According to commercial brokerage firm Savills Inc, two prominent U.S. law firms have downsized their headquarters in major cities, making them the largest law firm leases signed in the first quarter of 2023. The first firm, Cadwalader, Wickersham & Taft, reduced its office space in New York by approximately 34.7% or 120,000 square feet when renewing its lease during Q1 2023. Savills reported that Cadwalader leased 225,000 square feet in its lower Manhattan building. Despite requests for comment, a spokesperson from Cadwalader did not respond.
According to a recent report by Savills, which tracks law firm leases in major U.S. markets, in we have witnessed a boost in leasing volume in the first quarter of the year, reaching 1.6 million square feet, thanks to the signing of four significant leases exceeding 100,000 square feet. This represents a 45.5% increase compared to the previous quarter of 2022, which experienced a decline. Savills noted that leasing activity during Q1 returned to more typical levels.
Like Cadwalader, another law firm, Katten Muchin Rosenman, she opted to retain its headquarters in the same building when it renewed its lease last quarter. According to Savills, the Chicago-based firm secured 204,000 square feet, representing a reduction of just over 7%.
According to Gil Soffer, the managing partner of Katten's Chicago office, the decision to reduce office size was influenced by several factors, including location, lease flexibility, amenities, and design considerations. He stated that given the new world, we are in, there was a strong belief within the firm that they simply required less space.
A recent report from commercial brokerage firm Cushman & Wakefield revealed that law firm tenants who renewed or relocated within the same market downsized their office spaces by an average of 13%. Additionally, over 20% of firms renewed their leases at the same size in 2022. The report highlighted that larger firms have proactively implemented space reduction strategies.
Cushman & Wakefield, which monitors leases across all sizes, reported that the leasing activity in the U.S. legal sector peaked at 14.3 million square feet in 2022 following the pandemic-induced slowdown.
