U.S. law firms are just not following the recovery trend experienced by the rest of the professional services industry, and are giving up occupancy in many major markets.
A new report by real estate services firm Savills Studley points out that while the employment rate for the professional and business services sector is now 7.5 percent above its prior peak at the end of 2007, the number of law office employees has remained unchanged since 2009. As a result, law firms are either giving up excess square footage, sub-letting their offices, or moving into smaller spaces, according to the firm’s report.
Heidi Learner, chief economist with Savills Studley, says the reasons for the lackluster performance in the law services sector are threefold: A massive amount of mergers and acquisitions this year, international growth instead of domestic growth and revenue slowdown due to alternative pay methods.
“Law firms are one of the only sectors that has yet to come back from the recession,” Learner says. “Thus, appetite for legal space isn’t necessarily what it used to be...”Law Firms Cut Back on Existing Space as They Lag Professional Services in Recovery
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