The Flight to Quality and Workplace Experience

By Anthony Davies

This article originally appeared in Law Journal Newsletters Here: here

Mandates:  This time with teeth

That the pace of change is “accelerating” is surely an understatement.  What seemed almost a near certainty a year ago—that law firms would fully and permanently embrace work-from-home—is experiencing a seeming reversal.  While many firms have, in fact, embraced hybrid operations, the meaning of hybrid has evolved from ‘office optional,’ to an average required 2 days a week, to now many firms coming out with four-day work week mandates—this time, with teeth.

Without the teeth, what most firms saw over the past 18 months was high rates of non-compliance with RTO policies.  Forrest Solutions conducted a survey earlier this year, showing that while the majority of firms (93%) had RTO policies in place, 94% of attorneys were not complying with the policies.  This meant, for firms with 2-3 required days in the office in their RTO policy, firms were, on average, experiencing 1-2 days of office time for their attorneys.[1]

Fast forward, now we are seeing a significant uptick in firms putting teeth to their policies.  Some law firm measures include linking time in the office to bonus qualifications, some to partnership opportunities, some to both.  Specific announcements include the Skadden, Arps, Slate, Meagher & Flom announcement in May that employees must work from the office for a minimum of four days a week and others including Paul Hastings, Milbank and Davis Polk & Wardwell are taking similar stances.

But punitive measures alone have proven inadequate and also increase the risk of attorney attrition during a time where there’s still a very real and heightened war for talent.  In fact, demand for top legal talent remains high even as the economic climate is expected to be slower in 2023:

  • Competition for top graduates out of law school is as stiff as ever, with the 2022 graduate unemployment rate (5.3%)—half of its 2013 level.
  • Ninety percent of firms indicate they will also continue to look to poach individual talent and entire legal practices from other firms.
  • Hiring may remain more tepid but attracting and retaining the best attorneys will continue to be top priorities for law firms.[2]

That’s why it was so interesting to see that in addition to stricter measures is the push for amenities and enhanced workplace experience in the office:  the carrot and the stick.  It was evident for instance, in our survey as mentioned earlier, that firms that made at least one change or addition to their real estate, including adding amenities or workplace experience – tangibly moved the needle in terms of attracting more attorney time in the office by nearly 20%–which brings us to the flight to quality.

 

The Flight to Quality

With the onset of hybrid, lawyers learned that they liked working from home and law firms learned they could potentially save on costs reducing real estate.

To that end, law firms have been slowly reducing real estate and in the past 18 months have reduced 13% of real estate square footage overall –a 4% ramp up of the downsizing trend that existed prior to the pandemic.[3]  The declines in space-per-attorney have been even larger in high-cost markets.  Am Law 50 firms have recently reduced their average square footage by 20% nationally but by 25% in high-cost markets.[4]

But the reductions have been strategic.  Many law firms have taken advantage of the current environment and flurry of legal sector leasing activity to upgrade their spaces to Class A buildings and focusing the downsizing on the amount of space per attorney while increasing focus on new workplace trends are emerging, including:

  • Growing emphasis on the importance of collaboration, through the introduction of knowledge-sharing spaces and team offices in the work areas rather than only in client-facing conference centers
  • Workplace experience, including both enhancing client experience and enabling ease of work for lawyers and support staff
  • Increased focus on wellness and diversity programs for all employees, as a means of fostering inclusion
  • Digital transformation using technology to streamline processes, enable productive and secure remote work, and support on- and off-site collaboration resulting from hybrid work[5]

This is the flight to quality, and it is demonstrably successful to help bring attorneys back in the office as per our survey results—especially when combined with workplace experience.

 

Flight to Quality + Workplace Experience

Firms are quickly realizing that an upgrade in real estate is diluted if there is no equal upgrade in office and hospitality services in tandem. You wouldn’t take your Porsche to Jiffy Lube.

With the seismic transformation to the ways we work, it necessarily followed that the office must be entirely transformed into a destination that is better than home to be successful.  And that this encompassed not only an upgrade of physical real estate, but the softer services that create the culture of the firm.

I’ve talked at length about how our professional services and advisory clients had established a new way of focusing in their people by turning to hospitality to attract and retain staff. Now it is clear law firms are following the same path, as they create workplace experiences with Ritz Carlton-like service and amenities. The workplace has to be a better experience than working from home to offset the time and inconvenience of the commute. This has been going on for some time in other industries, with global brands creating immersive, authentic connections that support meaningful memorable moments in an effort to drive loyal behavior.

Now when we work with our law firm clients, workplace experience is a uniquely delivered, operationally consistent high engagement, white glove hospitality service that is built and implemented in a continuous innovation loop.

Operationally, workplace experience makes the experience of the modern, hybrid office hyper-efficient and frictionless.  As many firms have implemented room booking or desk booking technologies, it’s workplace experience that makes hybrid seamless: staff help lawyers and visitors with wayfinding services, escorting people to pristine desks that have been pre-populated with the exactly correct IT outfitting.  Professionals are provided a booked with local amenities, from restaurants and dry cleaning to cinemas and entertainment.  Workplace experience staff create relationships with specialty cuisine to satisfy the most esoteric requests and note of dietary sensitivities and create special Uber Eats groups and fully manage the process from ordering to lobby pick up to desk delivery.

Visitors are provided themed welcome gifts populated with unique local favorites, from Florida-orange chocolates to Ghirardelli, and guided by lobby ambassadors to correct elevator banks.  Premium locations such as interview floors are stocked with exceptional snacks and highly trained baristas to delight guests.

When our workplace experience clients, travel intra-office, for instance, workplace experience means they receive arrival emails welcoming the visitor to the office with custom instructions regarding the office location, to efficient AV preferences and delivery and other preference details have been confirmed, communicated and ready to enjoy upon arrival – right down to specific brands of beverages, specialty milks and more.  And when the traveler includes the firm chair, that person is handed a leather bound itinerary of everything they are doing and seeing, minute by minute.

When law firm leaders apply a variety of “carrots” to incentivize attorneys back into the office, incremental success is gained that, over time, can deliver significant impact to what leaders want:  more time in the office, better compliance with RTO, and ultimately engagement with the firm culture.

 

Takeaways

In the end, costs in upgrading real estate and workplace experience are offset by slightly reduced real estate needs overall but also attrition, recruiting and higher compliance with RTO policies.  As firms are ramping up their stricter 4-day work week mandates, these are the counterbalancing levers.  The great news is, as firms become more serious about RTO, we’re also seeing the effectiveness of this combination as firms continue the experiment of creating a new culture, the foundation of brand longevity.

 

[1] Forrest Solutions 2023 RTO Survey

[2] 2023 Cushman & Wakefield Bright Insights

[3] Ibid

[4] Ibid

[5] CBRE, Flight to Quality, Quantified