Law firms that over-reached in terms of their office commitments in the Big Apple have opened the way for other firms to enter the New York legal fray. Smaller firms like Seattle-based Perkins Coie and London-based Herbert Smith are now hitting New York, New York.
As the Wall Street Journal reports, for law firms with big practices in cities like London and Chicago, entering the competitive New York City market still can prove daunting. But now that some of the city’s top firms are making trims to cope with leaner times, that’s making room—quite literally—for smaller firms.
Seattle-based Perkins Coie has been around for a century with a strong bankruptcy and intellectual-property practice. Bob Giles, the firm’s managing partner, says he was often asked why it had no New York presence—until it became something of a joke.
“We thought about having T-shirts made: Not in New York,” Mr. Giles says. “Then we considered ourselves lucky not to be there in 2007.”
But now the firm is taking advantage of the turbulence in the legal industry in the last few years to finally create a presence here.
Perkins originally subleased about 10,000 square feet from Haynes and Boone LLP at 30 Rockefeller Plaza one year ago. It recently expanded to about 25,000 square feet, which it is subleasing from another law firm, Squire Sanders in the same building. The firm’s New York office has grown from three lawyers to 18.
“There are a number of firms that over-expanded a little bit and made commitments beyond what they should have made. We’ve been very conservative in our leasing and we also have no debt,” Mr. Giles says. “All of a sudden, we’re the most popular girl at the ball.”
Twenty-five spaces once occupied by law firms are on the market for sublease in New York, according to CBRE Group Inc. Most of those spaces are modest—in the 25,000-square-foot range.
Experts say that reflects a move on the part of many firms to use space and other resources more conservatively, as some have laid off secretaries, hired fewer new associates or are packing more employees into less room.
That contraction has allowed smaller firms to get a good deal on these spaces, which are often already perfectly designed for a law firm.
“In the law firm industry in New York today, there’s a little bit of a seesaw effect,” says Ken Rapp, a broker in CBRE Group Inc., who specializes in representing law firms.
“In the last 12 months, we’ve seen the largest law firms stay steady or shed a little bit of space…On the other side of it, are larger law firms that may not have a large or significant presence in New York, taking advantage of that,” Mr. Rapp says.