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Inside the legal sector’s massive change management exercise
The days of lawyers having their names on the door of an office are gone. And they might not even have their name on a desk, as the way firms work undergoes a significant evolution, writes Tristan Gannan.
Tristan Gannan
It’s been nearly 15 years since activity-based working (ABW) arrived in Australia, and most professional services firms have been in open-plan working for a long time, including ABW for the best part of a decade.
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The legal sector, though, has been more traditional but is now catching up in the wake of the COVID-19 workplace shake-up.
While individual offices and assigned seating have traditionally dominated law firm floorplates, that approach is changing.
In CBRE’s recent survey of more than a dozen global firms practising in Australia, 43 per cent indicated their current set-up was built around assigned open-plan seating, while a further 14 per cent had no open-plan component at all.
But there’s a shift towards open-plan environments, which represents a massive change management exercise to drag many lawyers over the line on unallocated seating.
The ownership over a space is going, and while offices will remain, there’ll be fewer of them and they won’t be assigned.
They’re being replaced by unassigned desks and offices, and autonomy for employees to choose where they work based on their output.
The default position will be an unallocated open-plan environment, with employees able to access bookable spaces and offices for a thought-based working environment.
Firm partners are becoming increasingly comfortable working in open-plan environments. Initially, firms had offices along the windows and open-plan in the middle with no natural light.
The next iteration was flipping that, and if you had an office, you had no natural light, which brought a lot of partners out of their offices into open-plan arrangements.
Another takeaway from the survey is that 64 per cent of firms said they felt pressure to reduce their real estate costs.
Law firms typically allocate about 5.2 per cent of their revenue to real estate, against the 3.5 per cent average for professional services.
The legal sector’s focus on client and staff experience means there’ll always be some disparity there, with more elaborate, high-end and bigger front-of-house areas to welcome and entertain clients.
But there is room — and incentive — for firms to bridge that gap. Depending on the size of the firm, a 1 per cent reduction could be worth $1 million to $2 million in rental costs each year.
Of our survey respondents, 29 per cent indicated they were likely to reduce their footprint, with another 50 per cent expecting to remain the same and only 7 per cent looking to expand, despite rising headcounts across the industry.
Whatever firms do, the move to more progressive models — working their offices harder — will mean they can accommodate more people, reduce their real estate spend per person and keep costs stable as they grow.
That won’t necessarily happen by making the space denser; it’ll be through changing their workplace configuration and changing people’s work behaviours.
Tristan Gannan is the director of office occupier, NSW, at CBRE.
