Agile working report: The co-working craze

There is an increasing amount of discussion about agile working in the legal market recently with signs that there has also been some tangible change.

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While most firms are only starting on the journey to agile working – just letting your staff work from home one day a week does not make a firm agile – others (notably CMS) are creating a truly mobile working environment inside the office as well as outside. The past few weeks alone have seen a number of firms including Olswang, Mayer Brown and Dentons confirm they are launching agile working initiatives while Clifford Chance, Linklaters and Herbert Smith Freehills all revealed that they had made agile working available to partners last year.

Now a new trend is emerging that could be seen as the next logical step for firms looking for an agile, mobile and 21st-century workforce. Co-working, where disparate businesses and organisations share the same collaborative and open working space, is already big news in sectors outside legal.

The idea was originally led by start-ups, entrepreneurs and freelance workers who were attracted by the opportunity to rent a single desk or group of desks in a shared space. It is the ultimate in a non-corporate, collaborative work space.

Now, according to real estate consultancy JLL, which has just produced a report into co-working, a new ecosystem is emerging that encourages innovation, accesses disruptive energy and offers larger corporates – and major law firms – a direct link to the “sharing economy”.

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Pushing the boundaries

In particular this type of shared space is potentially appealing to the younger generation, the millennials. For lawyers active in the knowledge-based industries in particular, co-working offers them the opportunity to mingle with potential future clients. In short this is a new phenomenon for the legal market, which is not just an issue firms are facing but also one that has the potential to offer tangible and practical benefits.

Indeed, another benefit of co-working is that if it takes hold and firms needs to scale up quickly, it is likely that firms will go into such a space.

According to Harvard Business Review, by 2025 around 40 per cent of US work space will be contracted with staff working in a project-based environment. This context, which is pushing the boundaries of all businesses’ future real estate needs, also potentially signals the way forward for major law firms.

In short, the trend that was pioneered by start-ups is now increasingly being embraced by a growing number of businesses, large and small.

Collaborative environments

Dentons is one of the firms at the front end of this trend. In New York the firm’s lawyers are already co-working with specialist provider WeWork, putting them potentially in at the front of the queue in terms of acting for the next unicorn (a $1bn-plus privately owned business, generally a former tech start-up).

Last year WeWork opened the UK’s largest shared space in London with the capacity to house 3,000 members. Similar solutions are already being opened in other cities around the globe.

In Amsterdam, for example, companies such as Philips and IBM are utilising co-working space to encourage innovation alongside start-ups. Co-working business NUMA, which opened France’s first co-working space in 2008 and an entrepreneurial hub in 2011, is now working with 30 large companies and helping to accelerate a number of start-ups.

As JLL says in its report, titled ‘A new era of co-working’, the trend is centred on creating space “which supports collaboration, openness, knowledge sharing, innovation, and the user experience”.

Demand for co-working space has been driven by the growth of creative and tech industries as well as the changing nature of work, adds JLL. Mobile technologies and personal devices have made working remotely from a variety of locations much easier.

While this has fuelled the growth in home working, companies and their employees increasingly see the value of being part of a collaborative environment, something which is at the core of co-working.

The results of the latest Global Co-working Survey reveal that 61 per cent of co-working space providers are planning to expand their operations and almost 80 per cent expect the number of members to increase in 2016.

“With a growing number of companies looking to tap into these benefits, it is only a matter of time before co-working becomes an integral part of the corporate real estate toolkit,” says JLL.

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The four co-working models

Four core models of co-working that are now emerging can be applied to organisations looking to exploit its benefits.

An internal innovation hub is typically created exclusively for employees within a company’s own office, providing flexible, creative space to suit a variety of work settings.

Internal co-working spaces are set up by organisations seeking to improve collaboration and knowledge sharing, encourage innovative thinking and inspire a cultural shift.

This model also enables companies to signal to the new generation of employees that they are open to more flexible forms of working.

Another option for companies seeking flexibility and ease of implementation is to purchase memberships in external co-working spaces. This allows companies to offer a variety of locations to their employees and accommodate any temporary increases in workforce.

External memberships also provide a range of work settings and help companies to tap into new networks and keep a pulse on market developments without any costly modifications to their existing real estate and potential disruption to the wider company culture.

Another option for organisations that wish to experiment with collaborative space is to work alongside a specialist provider to create a dedicated or ring-fenced external co-working area.

This model results in minimal disruption to the existing space and allows companies to test co-working with specific areas of the business before introducing more widespread change. It provides all the benefits of internal and external innovation and is associated with a lower risk of disruption.

In the fourth model companies create internal co-working space open to entrepreneurs and start-ups, often for free. Start-ups are usually selected via an application or interview process, but in return are provided with mentoring services. Building relationships in this way can help mature companies secure access to break-through technology or ideas at an early stage, while maintaining control over the space.

Barriers to co-working

Perhaps the greatest barrier to co-working is related to security.

For companies dealing with high volumes of confidential data, sharing space with external organisations or easing the rules for using personal devices can be potentially challenging.

Cyber security is a growing strategic challenge for organisations; effective co-working solutions need to help mitigate cyber security concerns.

Premises security can be another potential challenge. While co-working spaces are perhaps safer environments to leave equipment unattended than your typical coffee shop, companies still risk a loss of equipment.

Effective policy frameworks and procedures can help mitigate risks, while solutions such as internal collaboration space or innovation hubs substantially reduce external risks.

Privacy is another frequently cited barrier to co-working. Many companies fear a loss of intellectual property, ideas or other sensitive information. This concern can be amplified further by  the prospect of potentially sharing space with competitors.

Some element of private space or procedures around sensitive information sharing can help with risk mitigation. However, inevitably organisations will need to adapt existing processes to manage potential privacy risks associated with opening up their organisation to external co-working environments.

“Privacy is a frequently cited barrier to co-working”

Some organisations introduce co-working but selectively – just for certain individuals, groups of individuals or departments. But allowing selected groups to work in a more flexible setting, which is different to the rest of the organisation, may breed division or resentment among staff.

Organisations can also miss out on the opportunity to translate the benefits of co-working across wider areas of the business. While it may not be practical to extend co-working across the whole company, this needs to be carefully managed to avoid any risk of cultural clash.

Motivation can be a further barrier to the successful implementation of co-working. Companies need to be clear about their objectives and about what creates the most value for them. Co-working that is imposed from the top down without due consideration of the user or employee experience is unlikely to yield the benefits most companies are seeking.

By tailoring workplace solutions companies can limit their exposure to some of these barriers and achieve seamless integration of co-working into the established real estate strategy.

Creating value from co-working

Organisations that aspire to innovate cannot ignore co-working. Competition for talent is intensifying and the workplace is a critical tool to support recruitment and retention. Organisations need to embrace the new reality of employees’ expectations and technology-enabled ways of working and adapt their workplace strategies accordingly.

An innovative design, focused on flexibility and interaction in a well-connected location can boost employee engagement and attract talent. In this context, co-working can help companies appeal to different generations by providing a choice of different work settings.

This is not simply about creating another place to work. The experience itself is paramount to making co-working a success and should ultimately aim to satisfy an organisation’s wider business objectives.