Major EMEA law firms have been surveyed by global real estate advisor CBRE and the findings reveal only a limited adoption of new workspace strategies, with the UK leading the way in implementing agile working options. Manchester sits in the top three regions outside of London to offer agile workspace.
London is at the forefront in the percentage of law firms offering some form of agile workspace (60%), followed by Dublin (56%), Edinburgh (25%) and Manchester (12.5%). The only other EMEA city to offer any level of agile office space is Brussels (12.5%). Across the sample, 89% of EMEA law firms continue to operate fixed desk policies.
This latest survey follows on from previous Law in London reports, which analysed patterns in how legal firms operate within London real estate, whilst Law in EMEA offers the first ever benchmark analysis of the legal sector internationally. Whilst mixed agility arrangements (a combination of fixed and shared desks), are shown to be strongly associated with lower rents per person relative to local market rents, there is limited take up of this approach amongst legal firms outside the UK.
Across the 15 markets analysed, the average space allocated per person is 232 sq ft (21.6 sq m), however the range is significant. Law firms in Brussels record the highest space allocation per person, at 506 sq ft (47sq m) and Edinburgh the lowest, at 129 sq ft (12sq m). Manchester records 173 sq ft (16.1 sq m). As expected, there is a relationship with rent cost, with firms in some of the more expensive cities (for example, London, Dublin and Dubai) occupying space at a higher density than less expensive cities. However, there are examples where this is not the case, for instance, Paris and Moscow, two of the most expensive markets, demonstrate more generous space allocations than the overall average.
Of the law firms analysed, the average rent per person, based on current rent outgoings is €10,833 pa, ranging from €3,300 pa in Edinburgh and €5,580 pa in Manchester to more than €19,000 pa in Paris. While this is partly explainable by market rent variation across the cities analysed, this correlation is not uniform. For example, in Dublin and Dubai, law firms pay less rent per person than the market average, despite being at the more expensive end of the market rent scale, demonstrating the use of more efficient space standards to manage occupational costs.
The legal sector is strongly represented in Manchester and has been particularly active with more than 1.6M sq ft transacted over the past decade. One third of transactions have been for new or new early marketed space. Leasing activity peaked in 2014 when just over 257,000 sq ft transacted. Legal sector take-up in 2018 was just 67,350 sq ft, a sharp decline on previous years. This is partly attributable to the lack of Grade A space within the city, but there are several developments currently under construction, including 2 New Bailey Square and newly completed developments such as One St Peter’s Square which offer the large floorplates required to attract this sector occupier.
The CBRE report also examines workplace trends emerging in the legal sector in response to its growing focus on the ability to attract and retain key talent. These include:
- Democratisation of space via the break-down of traditional layouts which can promote office hierarchies and silos
- Growing emphasis on the importance of collaboration, for instance through the introduction of knowledge-sharing spaces
- The quest for innovation, as offices become more high-tech with the latest AV tools integrated
- Improved workplace experience, both in terms of client experience and in enabling ease of work for lawyers and support staff
- Experimentation with different real estate solutions, including remote hubs to offer further flexibility for commuting staff
Frances Warner Lacey, Senior Director, Central London Tenant Advisory Group, CBRE, comments:
“With the legal sector having generally favoured more traditional patterns of office occupation, it is interesting to see that some firms are beginning to move towards more open, agile environments and how this varies across the EMEA regions. Increasingly we are seeing the drive to move to more interesting dynamic workspaces is being driven by the talent agenda as well as the need to contain costs and I expect this will be the catalyst for change across the EMEA regions.”
