Mid-Atlantic Research Reflections 2022 - Law Firms

Despite economic headwinds and increased expenses as many law firms shifted back toward in-person meetings and increased attorney travel during 2022, many law firms anticipate an increase in annual revenue from record-high 2021 levels. Attracting and retaining top talent remains a high priority, and many firms are upgrading their space to provide a compelling reason for employees to make the commute to work in-person. Although firms are grappling with how to increase office occupancy levels and design space for a hybrid workforce, the tenant favorable market conditions in Washington, D.C. have presented opportunities for many occupiers.

Law firm leasing is at an all-time low across the D.C. metro region, with just 26 firms signing leases larger than 10,000 sq. ft. for a combined 749,000 sq. ft. year-to-date. However, at least 425,000 sq. ft. of law firm transactions are currently pending in the market, with a handful expected to close by year-end, which would bring 2022 leasing to a comparable level with 2021. Of the leases signed so far this year, 50% were relocations as firms continue to take advantage of some of the largest concession packages in the country, often resulting in little to no out-of-pocket moving costs.