ALM | Law.com Compass
Data, Strategy + Insights
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Driving Competition for the Best Office Space – The War for Talent & ESG |
The highly acquisitive nature of law firms for office space in recent years is one that has been seen across all levels, with large US and UK firms as well as smaller firms all leasing new space. The reason why firms have been particularly active in the commercial real estate market is due to several factors. These include the war for talent, ESG ambitions, lease events, and competition for prime office space, all of which have contributed to law firms' heightened activity in acquiring real estate. Two of these factors, the war for talent and ESG, have also led law firms to now ensure that they have the ‘right’ real estate in place.
The emergence of a law firm talent war has meant that firms are now looking at what mechanisms they can utilize to attract and retain talent. As well as remuneration and benefits, firms are increasingly turning to real estate as a weapon with the rationale that having the best possible office space can attract the top talent. For example, several Am Law 25 firms have recently signed ‘best-in-class’ space, with London in particular, at the forefront. The likes of Kirkland & Ellis, Skadden, and Latham & Watkins have all signed deals or are under offer on new space in the UK capital. Firms are now looking at office space with first class amenities including exceptional end of trip facilities, plenty of cycle spaces and terrace and outdoor space for occupiers.
ESG is a term that has increasingly gained importance for law firms and the wider corporate world, with ESG agendas now being discussed in boardrooms. Real estate has its part to play in this, and law firms are now recognizing the importance of having their real estate portfolios aligned with their ESG agendas. This is why more firms are now looking at new office space and specifically relocating to buildings with strong ESG credentials. Firms are aware that ESG is a topic that will continue to be of importance to their clients, and they are therefore expected to adhere to these aims. Real estate is seen as being essential to aligning with their clients ESG strategies.
Law firms in buildings approaching obsolescence will now need to ensure that their next office space will have high ESG credentials as well as the amenities to attract and retain talent. This has the potential to increase costs for firms, especially in markets such as London and New York, where best-in-class office space demands a premium. Moving forward, it's fundamental that firms have a clear understanding and strategy of what their real estate needs are, and with ever-rising competition and costs for best-in-class space, this is something that firms should be grappling with sooner rather than later.
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Atif Ludi, Legal Analyst | aludi@alm.com
Atif joins our analyst team having spent the last six years as an analyst at Knight Frank, a leading commercial property consultancy. During his time at Knight Frank, Atif was responsible for identifying, investigating, and presenting commercial property data trends as well as the creation of bespoke analysis and reports on behalf of clients, including leading UK and US law firms. Prior to joining Knight Frank, Atif held a similar analyst position at Jones Lang LaSalle.
Atif holds an undergraduate degree in BA Politics and a master’s degree in MSc Public Policy, where he focused his research on economic policy and political economy. Both degrees were obtained from Queen Mary University of London. |
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When exactly were supply chains invented? |
Thanksgiving is my favorite holiday. Low stress, great food, family, and friends, no need to worry about gifts. Just good people and food, and acknowledging our good fortune to have both in our lives.
The Thanksgiving holiday is based on a lot of mythology, of course. For their Thanksgiving holiday in early October, Canadians often reference Sir Martin Frobisher and his declaration of a day of thanksgiving back in 1578 when he landed his creaky, disease-ridden ship Gabriel on a Newfoundland beach. Americans, of course, reach for the Pilgrims: the pious founders of Plymouth Colony in what is today Massachusetts who celebrated their first successful harvest in 1621 (one year into their colonial venture) with a big feast, accompanied by local Native American allies. Turkey, cranberry sauce, stuffing, pumpkin pie, collard greens. Good stuff!
Maybe not. Remember, we are in mythical territory here. Very little is known historically about that first Thanksgiving meal. We’re not sure exactly when it took place, or why. Letters back to England vaguely suggest a celebration of plenty, with the menu not turkey or cranberry sauce but corn, barley, peas, clams, “fowl” (ducks?), and venison. The Native American participation seems to have been accidental, with Wampanoag sachem (chief) Massasoit just happening to show up during the feast with a diplomatic retinue. (They also hunted and contributed to the meal.)
What isn’t mythology about the Plymouth colony Pilgrims is that it was a financial failure. Some seventy investors lined up behind businessman Thomas Weston to fund the venture, and they pretty much lost their shirts. Part of the problem was Weston himself, who was less than honest about risks. (He would face legal problems for the rest of his life from snake oil-style investment schemes.) But another problem was that the company ignored the lessons of the Jamestown colony from a decade earlier which took several years to become self-sufficient. Historians John Butman and Simon Targett describe the scene in their 2018 book New World, Inc. The Making of America by England’s Merchant Adventurers when investors waited on the piers in Southampton in early 1621 for the return of the Mayflower – but what arrived was an empty ship. No timber, beaver pelts, sassafras, cod, metal ores; nothing. Immediately they abandoned the company and the shares became useless, which meant the company could no longer afford to send supplies to the colony. Investors complained about lazy colonists who didn’t produce anything worth selling, while colonists literally starved as they tried to create a colony from scratch.
They survived ultimately by forming a partnership with the local Native Americans, creating trade routes and diplomatic alliances across Native New England with the help of Massasoit. Another lifeline for them came in the form of another group of Puritans who arrived and founded nearby Boston in 1630. What was different about the Boston Puritans was they’d founded their own company and moved the entire company – its board, its resources, its shareholders – to Boston. There, under the leadership of lawyer John Winthrop, they established colonies all along the Massachusetts coastline, eventually expanding into New Hampshire, Rhode Island, and Connecticut. They also brought a fully-developed governance model for the colony down to local municipal affairs, so that from Day 1 in 1630, everyone knew what to do and who was responsible for what. They quickly established inland farming communities and began building roads and bridges to facilitate trade, while maintaining key supply contacts in England – and also developing trading relationships further afield. That last point is important because the Boston Puritans baked into their plans the reality that everything they couldn’t produce locally had to be acquired from very far away, thousands of miles away in fact. The colony’s supply relationships and trade strategy were built around that reality.
The Plymouth colonists benefited from their larger neighbor’s stable government, trade relationships and supplies, but also quickly became dependent on them. Within a few decades Massachusetts Bay Colony expanded to dominate all of New England, while Plymouth Colony had barely grown from its 1620 borders. In 1691, in a royal reorganization of the colonies, Plymouth Colony was simply merged into the new Massachusetts colony. For Americans today, Plymouth Colony survives in popular memory through Thanksgiving, and in the form of a large rock currently residing under a protective stone canopy where – and with no verifiable surviving evidence – the first Pilgrims allegedly disembarked from the Mayflower in 1620. That’s about it.
Why didn’t Plymouth Colony succeed? A key issue was Plymouth Colony was managed and funded by a company 3,300 miles (5,300 km) away. Its entire survival was based on a single point of failure, one company and its ability (and willingness) to fund supplies. The Plymouth Colony Puritans also did almost no research about Massachusetts or North America beforehand, though English fishermen and explorers had been visiting the region for a century by 1620.
John Winthrop’s Puritans, in contrast, had created layers of potential suppliers across England, and – when after the 1660 royal restoration England became more hostile to Puritan Massachusetts – Boston merchants developed commercial ties in the Caribbean. Those ties would create friction a century later in the seventeen-sixties when Mother England wanted to limit colonial trade, but in the sixteen-sixties, they saved Massachusetts Bay. As modern organizations struggle to identify the earliest signs of financial distress in their supply chains, then develop both financial and strategic plans to address them, it might be interesting for them to learn that Boston colonists were thinking along these same lines four hundred years ago. Geopolitics have long been a headache.
That’s what ties turkey giblets to supply chains. Well, almost. In truth, the Thanksgiving holidays have nothing to do with Frobisher or Plymouth Colony. In the US, Thanksgiving derives from the terrible Civil War during which President Lincoln repeatedly called for days of thanksgiving to honor the sacrifices of both soldiers and their families. In Canada, the government did something similar during the tribulations of the early years of the Dominion. Americans and Canadians got used to celebrating the holiday, but it didn’t become official until 1944 in the US, and 1957 in Canada. Wanting to promote a holiday that brought families together in hard times, both governments rummaged through history for an excuse – and we ended up with 16th and 17th-century symbols for what is really a 19th and 20th-century holiday.
Regardless of whether you’re a North American or not, this is a good time of the year to reflect on the positives in your life, and reach out to those who make your life better – personally and professionally – to let them know how much you appreciate them. |
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Ruth Sierra, Analyst, Pacesetter Research | rsierra@alm.com
Ruth is an Analyst on the Pacesetter Research team at ALM. Prior to joining ALM Ruth worked in education and research. She served as an Elementary Educator and Team Chair Leader using creativity and collaboration to promote a growth mindset. She has over 10 years experience in research. She worked for a consulting company as a Senior Global Manager for the market research team. Her responsibilities included Project Management, specifically research design, implementation, analysis, and presentation to clients. She completed her graduate degrees from Hunter College and Hofstra University in NY.
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Participate in our 2022 Surveys! |
Law Firm Marketing and Business Development Trends Survey |
ALM has partnered with Society 54 and By Aries to study the latest trends in law firm marketing and business development. This survey will examine several areas, including: - Organizational Structure - MBD Headcount & Budget - MBD Policies & BD Activity Totals - MBD Priorities & Obstacles
- Individual Sentiment The survey is anonymous and will take about 10-15 minutes to complete. The deadline to have responses submitted is December 2nd, 2022. |
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Tomek Jankowski, Director of Pacesetter Research: This article on Russia falling into recession is really non-news. A country currently having to commit larger and larger parts of its economic output to a losing war, and which has badly managed its internal resources for decades, and which has also been slapped with huge sanctions by the most world’s productive economies, is falling into recession. No surprises there. The real takeaway from this article is that from now on, the Putin regime will be less and less able to hide the economic consequences of the war from average Russian citizens.
Ruth Sierra, Analyst, Pacesetter Research: Had a hard time finding holiday decor and gifts last year? You may not have to wait for Black Friday this year for those bargain prices. Now that 2021 merchandise has been released from the supply chain nightmare, retailers have a surplus of inventory on holiday goods and are discounting them even earlier this season. Considering inflation rates, will holiday shopping in 2022 for 2021 merchandise help increase consumer spending?
Dan Masopust, Legal Analyst, ALM Intelligence: Artemis I, the unmanned spacecraft that will journey around the moon, finally launched after months of delays. This infographic from CNN provides numbers and perspective on this important step in putting humans back on the moon. Atif Ludi, Legal Analyst, ALM Intelligence: A long read on the IMF looking at its purpose and role in the world as the global economy faces significant headwinds.
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Geared specifically to the legal industry, Law.com Compass, previously known as Legal Compass, combines ALM’s industry-defining law firm performance metrics with talent, diversity, geographical, and law school-specific market intelligence. This powerful platform features unique modeling, benchmarking, and advanced search tools, enabling professionals to leverage the data in various methods.
Look Inside Law.com Compass and get the clarity you need to drive strategy and make the decisions that matter. |
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