Study: Law firms taking a more strategic approach to real estate.
The survey results show that real estate overhead is the number one fixed expense of a law firm (6-8% of annual gross revenues), and technology costs are the number two-fixed expense (3-6% of annual gross revenues).
"Law firms are addressing their real estate with a more strategic approach that aligns with their short and long-term business goals," says Sherry Cushman, senior vice president of GB Richard Ellis Law Firm Practice Group. "Lease flexibility, including multiple expansion, contraction, and, termination options are key to lease and business flexibility. Technology has and will continue to have a significant impact on law. firm's productivity and streamlining of business and client communications."
Additional highlights from the survey include the following:
* Law firms are now adjusting their operations to. act. more as corporations rather than traditional partnerships.
* Expansion of outsourcing and utilization of single source advisors for real estate, technology and marketing, will continue to grow and be the trend for AM 100 and 200 firms.
* Profitability is at an all time high. 63% of the re-spondents experienced increased profits.
* The industry as a whole has increased its gross revenues by 40% over the past 5 years, an increase of approximately $55 billion dollars.
"Over the past year, the legal industry has continued its growth and evolution as a business entity, despite the economic downturn," said Steve Swerdlow, president, CB Richard Ellis Global Corporate Services. "It has never been more important to stay up-to-date -with the changes affecting this industry than it is today."
Other trends found in the survey included attorney and staff retention, generational issues, competition, continued mergers, acquisitions and firm growth.
Cushman formally presented the survey results at the ALA Annual Education. Conference and Exposition in San Diego, California on April 8. The key focus areas of the survey included legal business issues, mergers and acquisitions, attorney growth and retention, profitability, real estate overhead, lease securitization, space efficiency, information technology, marketing and outsourcing.
CB Richard Ellis formed the Law Firm Practice Group, consisting of professionals who specialize in representing law firms, to provide qualified solutions to the real estate issues facing today's law firms. The group's members are uniquely qualified to understand the trends evolving in the legal industry and then utilize this knowledge to meet individual clients goals and objectives in every real estate transaction.
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|Publication:||Real Estate Weekly|
|Date:||May 21, 2003|
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