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Spiralling rents force London law firms to downsize

Rising rents in the capital have forced London’s law firms to rethink their workspaces and reduce space, according to research from CBRE.

With average rents for London’s largest 100 law firms rising 7% to £43 per sq ft last year, CBRE has found that many have been forced to reduce space or rethink their workspaces in order to offset the rise.

The global real estate advisor found that last year there were 63 relocations, 19% more than the previous year, as firms sought to take up less space and operate more efficiently.

However, in contrast to UK firms, international law firms in London have actually grown their footprint in the London. Between 2012 and 2015, UK firms lost 725,000 sq ft of floor space while international firms gained 225,000 sq ft over the same period.

Frances Warner Lacey, Senior Director, Central London Tenant Advisory Group, CBRE, said: “Property overheads are the second largest cost after salaries for law firms, so as they face up to rising competition and pressure on fees, real estate costs are one area where savings can be made.

“London continues its position as a global city, so instead of moving elsewhere, many firms have elected to make their current space work harder, while also nearshoring the use of contract lawyers and legal support centres to improve efficiencies.

“This approach has allowed law firms to maintain their fee-earner presence in the City.”

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