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Dallas Law Firms Seek High Quality Space to Attract and Retain Talent

Now more than ever, law firms are taking a thoughtful approach to their real estate decisions, using their physical space as a tool to bring both lawyers and staff back to the office, attract and retain talent, and create an environment that enhances overall collaboration, training, and energy.

For the last nine years, Cushman & Wakefield’s Legal Sector Advisory Group (LSAG) has conducted the Bright Insight report in partnership with ALM/American Lawyer. The report covers many aspects of law firm benchmarks and trends including real estate, strategy, business, talent, operations, technology, and the incredible impact that the pandemic has had on the legal sector and real estate decision making. 

According to this year’s survey results, 76% of firms anticipate making either dramatic or incremental changes to their workplace moving forward in addition to the changes they’ve already made to date. Across the legal sector, the workplace is quickly evolving to increase agility and workplace flexibility.  

In Dallas, law firms are certainly following the national shifts outlined in the Bright Insights report, however Texas law firms are traditionally slower to adopt these trends. This is crucial knowledge for firms seeking to relocate from other major markets or open additional offices in Texas. 

For example, nationally firms continue to downsize and right-size their real estate square footage with new target ratios of under 600 square feet (or less) for many law firms moving forward. In fact, 65% of firms indicated their target ratio in the next five years will be 600 sf or less. However, Dallas’ ratio is closer to one per 700 sf with spaces that have been designed in just the last 36 months. Lease sizes though are smaller on average, and as legacy law firms approach lease expiration, we expect they will take reduced square footages based on efficiency. 

Nationally, overall occupancy in 2021 on a square foot basis by law firms decreased 14% on average for new leases, and 6% on renewals in all U.S. cities. Relocations also increased because of attractive landlord concessions (tenant improvements and free rent), which peaked at an increase of 54% over 2020.  

Dallas continues to experience flight to quality, whereby firms create a more efficient space design, reduce occupancy costs and relocate to trophy buildings (new or under construction) in the most attractive areas including Uptown, the Ross Avenue corridor in the CBD, and the Arts District. Additionally, some submarkets are gaining traction to land satellite offices such as Preston Center and Legacy.  

With slowdown in speculative office development there is going to be a lag in new law firm spaces delivering whereas pre-pandemic there were speculative developments happening in Uptown and Downtown that were anchored by law firms. With construction cost and timelines, law firms are placing more of a focus on existing or under construction buildings.  

Recruitment and retention remains the number one focus for Dallas law firms. The war for talent for both attorneys and staff has never been fiercer on both a national and local level. Law firms, especially large firms, are increasingly recruiting and attracting attorneys from competitors, enticing them with increased compensation, flexibility to enhance work-life balance, and opportunities with larger platforms and promotions. AM100 firms continue seeing Dallas as tremendous expansion market, which is amplifying attorney recruitment efforts and retention challenges. 

To read more about these and other trends impacting law firms, check out our Bright Insight report

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Legal Sector Advisory Group
Cushman & Wakefield’s global Legal Sector Advisory Group (“LSAG”) consists of more than 450 global advisors that specialize in strategizing, creating, and implementing real estate solutions that support the business and people of today’s legal sector.
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