Law Firms to Flock… North?

Feb 18, 2015

Written By Billy Sexton, Editor, AllAboutLaw.co.uk

Ask any aspiring lawyer about where the biggest and ‘best’ law firms are located and they’ll reply with London. It’s been the case forever; the largest firms are located in and around the City and these firms rake in millions every year. You’d think, therefore, that renting and property costs for firms is the equivalent to pennies. Wrong! In fact, 83% of firms are considering strategies to reduce property overheads.

With offices in iconic London buildings such as the Gherkin (Kirkland & Ellis) and the Walkie-Talkie (DWF), law firms have significant property overheads and is the biggest cost after salaries. Indeed, the number of space occupied by a fee earner is now 490sq ft – the equivalent of half of a singles tennis court. CMS Cameron McKenna took 30,000sq ft less when they moved offices, showing how firms are hoping to get more bang for their buck by utilising the space they have more effectively.

But what does this mean for trainee solicitors? Will they find themselves in regional offices as firms look to reduce their overheads in the capital? This is unlikely to happen, as 74% of firms view location as the most attractive aspect of their firm that attracts and retains talent (God forbid that a lawyer should be based outside of London…). In all seriousness, the importance of remaining in London is paramount to lawyers; they need to be close to their clients and often need to work around the clock – London is probably the only city in the UK close to being a 24-hour city.

However, law firms are certainly considering ‘North shoring’ non-essential services. A CBRE report found that 39% of firms are pursuing or considering this option, particularly because they expect to see an increase in their London headcount. If non-essential services move North, firms will spend less on wages and less on renting office space.

Freshfields look to be the latest firm to flock north, as they look to offices in Manchester where rent for high-end office space costs less than half the price it does in London. Berwin Leighton Paisner, Nabarro and Latham & Watkins already have, or are planning to open, an office in the city. Additionally, Herbert Smith Freehills and Baker & McKenzie have support centres in Belfast.

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