Case Study

Global Law Firm

Situation & Objective

This legal client acquired another major law firm 2015. The acquisition had the following impact on our client’s real estate portfolio:

Having advised confidentially on the pre-acquisition real estate strategy, the team working with the client developed a real estate plan that was ready for implementation upon acquisition. The new real estate strategy set out to achieve the following benchmarks within 3-4 years post acquisition:

Approach

The team abstracted all leases and amendments, aggregated remaining obligations for all locations, performed occupancy evaluations at all under performing and redundant locations and completed in-depth research on each market. We then identified the immediate, moderate and long-term action items and began implementation city by city starting in Q1 2016 which led to the following;

• Eliminated all 5 redundant locations by way of consolidation, early termination, sublease, assignment and buyout. The 5 redundant cities together comprised 500,000 RSF. Post implementation, no redundancies remained and occupancy in the 5 cities was reduced to 250,000 RSF.
• By way of assignment or early termination disposed of 4 additional sites and any excess space at sites the firm was maintaining. Impact on occupancy was a reduction of 150,000 RSF.
• Completed lease restructures and extensions at 5 locations that were targeted as long-term strategic markets, and the firm was either paying an over market rent or long on real estate. Impact on occupancy was reduction of 100,000 RSF and $5.0M in per annum real estate spend.

Result

This approach has achieved the following for the client post acquisition:

• Total office count of 20 - reduction from 29
• Annual RE spend of $45.0M - reduction from $65.0M
• No markets with dual redundancies - reduction from 5
• Firm wide occupancy density of 750 RSF/attorney - reduction from 1,000+ RSF/attorney