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5 July 2004
Rents and floor space are probably not at the forefront of your mind when you enter the legal profession. The likelihood is that you are probably more interested to find out if the office has a bar and the size of the gym. But property is one of a law firms biggest expenses and getting a good deal can make a crucial difference to your law firms bottom line. As a result, there is more money to get into the profit pool at the end of the year and hopefully a little bit extra for the staff Christmas party.
Currently there are a host of law firms in the London market looking to make a move. This is largely thanks to a downturn in the market, which has seen tenants getting some great deals. For example, space in the City is averaging around 47.50 per square foot, compared with a whopping
65-70 in 2000-01. For a firm the size of Norton Rose, which is currently looking for around 300,000sq ft, that is a difference of around 7m annually.
As a result, a lot of firms have been looking to exercise break clauses (which let you out of your contract at a given date) and make the most of the current deals.
But rent is just one factor in getting a good deal. Other considerations include rent-free periods, cash contributions, rates and service charges payable, varying lease terms and different specifications. At the moment, landlords have been enticing clients by providing longer rent-free periods or free fitouts and the like.
When looking for new premises, a firm will enlist the help of a surveyor the bigger firms will have specialists that find space for law firms. And like anyone else buying property, they will also employ an external law firm to negotiate the deal so as to avoid any conflict of interest.
|1 Norton Rose||Norton Rose is one of the biggest players on the market at the moment. Based in a number of buildings around Liverpool Street, the firm is looking for 300,000-350,000sq ft.|
|2 SJ Berwin||A deal looks imminent for SJ Berwin, which is currently based in two buildings on Grays Inn Road. A key contender for the new premises is Thames Court at 10 Queen Street Place.|
|3 Lawrence Graham||Currently based at 190 The Strand with a little under 100,000sq ft, Lawrence Graham does not have to be out of its current premises until 2007, but has been actively looking for some time for just over 100,000sq ft with the option to take up to 150,000sq ft over the next 10 years.|
|4 Macfarlanes||Early days for Macfarlanes. The firm has to be out of its current premises by 2009 and is keeping an eye on the market for a good deal on around 100,000sq ft.|
|5 White & Case||White & Case is currently based at 7-11 Moorgate, but has negotiated to take 100,000sq ft at Lion Plaza. Delays had threatened the deal, with the firm in recent months considering other options. But unless further delays occur, the deal now looks set to move forward, after the main leases were signed on 30 November.|
|6 Sidley Austin Brown & Wood||Currently housed in two buildings on Threadneedle and Princes Street. However, the firm has signed for 78,000sq ft. The Threadneedle and Princes Street premises are now on the market.|
|7 Dechert||Currently housed in 2 Sergeants Inn, the firm has been looking for around 60,000sq ft. Dechert has the ability to leave its current premises on a one-year break notice.|
|8 Orrick Herrington & Sutcliffe||Orricks is based at Tower 42. It is actively seeking around 25,000sq ft and is believed to have looked at Canary Wharf.|
|9 Latham & Watkins||The firm is seeking 65,000-80,000sq ft. It is thought be looking at extra space in its current premises at 99 Bishopsgate and 1 London Wall.|
|10 Dewey Ballantine||Dewey has around 18,000sq ft in the Aviva Tower. However, it is close to signing up for 31,000sq ft at 1 London Wall.|
|11 OMelveny & Myers||OMelveny currently has around 4,000sq ft at 3 Finsbury Square, but is looking for a new space of around 12,000sq ft.|
|12 Pinsents||Pinsents is believed to be poised to activate a new search for up to 60,000sq ft prior to its 2006 break option.|
There are still significant options available for law firms at Canary Wharf.
US firm Kilpatrick Stockton looks set to become the fourth law firm to sign a deal in Canary Wharf, taking over space previously occupied by Skadden Arps Slate Meagher & Flom.
Although rents can reach as high as 42 per square foot in the area, the average tends to be slightly less than City rents, but still above average rents in Midtown.
Buildings suitable for law firms in the area include 40 Bank Street, 25 Canada Square, 50 Bank Street, as well as space in Clifford Chances building at 10 Upper Bank Street.