The most valuable asset to an attorney
is time. If his or her law office is not
adequate, either in space or efficiencies, billable hours are wasted.
That is when a knowledgeable and experienced real estate broker should enter the
picture, according to Bo Estes, Senior Vice
President, Office Services Group for Grubb
& Ellis Company.
“If the location is obviously lacking and
the senior partner does not hire outside
brokerage services, he’s basically utilizing
his own time to do something that a real
estate professional specializing in tenant
representation could do for him more
effectively,” says Estes. “A tenant rep broker brings a wealth of knowledge to the
table that can only enhance the whole
lease process and add value to the decision
that the firm finally makes.”
Smart Business talked to Estes about
the factors that must be considered when
locating or relocating a law firm.
What are the most common reasons why law
firms seek your assistance?
Most of the time, it deals with a lease that
is either expiring or nearing expiration or
there is a need for expansion. In the case of
an expansion, the law firm might be looking
into growing an existing office or entering
into a new market. In either case, they will
need timely and accurate information in
order to make good decisions. There are
also times when the client wants to take
advantage of an opportunistic market; for
instance, when a current lease rate may be
higher than what the market currently
demands.
Do these occasions include both renegotiation of a lease and seeking a new lease?
Yes. In the Dallas market, it has been very
common to approach an existing landlord
and renegotiate a lease to cut costs.
Landlords are eager to renegotiate because
they want to add more value and stability to
their building by securing tenants for a
longer term.
What are some factors to consider when
evaluating office space?
Over the past five years, a lot of law firms
have taken a hard look at their space
requirements — including layout, building
infrastructure and how the building is configured for technology. They typically
decide that they need to right-size their
space, or make it more functional and
more efficient.
Because of changes in technology, law
firms are also looking at fiber optic speeds,
electrical requirements and accommodations that will allow for sufficient computer backup. To protect client information,
the building must provide the necessary
infrastructure for firms to install adequate
technology backup for their servers.
What are some pitfalls that legal firms might
fall into when looking for office space?
It is a big commitment when signing a 10-to 15-year lease. One of the most frequent
pitfalls for a law firm is not leasing enough
space for additional growth or not having
options on future space negotiated into the
lease. Another trap might be just the opposite: leasing too much space and not having
the options to either reduce space or terminate the lease if, for some future reason,
the firm shrinks.
What do real estate professionals have to
know about clients to effectively serve them?
A broker has to have a clear understanding of the client without prying into any
proprietary information. He or she will
require a thorough understanding of the
philosophy and goals of the partners and
future plans. The questions a broker might
ask include: What types of law do you practice? Which practices are in a growth
mode, which are stagnant, which are dissipating? What locations — what parts of
town — are priorities? Do you need to be
near your client base? Do you want to be
close to mass transit? What kind of image
do you want to portray? Have you established a budget for your office space? Are
you willing to write a check for improvements above and beyond what the landlord
is going to offer in a tenant allowance?
What qualifications should a law firm look for
in a real estate broker?
Experience counts and local market
knowledge, as well as a familiarity with
landlords and lenders, is critical. He or she
must know what is going on in the Dallas
area from the standpoint of where space is
available, what kind of deals are being
made, what kind of deals law firms in particular are securing, the various costs associated with being in certain buildings, as
well as being aware of certain efficiencies.
Any law firm that is considering moving or
opening a new location should take advantage of some of the outstanding real estate
expertise in the brokerage community.
BO ESTES, Senior Vice President, Office Services Group, for
Grubb & Ellis Company in Dallas. He solely represents tenants.
Reach him at (972) 450-3326 or [email protected].
