Re-thinking Law Firm Real Estate
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Marcia Hart, CEO of Roomtag LLC, presented on re-thinking real estate for law firms. She discussed key drivers of change like economics, technology, and demographics that are putting pressure on the traditional law firm office model. Hart argued that the focus on efficiency and space utilization can be a "myth" if it negatively impacts productivity. New design solutions like the Universal Office and Productive Floor models aim to optimize natural light, social interaction, movement, and personal control to drive productivity. Roomtag's software allows firms to measure, analyze, and communicate space usage to facilitate change management.
Re-thinking Law Firm Real Estate
- 1. Re-thinking Real Estate: Business Matters Session | May 22, 2014 Marcia Hart, CEO Roomtag, LLC Whats Different Now and How Can Law Firms Respond?
- 2. 息 2014 Roomtag LLC, all rights reserved Speaker Marcia Hart, CEO Roomtag LLC Registered Architect , Entrepreneur Harvard Graduate School of Design, M. Arch. Princeton University, A.B. Architecture 息 2012-2014 Roomtag LLC, all rights reserved 2 Space requirements for lease transactions Quantitative analysis Human factors in design Decision dynamics
- 3. 息 2014 Roomtag LLC, all rights reserved Gain specific knowledge To communicate with management To avoid waste of opportunity 3 Purpose When? Lease terminations Leadership transitions M&A, laterals Growth, consolidation
- 4. 息 2014 Roomtag LLC, all rights reserved 1. Change Drivers 2. The Efficiency Myth 3. Design Solutions 4 Three things
- 5. 息 2014 Roomtag LLC, all rights reserved 5 Whats different now: Who is REO Speedwagon? Hewitt Tomlin
- 6. 息 2014 Roomtag LLC, all rights reserved Technology Timeline 6 Cant Fight This Feeling 1984 Keep on Loving You 1980 You are here. Happy 2014
- 7. 息 2014 Roomtag LLC, all rights reserved Office of the 80s 7
- 8. 息 2014 Roomtag LLC, all rights reserved Change Drivers Economics Structural change Sustained pressure & scrutiny on bottom line Technology Digital information Mobile platform Less physical stuff Workplace = space + technology Demographics Boomers in minority Upcoming workforce prizes flexibility & technology over space Business of law Multi-market management Fee structures Project management Staffing, workflows, reporting 息 2013 2014 Roomtag LLC, all rights reserved 8
- 9. 息 2014 Roomtag LLC, all rights reserved a place (?) to <WORK> Find info and support Create work product Deliver services Interact mentor, learn, share 息 2014 Roomtag LLC, all rights reserved 9 What is the office?
- 10. 息 2014 Roomtag LLC, all rights reserved Efficiency: Cost Context Rentable Square Feet (RSF): 20,000 RSF Occupancy: 30 40 attorneys Lease rate: $50 full service Annual lease cost: $1,000,000 17, 400 RSF 24,800 RSF15% savings on 10-year lease is $1.5 million
- 11. 息 2014 Roomtag LLC, all rights reserved The Efficiency Myth $ Revenue per RSFRSF per attorney $40.00 per RSF 20% vacancy 1.2 leverage (assoc/partner) 1500 hrs. billed $400 per hr. realized rate $600k annual revenue per lawyer $ Revenue per RSF $ 800 $ 1,000 $ 1,200 750 600 500 benchmarks variables -2% productivity drop $ Cost per Attorney $ Cost per Partner Impact per Partner $36,000 $ 79,200 $28,800 $ 63,360 $ 15,840 $24,000 $ 52,800 $26,400 Impact per Partner Net Impact $ (26,400) $ (26,400) $ (26,400) $ (10,560) $ (26,400) $ 0
- 12. 息 2014 Roomtag LLC, all rights reserved Productivity Drivers Natural Light Social Interaction Physical Movement Personal Control 12
- 13. 息 2014 Roomtag LLC, all rights reserved ALA 2013 keynote Sony productivity levers 13
- 14. 息 2014 Roomtag LLC, all rights reserved what is productivity? The rate at which services are produced: output ($ revenue) per unit of labor (hrs.) Create more value in one hour, generate more $ revenue per year What has value? Law Firm Value Table Seller Buyer (Client) Expertise Experience Intelligence Connections Boutique services- communication, recruiting, retention, mentoring Time Research Documentation Administration Commodity services technology, outsourcing, leverage, temps, LPOs less space more networking innovation Demand contraction >> Buyers market 14
- 15. 息 2014 Roomtag LLC, all rights reserved Design Solutions 15 The Universal Office The Productive Floor
- 16. 息 2014 Roomtag LLC, all rights reserved The Universal Office 16
- 17. 息 2014 Roomtag LLC, all rights reserved The Universal Office 17
- 18. 息 2014 Roomtag LLC, all rights reserved The Productive Floor 18
- 19. 息 2014 Roomtag LLC, all rights reserved Change management measure analyze communicate space people timing $ money vacancy adjacency allocation alignment culture opportunity 1 2 3 19
- 20. 息 2014 Roomtag LLC, all rights reserved Measure - occupancy highlight1 20
- 21. 息 2014 Roomtag LLC, all rights reserved vacancy highlight1 21
- 22. 息 2014 Roomtag LLC, all rights reserved detail views1 22
- 23. 息 2014 Roomtag LLC, all rights reserved List views1 23
- 24. 息 2014 Roomtag LLC, all rights reserved analyze2 24
- 25. 息 2014 Roomtag LLC, all rights reserved 息 2013 Roomtag LLC, all rights reserved bonus content less space more networking innovation Next Gen Layout Natural light Social interaction Physical movement Personal control 25
- 26. contact: Marcia Hart CEO marcia.hart@roomtag.com 202 302-0292 Hewitt Tomlin Marketing Associate hewitt.tomlin@roomtag.com 731 499-0533
Editor's Notes
- #2: This webinar is for experienced legal administrators and facilities managers Who need to understand whats happening right now that affects legal office space. It contains expert-level knowledge and concrete ideas that you can put to work today.
- #4: Experienced administrators who need to know how to communicate effectively with management about real estate trends and realities, so they dont blow their opportunity
- #8: Isolate perimeter vs. interior No natural light/no community space Excess space in core Empty workstations
- #12: Relationship between space and money is direct. % savings match % RSF reduction. 33% less space results in 33% less cost. The size of the opportunity is a function of lease rate and space reduction. However reducing space to save money may not necessarily maximize Profits Per Partner (PPP). If productivity suffers, cost savings are wiped out. What % drop in productivity would wipe out $33,000 in cost savings? -1.7% How about the flip side. What if space improvements could increase productivity? What are the potential benefits in terms of PPP Add efficiency improvements + productivity improvements = ______ potential PPP Productivity opportunity relationship is more complex.