Adaptive Spaces
U.S. Law Firm Office Fit-Out Cost Guide 2023
Exploring legal sector build-out costs across 16 major U.S. markets
April 4, 2023 20 Minute Read
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Introduction
Law firms face many of the same challenges as other occupiers: managing space efficiently while also providing an appealing work environment for talent. In addition, increasing adoption of hybrid work has many law firms contemplating how their future real estate usage may evolve.
To date, the legal sector has been slow to embrace alternative workplace strategies. However, most law firms recognize the inefficiencies of maintaining legacy space designs while implementing new ways of working. Hybrid work has caused utilization rates to drop sharply and vary considerably from day to day. Under traditional assigned seating models, space is significantly underutilized. Therefore, conversations around hoteling, activity-based working and other desk-sharing strategies have risen in importance.
The increased focus on space efficiency demands a better understanding of the cost of capital investment decisions, amid supply chain shortages and higher construction costs. This report benchmarks data points—such as high-level capex estimates—and compares fit-out costs for a range of U.S. cities.
CBRE has observed a 25%-30% increase in fit-out costs since 2020 due to material and pricing escalation, along with evolving office design standards.
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Workplace trends
Flight-to-quality remains a major driver within the legal sector as occupiers look to right-size portfolios in higher-quality space. Paired with a focus on efficiency, smaller footprints in high-quality buildings can still yield net-neutral or net-positive financial results.
Currently many firms seek to incorporate design flexibility, with a focus on increasing multipurpose collaborative and community spaces and standardizing offices to a single universal size to manage growth and promotions.
Glass fronts for perimeter offices are increasingly popular, providing access to natural light and creating greater visibility for who is working on-site.
In 2022, CBRE Workplace surveys found a preference for flexible work in many law firms. While the majority of associates and partners reported a preference to spend at least 50% of their time in the office, they also placed a high value on a policy allowing for some remote working. The debate around remote work does not mean working only in a home office. Working flexibly can also mean working from a client site or any of the firm’s offices nationally or around the world, a courtroom, an airport lounge and more.
Some firms have successfully implemented open and hybrid strategies to improve collaboration and talent retention while reducing their occupancy costs.
Space trends will continue to evolve, so most firms are designing flexible layouts that include portions of their space (10%-40%) to accommodate hybrid/non-assigned teams in the future.
While many law firms adhere to traditional occupancy strategies, new workplace trends are emerging, including:
- Growing emphasis on the importance of collaboration, through the introduction of knowledge-sharing spaces and team offices in the work areas rather than only in client-facing conference centers
- Workplace experience, including both enhancing client experience and enabling ease of work for lawyers and support staff
- Increased focus on wellness and diversity programs for all employees, as a means of fostering inclusion
- Digital transformation using technology to streamline processes, enable productive and secure remote work, and support on- and off-site collaboration resulting from hybrid work
Methodology
Collaborating with our local market leaders within each region, CBRE studied 16 markets across the U.S. to determine how much law firms typically spend for space fit-outs. The following cities provide a representative spectrum of costs across the United States:
- Atlanta, GA
- Boston, MA
- Dallas, TX
- Houston, TX
- Miami/South Florida
- New York, NY
- Phoenix, AZ
- Washington, DC
- Austin, TX
- Chicago, IL
- Denver, CO
- Los Angeles, CA
- Minneapolis, MN
- Philadelphia, PA
- San Francisco, CA
- Seattle, WA
This analysis comprises a range of potential costs, with varying specification levels set for features such as lighting, ceilings, glass-fronts and furniture. This report expresses these costs in a range in order to provide better understanding of how individual law firms compare in the industry.
Test-fit comparison
These plans represent a typical practice floor for a multi-floor firm.
Traditional Design
- Two office sizes for partners and associates
- Limited conference space
- Interior workstations
Source: CBRE Design Collective 2023.
Current & Future-Forward Design
- Universal office sizes
- Focus rooms can be used as shared hoteling spaces
- Interior workstations
- Increase in conference space, especially in corner spaces
Source: CBRE Design Collective 2023.
Cost breakdown
Cost breakdown data and graphs
Breakdown chart demonstrates the spend for each city within the specified cost categories for a low-high range (construction, professional fees, FF&E, technology).
Each city demonstrates the range of total project costs for law firms. All costs are expressed in $US per rentable square foot (RSF).
Figure 1: Total Cost Breakdown in $US
Source: CBRE Research, 2023.
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