Law firms try to take advantage of low rent

By Gertha Coffee and Péralte C. Paul


The Atlanta Journal-Constitution

Some of metro Atlanta’s biggest law firms are scrambling to find new homes while office space is plentiful and rents are low.

Those looking include Alston & Bird, Kilpatrick Stockton, Fisher & Phillips and Hall Booth Smith & Slover, which are currently in Midtown. In fact, Midtown, the official home of Atlanta law firms, has about a dozen firms shopping for a total of nearly 1 million square feet of space, according to a report by Jones Lang LaSalle, a commercial real estate services firm.

“Many of them are shopping for significantly less space than their current offices, and not just because they’ve eliminated jobs,” said Dale Lewis, vice president at Carter commercial real estate company. “Space efficiency is in.”

Hall Booth recently signed a long-term lease to relocate from Midtown to downtown, a move that will save money and allow the firm to work more efficiently, said managing partner Rush Smith.

The firm plans to move into 54,000 square feet of space at 191 Peachtree Tower next April. The firm’s lease at Atlantic Center Plaza ends April 30, 2010.

“One of the priorities for Hall Booth in the future is to have the ability to offer clients and guests large enough accommodations to provide education, business development and networking events,” Smith said. “Our choice to move ... to a Cousins Properties-owned and -managed building was influenced by the fact that we didn’t have to pay rent on approximately 6,000 square feet of office space needed for these functions.”

He said the firm has arranged to partner with the Commerce Club and its operations group, the 191 Club, to host functions inside the building, but outside its leasehold.

“We will use the Commerce Club’s conference room,” he said. “It’s clearly a fantastic bargain.”

Also, he said, lawyers’ offices will be more compact and the library and support space will be downsized “to reflect technological advances in legal research and document storage and retrieval.”

Technology and changing work habits are pushing many firms to look at their options, said Atlanta real estate veteran Ben Raney, who is representing Paul Hastings Janofsky & Walker in its search for up to 100,000 square feet of space. Paul Hastings’ lease in Bank of America Plaza expires in 2012 and the firm is looking in downtown, Midtown and Buckhead, Raney said

“Law libraries have slipped from spacious digs to online only,” he said. “Lawyers coming out of law school can create documents on their laptops faster than they can dictate one or scratch it out,” so today’s law offices no longer require an administrative-heavy design, he said.

Also, some lawyers may work from home part-time and share office desk space with colleagues.

Some smaller firms, by virtue of their size, were flexible enough to make some of those changes already so the pressure to move isn’t as great.

Scoggins & Goodman, which focuses on commercial real estate law, considered moving from its Peachtree Center locale and scoured sites in Midtown and downtown. But the firm, which had already reconfigured its space when it renewed its lease in 2005, opted to stay put, said Randy Scoggins, a principal in the firm. Scoggins said the firm is looking to renew its lease with its current landlord for another five-year term when it expires next June.

Law firms Alston & Bird and Kilpatrick Stockton have combined requirements of nearly 650,000 square feet and both are focusing on Midtown, according to Jones Lang LaSalle, which was hired by Kilpatrick Stockton to help with its search.

Alston & Bird, one of Atlanta’s largest law firms, was a pioneer when it relocated to Midtown from downtown in 1988. The firm, which has offices in One Atlantic Center and Atlantic Center Plaza, is looking for 300,000 square feet to 350,000 square feet of space, down from the roughly 420,000 square feet it has. The firm’s current leases expire in October 2013.

“Generally, you can’t count on there being a bunch of 350,000-square-foot blocks of space being available when your leases expire,” said Mark Rusche, who heads Alston & Bird’s real estate finance and investment group and is heading the firm’s office space search. “What you have to do is explore it well in advance.”

Among the considerations: Having a developer build a new building with Alston & Bird as the anchor tenant, taking space in another building or renewing the leases at its current location.

And while Alston & Bird expects to have some of the traditional trappings of a silk stocking law firm in a planned conference center and public meeting spaces — where most client interactions take place, anyway — the lawyers’ offices themselves likely will be more understated.

“That space will become more efficient and will be decorated and appointed in a more basic manner,” Rusche said. “The work spaces that we design will be much more adaptable and flexible.”

For firms looking to move before their leases expire, landlords are eager to offer free rent and other concessions for early occupancy because of rising vacancies and the glut of new construction, lawyers and tenant representatives say.

Roger Quillen, chairman and managing partner of Fisher & Phillips — headquartered in Atlanta with 21 locations nationwide — said the Atlanta office is in the market for the equivalent of two office floors of space, or about 50,000 square feet.

Its current lease, at Resurgens Plaza in Buckhead, expires Dec. 31, 2010. The firm has been at the location since 1988 and is one of the original tenants, he said.

“Naturally, we’re looking,” Quillen said. “The marketplace is just full of attractive buildings.”