🔒Hartford area law firms seek more investment in technology, less on office space

The three highest fixed costs for law firms have traditionally been personnel, real estate and technology — from highest to lowest in that order.

But the pandemic has changed the mindset of many industry leaders. After more than a year of lawyers working remotely and increased dependency on digital tools, many firms are planning to shift their investments to spend less on real estate and more on technology.

The trend is manifesting itself as more law firms embrace a hybrid work environment in which their lawyers and other staffers split time between the office and their home.

“We are looking at trying to change some of our long-term investment in real estate to long-term investment in technology, which we feel will make us much more competitive and allow us to have talent wherever the best talent is,” said Kent Nevins, chair of Hartford law firm Shipman & Goodwin’s management committee. “During this pandemic, we’ve hired talented people in Colorado, Atlanta, Florida, all sorts of places. Since we will always have a virtual component, we are looking carefully at how we lay out our office.”

Shipman & Goodwin, which currently occupies 110,145 square feet at One Constitution Plaza in downtown Hartford, is looking to downsize its office footprint as its lease comes up for renewal, Nevins said.

The firm is likely not alone. As the hybrid model becomes standard, and lawyers spend more time working remotely, many Hartford-area law firms will be reassessing their space needs.

Sherry Cushman, vice chair and executive managing director of commercial real estate firm Cushman & Wakefield, told Thomson Reuters in March that the legal sector will be downsizing “its real estate needs on average 10% to 30% — and in some cases, 40% to 50%,” based on polling her firm has done.

“In general, companies view the hybrid model as becoming, at least in the short term, more of a standard,” said Jon Putnam, an executive director at Cushman & Wakefield’s Hartford office. “And therefore they use slightly less space. There’s a few that are outside of that paradigm, but not many. The majority are thinking they need less space.”

Another wrinkle in pandemic-era office space needs is document storage. The need to store documents has decreased significantly as the pandemic accelerated file digitization. And many law firms have traditionally been major holders of paper files, which require extra space.

But as law firms rethink their office space, don’t expect them to abandon it altogether.

Clients still prefer a physical office to meet, said Leander Dolphin, co-managing partner at Shipman & Goodwin. While there are components of the job that can be done remotely, having an “anchor point” is important for the development of a firm’s culture, she said.

“We think it’s important to have some sort of an anchor, if only to be the backbone for our culture and the connectivity that we think is important,” she said.

Focus on technology

The hybrid approach is not without growing pains. Kermit Wallace, chief information officer of law firm Day Pitney, said the pandemic accelerated technology adoption while also presenting new challenges.

“When people moved from the 13 offices to one of now 550 offices, because everybody went home, we had to essentially become paperless,” said Wallace, whose firm has five Connecticut locations, including one in downtown Hartford at 242 Trumbull St.

Wallace said cybersecurity was a point of emphasis. Firewalls were upgraded and training was paramount. Day Pitney also had to deal with the challenges of security in people’s homes. In the office, there are certain restrictions about shredding documents or using virtual assistants like Google Home. Those rules are harder to enforce when people are working remotely, Wallace said.

Another challenge was training. Wallace noted the transition to online and paperless offices meant everyone had to get up to speed.

“Maybe the person in your ... quad of cubicles was just notorious for being really good at Excel and you relied on them,” he said. “Or there were those serendipitous moments where you go, ‘Is anybody else having a problem with X’ or, ‘oh, man, I have to get this out. Can we split this up?’ ”

Shipman & Goodwin’s Dolphin said technology has been more of a focus for her firm since the pandemic began.

“We’re looking at our videoconferencing because that’s where most of the meetings are happening,” Dolphin said. “We’re looking to make sure that we are having cybersecurity at the highest level.”

While most of the pandemic has operated in the unknown, some firms were ahead of the technology curve.

Cantor Colburn LLP, which currently occupies 64,103 square feet at 20 Church St. in downtown Hartford, went paperless before the pandemic. Co-Managing Partner Michael Cantor said he began to see staples of the pandemic even before March 2020.

“I would go down to some of my offices and there’d be hardly any lawyers there,” Cantor said. “That is precisely because we went paperless and they could work from wherever they want.”

Cantor said making sure everyone has their own monitors and other technology to effectively work at home has allowed the company to operate with much less space. Cantor says that while the firm enjoys its Hartford location, it wants to reduce its square footage by 25%.

He said the next big challenge is fostering relationships with both clients and workers. Cantor said he hopes that traveling to meet with clients returns. He also thinks that office culture has changed forever as people have become comfortable working from home.

As a result, Cantor said offices will likely look very different in the years ahead, especially as current leases expire. For Cantor Colburn, that might mean a mixed approach.

“For those lawyers who come in on a regular basis and those staff members, they need their place and we got plenty of room right now, so they’re all going to have their regular place,” Cantor said. “But certainly we’re also going to set up cubicles and offices that will be for those who are visiting on an irregular basis. We’re not going to go to something like an open office [floor plan], because I’ve also found out that people don’t really love that either.”