Whether leasing a small office for your solo practice or leasing an entire floor in a downtown high rise, your law practice's lease will play a vital role your firm's future. Traditionally, after personnel expenses, rental expense is the highest fixed expenditure for most law firms. Today, more so than ever, office leasing has become a complicated and arduous endeavor. The contract is thick and may seem overwhelming. However, with forethought and knowledge, the process need not be painful. Law firms face many unique concerns, such as expansion rights, personal liability and remodeling costs, which make structuring your firm's lease far from boilerplate. This article is divided into five parts and will explore a few of the many issues that confront law firms during the leasing process.
Do not underestimate the value of location. Many factors play into locating your law firm; distance from home, type of practice, location of clients, and so on. Before deciding where to locate your office, first decide what factors are most important to you and your law firm. The answer to this inquiry should give you a firmer grasp on where to look and who to contact.
Since executing an office lease is legal in nature many lawyers are reticent to ask for help, especially from non-lawyers. However, enlisting the help of a commercial real estate advisor or a landlord-tenant attorney who specializes in tenant representation is strongly recommended. Larger firms can enlist law firm leasing groups, who specialize in representing law firms. An effective advisor will know what space is available, the market rate, and supply the necessary forms. Perhaps more importantly, your broker will free your time for billable client work. Another factor to keep in mind is that tenant rep agents usually gets their fee from the lessor, meaning their expertise and help is free to you, the prospective tenant.
If you decide that you don't need help, then "going alone" is still a viable option. With the spread of information over the internet, now, more so than ever, a real estate layman has access to an abundance of information. Unlike residential real estate, commercial real estate has no uniform listing service such as the MLS. Many commercial deals are done off market, meaning that they are never advertised. However, the largest listing service for commercial real estate is LoopNet, which lists over 2.8 billion square feet for lease. LoopNet is a good starting point to locate available office space and is a valuable resource for finding comparable rents. Although retaining a broker or a landlord-tenant attorney is advisable, representing yourself may give you some bargaining leverage when negotiating down your rental rate. Try to pass the landlord's savings through to you.
James Bell is the managing partner at the Los Angeles, California law firm known as Bell & Weinstein.
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