Knight Frank’s UK Regional Cities Legal Sector report has identified Cardiff, Leeds and Manchester as the UK regional cities which saw the largest percentage of office take-up from the legal sector in 2016 (Cardiff 19.2%, Leeds 18.8%, Manchester 16.3%). Other key findings include:
- New market entrants, technology and shifting client demands are just three of the disruptive factors which will contribute towards changes in the legal sector, the location of their offices and the space they wish to occupy.
- Mid-tier firms will struggle to compete on fees and as such be forced to further consolidate and merge to improve their market position. This consolidation has already been seen in the regional markets. In 2016, 69% of UK M&A deals involved a regional law firm. In Cardiff, Hugh James Solicitors acquired MLM Cartwright solicitors and consolidated into one office at 2 Central Square
- Law firms are continuously deploying off-shoring/near-shoring strategies to optimise efficiencies and reduce cost. Recently, firms have extended the scope of existing centres and looked to UK cities in which high quality talent can be obtained at a lower cost. In Manchester, Freshfields Bruckhaus Deringer took 81,300 sq ft of space at One New Bailey – the city was chosen due to its skilled labour pool
- The role an office plays in attracting the best people has increased importance and as such firms will seek out quality office space in CBD locations. The next five years will bring radical change in the organisational structure of law firms and a different talent requirement. In Birmingham, Print Masons secured 40,500 sq ft at 55 Colmore Row – One of the city’s most prestigious addresses and at the core of its professional quarter.
- The regional markets will continue to represent a significant ‘cog’ in the wider operations of law firms, as well as being markets that provide the external support services on which law firms rely.
Lee Elliott, Head of Commercial Research commented: “Law firms have been an integral part of the development and, in some instances, re-birth of regional office markets across the UK. Despite multiple pressures on the operating model of legal services firms, we firmly believe the sector will continue to be strongly represented across the UK regional markets.”
