The Modern Law Office: People, Process, Place
A hierarchical culture steeped in tradition and mystique, hefty hourly fees and operating standards that generated huge file rooms of paper are on the way out. In their place, law firms are introducing standardized offices, digital files, fixed fees and greater transparency in both their procedures and environments.
At the same time, a confluence of disruptors, ranging from artificial intelligence to outsourcing, vastly lowers the cost of delivering legal services, changing the paradigm of law firm operations. Firm leadership, now often in the hands of business executives instead of managing partners, is under pressure to deliver profits in a highly competitive, greatly accelerated business environment that commands deep industry expertise. Mergers and acquisitions can help firms not only expand geographic and/or practice reach, but also secure an industry niche distinct enough to sustain a practice.
In the meantime, law firms’ top two expenses – people and real estate – keep rising. To gain efficiency, firms seek alternative ways to deliver services and cut fixed costs. Lowering the cost of occupancy presents an opportunity to not only improve the bottom line, but also to create a modern work environment for the future workforce.
To create that optimal workplace, three things must be in balance: people, process and place. Knoll conducted research and spoke to more than a dozen leaders who plan and design law firm offices to learn about challenges and planning strategies for balancing these three elements in the future workplace. The below summarizes the key takeaways from the in-depth research paper.
• People. Competition for talent is high. Law firms compete not only with each other, but also with the technology and financial services sectors for a smaller pool of talent (law school enrollment is down nearly 25 percent since 2010). The practice of law is mentoring-intensive and office environments must support the face-to-face interaction required to groom the next generation of talent.
Also, of note: Shifting forces related to legal industry talent include shifting demographics, changing support ratios, distributed work and new team members.
• Process. Despite technological advances that have eliminated labor-intensive tasks and digitized entire file rooms, the practice of law remains tradition-bound. Yet, power has shifted from lawyers to their clients, putting downward pressure on fees and forcing firms to seek greater efficiencies in their practice and real estate. One of the most significant changes in law is the shift of power from lawyers to clients. In the past, legal professionals had knowledge and skills that laymen did not understand. But in recent years, law has been demystified and legal consumers have become savvier.
Legal work is increasingly collaborative and team based (though automation has reduced the size and makeup of teams) and requires an environment with choices, including options for privacy, which is integral in the legal sector. However, not all work processes have changed. One constant in law: focus time. Attorneys spend about twice as much time as other professionals doing reading, writing and other activities that require concentration.
Labor-saving technology and software-as-a-service is increasingly employed for practice management, client intake and document management, and artificial intelligence software used for document review, saving time, boosting bottom lines and meeting client objectives for reducing expenses for lower-level work.
• Place. From the “golden era” of law up through recent years, space represented status; and office location and size were highly symbolic. Law firms remain as dominant users of top-tier office space in prime city locations, occupying two or three times as much space per employee as banking, insurance or technology firms. This approach is under increased client scrutiny.
Onward, firms are gradually adopting more progressive, efficient designs that offset the cost of renovation and higher real estate costs, and better serve a cohort with different values and work preferences than its predecessors. Public spaces in the modern law firm are decidedly less grand, luxurious and ceremonial than in the past. Instead, a clean, modern aesthetic prevails, communicating success in a subtly understated manner.
Offices are becoming smaller in size and modular in format, with space savings allocated to a greater number and variety of shared amenity spaces. Ripe for a change, public areas are re-imagined to serve multiple functions and audiences throughout the day and evening as firms focus on the experience factor for both clients and employees. Décor leans toward subtly elegant expressions of the firm’s brand and values.
Individual workspaces are being streamlined, and a noticeable change is observed with the planning metrics of legal offices. While providing officers for lawyers may still be the norm, firms realize the fast pace of business is best accommodated with flexible furniture both in the office and in support spaces to allow for agility and technology support.
By 2030, Millennials will comprise 75% of the workforce. As partners from the “golden age” of law retire, firms have a major opportunity to design and create innovative spaces for a new generation of lawyers with a new way working.
Unlike some other industries shifting to short leases, law firm leases tend to be longer because of a relatively expensive build-out. With 32% of equity partners at or approaching retirement age, lease decisions for 10 or 15 years out are not being made for current partners, but for Millennials and Generation Z. “To attract young attorneys, you have to give them spaces they want to use,” emphasizes Brad Krause, principal of Krause Interior Architecture in Phoenix. “They don’t want to go behind closed doors. They want to walk and talk, socialize, collaborate. A lot will change in the next five to 10 years.”
*A special thanks to Gillian Johnson, principal at EUA in Denver, for her thought leadership contributions in this Knoll research document.
Published in the September 2019 issue of Building Dialogue.