Snapshots

Law firm leasing is exceeding pre-pandemic levels

April 29, 2024

Contributors:

Positive leasing momentum in recent quarters has driven gross U.S. office leasing activity to 75% of pre-pandemic levels over the past 12 months, but some segments of the market have been more active—legal services firms have been one of the earliest major industries to exceed pre-pandemic levels, with their leasing volume over the past 12 months exceeding 2018-2019 levels by 8%.

Law firms’ share of U.S. office activity is growing as a result of their faster recovery: despite generating just 8.7% of gross leasing activity from 2010-2019, legal firms have comprised 12.2% of leasing over the past five quarters, surpassing the technology sector, which led all industries in office leasing from 2010-2022.

Many law firms are not just transacting but have been expanding footprints to accommodate stricter-than-typical office attendance policies: Sidley Austin signed one of the largest legal leases of the quarter in Dallas, leasing 118,000 s.f. in Granite Properties’ 23Springs, which will deliver in 2025—an expansion of nearly 50% from their current office lease in Dallas, an 80,000-s.f. space at McKinney & Olive.

In addition to being a bright spot from an activity level, legal firms have been less hesitant to make long-term commitments than other sectors: The average legal lease over 10,000 s.f. was executed with an 9.6-year term, and more than 50% of legal lease volume was in 10-year leases or longer.

Sublease inventory continues to stabilize

Sublease inventory stabilizing

Conversions are helping offset the rise in vacancy

Conversions are mitigating the rise in vacancy

Office demand continues steady path of recovery

Office requirements trending upwards for four consecutive quarters