Savills shares that New York accounted for a third of all leasing activity globally in the legal sector in the first half of 2024, equating to over 1.4 million sq ft of space, out of a total of 4.3 million sq ft across the world’s 15 largest legal markets, reflecting its position as the world’s principal legal hub.

Together, US cities accounted for 69% of overall H1 legal leasing activity in the world’s largest legal markets, reflecting the dominance of American firms in the sector overall, as well as the tendency for US legal offices to have a lower occupancy density and thereby requiring more space, according to Savills.

H1 2024 legal transaction volumes:

Source: Savills Research. Note: Largest legal markets determined by total number of offices of top 25 ranked law firms in Global 200.

In Asia Pacific, Singapore is in 4^th place, after Shanghai, Beijing and Hong Kong.

Savills reports that, globally, most legal practices maintained the same size of office space in H1, with just under a quarter increasing space, however the picture does vary regionally: 40% of firms in EMEA expanded office space in the first half of the year with Paris, Brussels, and London standing out as expansion hotspots. The former two cities host important national and international political centres, such as the EU headquarters, which create a clustering effect of top legal practices. The latter continues to attract an influx of US firms, which have dominated recent take-up activity and led to salary increases in the sector; many British law firms are looking to cities such as Manchester, Birmingham and Glasgow when considering office growth strategies, where legal talent is more competitively priced. A similar trend driven by talent is emerging in Australia, where some firms are looking to Brisbane and Melbourne to bolster practices, given salary expectations in Sydney are on average 19% higher.

Meanwhile, in China, while some international firms are increasingly reducing their physical footprints, this is balanced by top domestic counterparts relocating to larger spaces, exemplified by Shanghai, where domestic incumbents accounted for over half H1 volumes. Chinese firms also continue their expansion efforts in European markets, primarily serving China-based clients and working at lower fees than their western rivals.

Rick Schuham, CEO of Global Occupier Services at Savills, comments: “Legal occupiers looking to attract and retain top talent, drive performance, and prioritise ESG. These requirements are resulting in persistent demand for premium space that provides vibrant employee experiences and positive environmental impact. This is true for all firms, but particularly pronounced among top-tier global practices that are investing heavily in best-in-class space around the world. The flight to prime continues to drive relocations as well as office price premiums in tight global markets, especially in the US.” 

Sarah Brooks, Associate Director in Savills World Research team, adds: “Global law firms are re-adjusting international expansion strategies, while domestic firms navigate various challenges and opportunities in different markets. What unites all is the prioritisation of talent in real estate decisions, balanced against the need to optimise the amount they spend on property.”

Ashley Swan, Executive Director of Commercial at Savills Singapore says: “For Singapore, legal firms have been relatively active in a fairly benign leasing market. We have seen some firms take up new premises with a refreshed way of working as one way of attracting and retaining talent. We expect other firms to be considering such a move in the near future if they aren’t already doing so.”

Savills report also notes changes in the design of offices taken by legal occupiers, which are adapting to hybrid working patterns with more flexible, tech-enabled office designs, with more multi-purpose shared spaces. The sector, already ahead of other professional service sectors in its adoption of AI, is trending to smart technology that optimises office utilisation and facility management. One example is that firms are moving away from legacy meeting room booking systems, to intelligent solutions that select rooms based on attendance by in-person and remote attendees, easing pressures on meeting rooms.

Download Global Occupier Market 2024 here.

For further information, please contact Ashley Swan, Executive Director of Commercial, Savills Singapore as the details below.