Do We Really Need An Office?
April 2008
It's April. The season is changing. A stroll down LaSalle finds 20,000 people in trench coats with that same squinty-eyed, almost constipated look as the winds blow sleet and hailstones in our faces. Thousands of lawyers commute every day into the city. Probably adds on average two-plus hours per day to the job.
We trade stories of the hours it took to get home, the delays on trains, the snow problems, de-icing the car.
Then it happens. You're in your own neighborhood, chatting about the weather and the brutal commutes, and some guy says, "Oh, I work five minutes from home," or "I work out of my house." He is filled with glee. I don't personally care to hear this after cleaning chunks of salt off my shoes, and can think of no other response than, "Well, they say most terrible accidents occur within a mile of the home." Then I leave.
Other than because we are the most important people in the universe, lawyers, like any profession, should ask, "Why do we go to an office?" (To get the hell out of the house is not an answer.)
The question almost sounds philosophical, but it isn't that deep. Or boring. At one time, the answer was clear.
The office is where the files are, clients are met, meetings held, documents reviewed, and from where we most conveniently access court.
Times have changed. Most documents, pleadings, contracts are stored and sent electronically. Many court documents are filed electronically without the need for an actual signature. Research is done electronically and decreasingly in law firm libraries. Video-conferencing, e-mail, and BlackBerries have enhanced client communication. Simply put, technology has made it possible for the lawyer to be as or more efficient out of an office setting.
But most firms are paying for office space today just as they have for years. Firms need offices for clients, court, storage of the files, documents, and many other very legitimate functions, such as free pens, personal copies, and long-distance calls.
The traditional thought is that if the offices are filled with billing attorneys covering the costs, then let's get a lot of space and fill it up. Two questions: What if you don't fill that space? And/or, What if you don't need that space?
As to the first, US Equities COO Nancy Pacher was quoted as saying, "It is not rental costs per se that can strangle a law firm user; it is rent on empty space, where attorneys could be billing fees, that can turn an otherwise profitable firm into a non-profitable one." (Law Practice Today, January 2005)
An empty office is costly because you have no one generating revenue to cover the expense.
Occupied, that "space" should turn a profit for a firm, be it large or small. It would follow, then, that profits rise if you have more than one attorney billing one office.
That doesn't mean two people at one time, which makes no sense. It goes to the broader question of the necessity of an "office" in an electronic age.
The legal industry appears to be on completely divergent paths. Can you imagine that, lawyers disagreeing?
Some would answer "no" to the question of whether you need any offices. There are relatively new companies like Axiom Legal that provide on-site legal services to clients and eliminate office space and all the financial burdens that come with it.
Their theme is replacing "mahogany with technology" by working out of "12 x 15-inch offices" a networked laptop. The company was founded on the premise that there was a more efficient way to deliver legal services. (www.axiomlegal.com)
On the other hand, look at what's happening in Chicago.
A 46-story tower being scheduled to open at 155 N. Wacker in 2009 claims the law firm of Skadden Arps as an anchor tenant, taking more than 200,000 square feet. (www.chicagorealestatedaily.com)
Kirkland & Ellis has signed on for 600,000 square feet in the new 60-story, 775-foot building at 300 N. LaSalle. (Hines Interests LP, www.hines.com)
Jenner & Block and Mesirow Financial will be co-anchors and lease over 700,000 square feet in a new 47-story tower at 351 N. Clark St., scheduled to open next year. (www.mesirowfinancial.com)
Is there a right answer? No.
First and foremost, lawyers are responsible for "maintaining public confidence in the system of justice by acting competently and with loyalty to the best interests of their clients; [and] by working to improve that system to meet the challenges of a rapidly changing society." Illinois Rules of Professional Conduct - Preamble.
The obligation is to the client first, and it is up to each lawyer and firm to decide how that is best accomplished.
The legal industry is often accused of being conservative and slow to change. Hard to say whether we will be behind the curve on this one, but the subject warrants thought in long-term lease planning.
I've gotta go catch my train now. dheilmann@clausen.com
