meet and hang out. Where you can go out during lunch break and browse nice shops. Maintaining the ecosystem could well be core to a law firm’s success. Don’t let that slip away. Get everyone back at the office and allow for few exceptions, certainly not structurally one or two days a week. Show leadership, bite the bullet, be though. Later they will thank you for it.