The Legal Trends Driving Change in Law Firm Workplaces & Leasing Activity
With the pandemic firmly in the rearview mirror, most law firms have established long-term workplace policies and gained greater clarity around their future occupancy needs. Still, the legal sector continues to evolve as new legal trends reshape how firms work, compete and plan for the future.
Emerging technologies, particularly artificial intelligence, are changing how legal work is performed, how firms deploy talent and how services are delivered to clients. At the same time, law firms face increasing pressure to attract and retain top talent, improve operational efficiency and remain competitive in a rapidly changing marketplace.
These shifts are making business strategy and real estate strategy more interconnected than ever. Decisions around growth, technology investment, employment in law, geographic expansion and client service are influencing how firms evaluate office footprints, workplace design and location strategies. Rather than viewing real estate solely as a cost center, leading firms are using workplace strategy to support collaboration, mentorship, productivity and long-term business goals.
Although law firms have returned to the office more than many other industries, hybrid forms of working have become the new standard. For law firms, the debate is no longer whether attorneys can work remotely; it is how the office can create value that cannot be replicated remotely. Real estate overhead remains a significant investment, typically the second fixed expense, equaling 4 to 8 percent of a firm’s annual gross revenue. The office workplace is being reimagined to support business strategies, culture, talent acquisition, technology adoption and the firm’s overall competitive stance.
After dropping sharply during the first year of the pandemic, U.S. law firm leasing activity has steadily recovered. While the total number of lease transactions remains slightly below pre-pandemic levels, the total square footage transacted surpassed pre-pandemic levels in 2024, indicating larger average lease sizes and continued confidence in the strength of the legal sector.
Employment in law has experienced moderate, steady growth over the past decade, though recent legal job postings have declined as firms balance economic uncertainty, technology adoption and evolving staffing models.
Shrinking real estate footprints indicate greater spatial efficiency, with many firms targeting approximately 500 to 650 square feet per attorney in current workplace planning.
Law firm design is shifting from traditional, office-heavy layouts toward more flexible, hospitality-oriented environments that support collaboration, mentorship, client service, focused work and employee experience.
Lease transactions over 50,000 square feet have been varied, with law firms choosing to both expand and contract, emphasizing that future space needs are nuanced and directly tied to each firm’s business strategy, talent model and technology roadmap.
As leases signed before the pandemic come up for renewal, many firms are using the opportunity to reevaluate their office space needs. Some are upgrading to higher-quality buildings, while others are modifying their existing footprints to better align with the current working habits of attorneys and staff. In many cases, firms are not simply looking for more space; they are looking for better space that supports collaboration, training, client service and employee experience.
Am Law 100 and Am Law 200 firms continue to influence the market, particularly through investments in high-quality office environments, technology infrastructure and workplace strategies that help attract and retain talent. At the same time, the scarcity of large blocks of prime Class A office space has led some larger firms to stay in place and renovate rather than relocate. Smaller and mid-sized firms are also more frequently choosing to reconfigure existing space as construction and fit-out costs remain elevated.
Legal technology trends, especially the adoption of AI, are expected to have a meaningful but gradual impact on law firm real estate decisions. AI is not expected to drive a near-term decrease in office demand across the sector. Instead, it is likely to accelerate existing workplace trends, including greater space efficiency, more flexible layouts, stronger technology infrastructure and increased emphasis on mentorship, collaboration and client engagement.
The key is to find the right balance of space efficiency, capital costs and overall workplace design that will provide flexibility in future years while reducing overall occupancy costs. Firms that align business, talent, technology and real estate strategies will be better positioned to adapt as workforce expectations, client demands and competitive pressures continue to evolve.
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Emerging technologies, particularly artificial intelligence, are changing how legal work is performed, how firms deploy talent and how services are delivered to clients. At the same time, law firms face increasing pressure to attract and retain top talent, improve operational efficiency and remain competitive in a rapidly changing marketplace.
These shifts are making business strategy and real estate strategy more interconnected than ever. Decisions around growth, technology investment, employment in law, geographic expansion and client service are influencing how firms evaluate office footprints, workplace design and location strategies. Rather than viewing real estate solely as a cost center, leading firms are using workplace strategy to support collaboration, mentorship, productivity and long-term business goals.
Although law firms have returned to the office more than many other industries, hybrid forms of working have become the new standard. For law firms, the debate is no longer whether attorneys can work remotely; it is how the office can create value that cannot be replicated remotely. Real estate overhead remains a significant investment, typically the second fixed expense, equaling 4 to 8 percent of a firm’s annual gross revenue. The office workplace is being reimagined to support business strategies, culture, talent acquisition, technology adoption and the firm’s overall competitive stance.
HIGHLIGHTS
The use of AI is becoming more common across the legal sector. Larger firms, including many Am Law 100 and Am Law 200 firms, are investing in proprietary AI platforms, governance teams and cybersecurity measures, while smaller firms are focusing on controlled adoption through trusted legal technology platforms.After dropping sharply during the first year of the pandemic, U.S. law firm leasing activity has steadily recovered. While the total number of lease transactions remains slightly below pre-pandemic levels, the total square footage transacted surpassed pre-pandemic levels in 2024, indicating larger average lease sizes and continued confidence in the strength of the legal sector.
Employment in law has experienced moderate, steady growth over the past decade, though recent legal job postings have declined as firms balance economic uncertainty, technology adoption and evolving staffing models.
Shrinking real estate footprints indicate greater spatial efficiency, with many firms targeting approximately 500 to 650 square feet per attorney in current workplace planning.
Law firm design is shifting from traditional, office-heavy layouts toward more flexible, hospitality-oriented environments that support collaboration, mentorship, client service, focused work and employee experience.
Lease transactions over 50,000 square feet have been varied, with law firms choosing to both expand and contract, emphasizing that future space needs are nuanced and directly tied to each firm’s business strategy, talent model and technology roadmap.
LAW FIRMS TAKE THE LEAD
A mix of economic, operational, talent-focused and technology-driven factors is shaping law firms’ real estate decisions. Law firms have distinguished themselves in the broader office market recovery, with leasing activity gaining traction over the past four years while many other office-using sectors have remained more stagnant.As leases signed before the pandemic come up for renewal, many firms are using the opportunity to reevaluate their office space needs. Some are upgrading to higher-quality buildings, while others are modifying their existing footprints to better align with the current working habits of attorneys and staff. In many cases, firms are not simply looking for more space; they are looking for better space that supports collaboration, training, client service and employee experience.
Am Law 100 and Am Law 200 firms continue to influence the market, particularly through investments in high-quality office environments, technology infrastructure and workplace strategies that help attract and retain talent. At the same time, the scarcity of large blocks of prime Class A office space has led some larger firms to stay in place and renovate rather than relocate. Smaller and mid-sized firms are also more frequently choosing to reconfigure existing space as construction and fit-out costs remain elevated.
Legal technology trends, especially the adoption of AI, are expected to have a meaningful but gradual impact on law firm real estate decisions. AI is not expected to drive a near-term decrease in office demand across the sector. Instead, it is likely to accelerate existing workplace trends, including greater space efficiency, more flexible layouts, stronger technology infrastructure and increased emphasis on mentorship, collaboration and client engagement.
The key is to find the right balance of space efficiency, capital costs and overall workplace design that will provide flexibility in future years while reducing overall occupancy costs. Firms that align business, talent, technology and real estate strategies will be better positioned to adapt as workforce expectations, client demands and competitive pressures continue to evolve.
DOWNLOAD THE FULL REPORT TO LEARN MORE