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The office and the law firm brand are intertwined: It’s a significant tool in the arsenal for recruitment and retention as well as business development and client relations. This has not and will not change. However, exactly how these activities are leveraged as an extension of the physical office have and will change.

 

By Anthony Davies

This article originally appeared in the September 2021 issue of Legal Management Magazine here

 

Ninety percent of firms across the top 400 are executing a hybrid return-to-office plan. It’s not a question of whether the law firm of the future will be decentralized. It’s happening now. The question is, how will law firms make it all happen — the branding, the culture and client relations — when everything has changed?

A big part of the answer is hoteling. In law firms, hoteling is a bad word. However, for the Big Four consultancies — PwC, KPMG, Deloitte and Ernst & Young — hoteling has been a positive operational construct for over a decade, or in some cases longer. I’d argue that the success of the decentralized law firm depends in some part on how well firms can shift hoteling from the negative connotation of “losing my desk”  to the positive connotation of “having a hotel-like experience,” as is the case in the Big Four.

Hoteling is like working in the office full time, but better. Here is how it may look for law firms.

 

The Business Case for Hoteling

The number 90% comes from the Return-to-Office Readiness Survey conducted by Forrest Solutions this past May and June, where we specifically wanted to understand how firms were going to operate a hybrid workforce.

What we found surprised us. Among myriad issues, firms were much more concerned about how they were going to manage their meeting rooms and office spaces moving forward than they were about, say, vaccination policies. Specifically, 82.75% of firms’ documented return plans included meeting room management and visitor screening, and only 27.59% included vaccination policies.

The widespread interest in meeting room management indicated a culture-wide shift toward hoteling concepts. Hoteling has long been successfully deployed in professional services firms where “clean desk” policies have long supplanted desk “ownership” and “private” office spaces. Technologies and solutions such as wayfinding, meeting room and desk booking platforms, virtual reception and brand ambassadors have been embraced to create seamless experiences for staff and visitors alike.

Based on use studies from UnWork — prior to the pandemic — the highest in-office desk utilization was 72%. This, in combination with a hybrid workforce, could result in more than 40% of office space being unoccupied at any given time. Emptiness is a very large motivator for firms to act on the second largest overhead cost at any law firm: real estate.

According to the 2021 Report on the State of the Legal Market from Georgetown University Law Center and the Thomson Reuters Institute, real estate comprises about $30,000 per lawyer per year. Firms stand to gain substantial savings through real estate reduction and increasing their desk utilization — as much as 3.5% of revenue by renegotiating leases or downsizing real estate needs anywhere between 10% to 30%.

But emptiness impacts another aspect of the firm: culture. So what is the cultural impact of emptiness?

 

The Work Culture Case for Hoteling

It’s important to note that the purpose of office life is collaboration. But with fewer individuals in the office at any given time, collaboration is diluted — unless it is intentional. Hoteling is a better conceptual support for intentional collaboration in a hybrid office.

Law firms need to create new, robust processes for first-year associates up through the senior ranks that focus on intentionally creating collaborative spaces and environments. They need to offer times and spaces for social interaction, and this does not happen without meeting room management.

This also entails proactively changing the connotation of hoteling for lawyers. Law firms should pivot to an enhanced range of services like individuals can expect from a concierge — i.e., shifting “hoteling” to a “hotel-like experience.” That includes reimagined reception spaces and service offerings, including dry cleaning, shoe polishing and help with local arrangements.

It also means more support in getting individuals settled in meeting spaces, including attention to their needs for food and drinks, IT support, and ensuring space for those who want to work after their meetings are complete.

As the office’s purpose shifts to collaboration and socially focused activities, companies should aim to create these balanced offices that blend comfort, collaboration and productivity to heighten — not lessen — what the office experience offers.

In a hybrid environment, do lawyers who work from home need to replicate their isolation in office? Office space needs have changed, and firms need to strike a balance between collaboration and focus spaces, incorporating elements for social interaction.

 

How It’s Worked In Professional Services

Professional services have already moved in this direction. Since many of their personnel were working entirely remotely before the pandemic, that shift in vision for the office is an established fact.

The professional services model de-emphasizes ownership and individuation and emphasizes team over the individual. As a result, this makes the hoteling approach to office space more accepted in these firms as the real estate is fit for purpose. Most of their employees are mobile, so this model provides better office space management, maximizing office space and delivering major savings for the company. Not only is unnecessary real estate eliminated, the organization also saves money on overhead costs.

If an employee works the majority of time at home or on the road, there’s no point in assigning them a seat and renting space. If you know that specific rooms are frequently left empty, you can turn those spaces into lounges or collaboration spaces for employees that drive improved productivity and teamwork. Employees become more productive, deliver higher-quality work and higher value to their clients.

And it’s not enough for firms just to turn to technology like booking systems to manage their meeting spaces. Firms need more people managing meeting rooms. Professional services firms have an army of people around the country helping them manage meetings and meeting rooms. Firms should be looking at these added expenses in the context of attorney retention and reduced real estate spending.

The future of law firm operations is already here. Lawyers (and their staff) like working from home. Firms are engaged in talent wars at every level with remote work capabilities as one of the pivotal benefits. The great news is, firms that can leverage the benefits of hoteling stand to gain significantly from real estate reduction strategies — and elevate the experience of being in the office for a new kind of client and workforce.

 

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