‘The EU referendum had a dampening effect; there were a number of law firms that put relocation plans on hold. We are in a landlord-driven market, where lease terms of 15-20 years are required on new developments – that is a long-term commitment to make in an uncertain economic environment,' explained CBRE's senior director Frances Warner Lacey.  Commercial property company CBRE which compiled the report found that other factors such as flexible working - which is set for a dramatic uptick - played a crucial role in the downsizing of legal offices. The report discovered that 30 per cent of the firms surveyed had an agile working policy, while another 40 per cent were looking at instituting one in the next 12 months. New technology is also pushing law firms to rethink their real estate footprint, according to the study.

100 law firms canvassed

After canvassing the largest 100 law firms in London, it was discovered that the total space taken through new London law firm leases in 2016 was 499,900 square feet – 55 per cent down on 2015 and 36 per cent below the 10-year average. The report also revealed that no law firms signed deals committing them to more than 100,000 square feet in 2016, in contrast to 2015 when both Ashurst and DLA Piper agreed significant pre-lets. The largest deal of 2016 was CMS’s leasing of 84,199 square foot at Cannon Place ahead of its merger with Nabarro and Olswang.

Less space needed

Even where firms are signing leasing deals, the amount of space they are taking is falling. Global Legal Post recently reported how Freshfields Bruckhaus Deringer was moving from its almost 400,000 square foot offices in Fleet Street to one of 255,000 square feet at 11 Bishopsgate.