Insights

The end of the office?

  • Written By: Karen Knapp
  • Published: Tue, 15 Sep 2020 17:00 GMT

One of the biggest cultural shifts likely to result from the coronavirus lockdown is changing expectations about working remotely and how organisations manage their office space. The legal industry is generally seen as resistant to change, with traditionalist managing partners keen to keep operations within an office environment, favouring physical meetings and interactions over what was often seen as the inferior and unreliable alternative provided through technology.

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The coronavirus has turbo-charged the working from home revolution. Survey respondents were asked to indicate how often they worked from home prior to the pandemic; 49% indicated that they did so infrequently (less than four times a month), 25% did so sometimes (one to two days a week), 5% frequently (3 days a week or more), and 21% never.

Things change when looking at expectations around working from home patterns once normality resumes. Those expecting to ‘never’ work from home falls to just 2%, while those working from home infrequently (less than four times a month) plummets to just 13%. A majority of respondents (57%) expect to work from home one to two days a week. Significantly, 28% of respondents expect to work from home three days a week or more, up from just 5% who did so prior to the pandemic.

There is no significant variation for firms based in London. Prior to lockdown, 7% of London-based respondents worked from home three or more days a week. Post-coronavirus, a quarter expect to do so. 22% were working from home one or two days a week pre-coronairus, and 58% expect to do so once ‘regular’ working conditions resume. Notably, the number of London respondents expecting never to work from home is down from 23% prior to the lockdown to zero.

This will have significant ramifications for working culture and firm operations. While dispersed firms such as Keystone Law may have been seen as a radical alternative to the traditional law firm model, it may now provide a blueprint for firms looking to shift their model.

If nothing else firms will surely be tempted to rethink the way they use their office space. Research undertaken by The Lawyer this year shows that on average, the UK’s top 200 firms spend £38.86 per sq ft of office space. This figure climbs to £63.59 per sq ft for London office space.

London’s property rates were already an issue prior to the pandemic. The amount of space occupied in the capital by the top 200 UK law firms fell in 2019. One such firm was Capsticks, whose footprint in the capital fell from 44,179 sq ft in 2015 to 25,365 sq ft in 2019.

Rachael Heenan, senior partner at Capsticks, says that any doubters within the firm’s executive have changed their view on the necessity of a conventional working environment: “The naysayers are now seeing the benefits of flexible working. People are enjoying not having to commute and going forward there will be a lot more room for virtual interactions as people consider whether they really need to travel three hours to attend a meeting. This will never fully replace human interactions, but we’re now really thinking about both our client relationships and how best to maintain a community at work.”

Survey data shows that a return to regular Monday to Friday working patterns once ‘normal’ conditions resume is highly unlikely. If offices are only running at half of their original capacity at any given time, are firms really going to continue shelling out on sky high rents, particularly in London? Change is likely: law firms may change configuration of existing office space, sub-let or shift to cheaper, regional hubs.

Vanessa Barnett, partner at Keystone Law, has experience at both extremes. She left her partner position at a top City law firm because of its policy that no-one should work from home. She has worked remotely ever since.” I think it’ll be hybrid for most firms as some tasks can only be performed physically,” says Barnett. “Some things are much easier in an office; you can generate creativity through chats while having a cup of tea and it’s hard to recreate those virtually. On the other hand, Virgin Media and O2 managed to negotiate their joint venture through virtual mediums - If a deal of that size can happen remotely, it proves the model.”

To hammer this point home, respondents were asked to state which ‘coronavirus-related’ changes they expect to last for the foreseeable future. An increase in remote working, reduction in physical meetings, and an increased use of video conferencing software were the most popular answers, with 94%, 88% and 87% of respondents seeing these shifts as permanent.

Notably, 49% of respondents believe that there will be a permanent reduction in office space, while 27% believe there will be a long-term reduction in staff headcount. These issues are also tied to financial health. Cutting rents and salaries off the balance sheet is likely to be appealing for an industry that has had to face its own vulnerability in this downturn.

However, before we signal the ‘end of the office’ we need to consider some of the underlying factors. The human race is a social one and to a significant extent law firms are built on trust, which relies on relationships – both with our fellow colleagues and with our clients. While there are undoubtedly benefits from more flexible working, we need to ensure that we don’t dissolve some of the bonds that hold us together.

Longer term, as elements of day to day work become automated, those seeking the input from professional advisers will do so not because of their ability to process a transaction (the computer will do that) but because of their ability to input, improve and develop a better outcome. It will come from collaboration with colleagues. While IT systems have proved to be an effective tool to keep in touch during a crisis, they may still be an imperfect substitute for face to face collaboration.

 

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DISCLAIMER
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of publication.

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Karen Knapp

Director, Private client tax services

Private client tax services
London

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