On Friday I posted a note regarding Orrick’s move to a central back office in W. Va. and the possibility of offshore outsourcing of back office functions. This caused me consider a related question: does it make sense for large law firms to rent a single, high cost office in each city?
I am shaped by my experiences in NYC, Washington (DC), and Boston, where downtown rents are very high and where many lawyers live in suburbs from which the commute time to downtown is quite long. Would it make sense in these and other cities for firms to rent less downtown space and, instead, open a couple of suburban locations? I have talked to partners at some firms about this and the idea has been poorly received. But it might be worth considering.
Here are some factors to consider in thinking about this:
1. The rental cost per square foot in suburbs is significantly less than downtown.
2. Many lawyers have reasonably long and only partially productive commutes. Shorter commutes might result in more billable hours and/or more personal time.
3. Running a separate office entails extra overhead. Is that extra overhead more or less than the rental cost savings?
4. How important is it that all lawyers in a single city actually work in the same building?
The first three items go to quantifiable economics. It would be interesting to learn if any firm has done the analysis.
The fourth item is perhaps the most difficult one to address. Clearly, being able to meet in person has tremendous value. And clearly, downtown meeting space is required to serve client needs. But modern technology allows working effectively from remote locations. And as more and more large firms attempt to become truly national, it means lawyers from multiple offices should be working together. If lawyers across cities, states, and countries can work together effectively, then surely lawyers located in the same metro area can.
Lawyers in suburban offices would undoubtedly have to go downtown (or vice versa) for meetings. And this would add to overhead in the form of offices for visiting lawyers.
As technology improves – especially tools for online collaboration and video conferencing – it will be interesting to see if the economics and culture of law firms support multiple offices in a single metro area.
If anyone has thought this question through more rigorously, I would be interested to hear about the analysis.