A cheap law office sublet may sound appealing, but there are certain things you should know beforehand.
Yesterday I called an attorney to follow up on a tour of our Midtown office from the week prior. He informed me that he liked our shared law office suite, but that he was looking at a cheap NYC law office sublet (also in Midtown).
When offering shared office space, you often encounter a prospect who is looking to get a deal, meaning they are only enticed by low monetary fees. This does not mean that he or she will not like your space. In fact, the person may love it, but the person is guided more by the dollar signs than what is actually offered.
When I asked this attorney how much cheaper, he mentioned it was $500 less per month for a similar sized space.
Sometimes prospective clients may even mention prices for other spaces that are priced less and are of similar size.
What is offered at Law Firm Suites is not easy to compare to an office that is being subleased by another firm. A key difference is that our spaces are managed by a professional staff who take their jobs of running the center seriously. In addition to a professional staff, shared office spaces provided by Law Firm Suites provides a network of like-minded professionals that has great potential to result in referrals which equals revenue.
Our existing clients get it. They’ve had a taste of these benefits first hand, which is why we have the lowest turnover rate for any executive suite in NYC and we typically run at 97% plus occupancy rates. But for the skeptical attorney coming in off the street, it is understandable how attorneys can have the perception that our selling is just trying to get a deal closed.
This all being said, we can tell you that when we price our offices we secret shop all our competition, including sublet office space in NYC law firms. We know that our prices are competitive with what’s out there, especially when you consider things like aesthetics (our office was the former NYC headquarters of an AMLAW 100 Firm, and it looks it) and services.
As with anything in life, you pay for what you get. We don’t have a problem renting offices, but sometimes it takes a bit of time to educate an attorney that there are reasons why a sublet office in a NYC law firm may be cheap.
Here are the top five things you should be afraid of with a cheap NYC law office sublet:
1. NYC firms that sublet extra office space frequently have financial problems.
If a law firm is willing to waste valuable billable time to sublease empty office space to other lawyers, there’s a good chance the firm is in a precarious financial position. Either they took on more space than they need and require the income to offset their rent, or they contracted their practice significantly, which resulted in empty office space.
Law firms price empty office below market because they need the income fast.
Things often get worse for firms in a bad financial predicament, not better. Before you move into a Manhattan law office sublet, you should do your due diligence about the sublessor firm.
Renting from a firm in financial peril is dangerous. One day, you may show up to the office ready to prep for trial, only to find a Sheriff’s eviction notice and very little time to find a new office.
2. Law firms don’t spend money to provide great service, which is why they can price offices cheaply.
An executive suite will typically have reliable high-end resources as it is a huge part of many shared office providers. Providing such resources requires the office to be managed by trained professionals which costs a pretty penny. Spreading this cost over multiple firms makes it feel like it’s less significant of an expense to have the resources that a shared office space provides.
Law firm sublets may be managed by an office manager or a managing partner, who often at times may be too busy to meet the needs of the office space. In an effort to save money, the firm may not have adequate staffing and because of that, they price well below market. You might save a few dollars, but your experience may be tainted by this mess.
The two complaints we hear about most often are reception and internet services.
Chances are in sublet office space your guests will be greeted by the sublessor’s receptionist. If that person is rude to your clients, dresses inappropriately or shows up to work drunk (and it is tolerated by the sublessor), your only recourse may be to move.
As for internet, it’s not uncommon for law firms to have insufficient bandwidth causing Internet to be painfully slow. Your only recourse may be to install your own Internet line at a substantial additional cost.
Being a landlord is a full-time gig. The law firm that offers a NYC law firm office space sublease must manage landlord responsibilities in addition to their full-time legal practice.
3. Landlords of sublet office space make up wacky rules (or have no rules at all).
One of the nice things about renting your own office directly from a commercial landlord is that you get to make up your own rules. And sublessor firms do just that.
Common sense rules often come into play with shared office spaces just like any firm that sets it own rules. These rules usually follow what is best for the industry and has an element of consistency when compared to other centers.
These rules help to keep the center a civilized place to work.
In a NYC law firm office space sublease, it’s not uncommon to have to deal with quirky rules set by the sublessor. Things we’ve seen, for example:
-You must have cherry wood furnishings purchased from Room and Board.
-The cost of paper is split between all lawyers whether you use the copy machine or not.
-You can use the conference room any time you want, unless your landlord’s firm needs it; then you’re on your own.
Quirky rules can be a common theme with shared office spaces. However, there can be the instance of no rules. No rules can make for a “unique” set-up such as odd or outlandish decorum, rambunctious neighbors, and so forth. It may reach a level of tackiness that is unbearable.
Some law firms know that they have odd rules, and are willing to price offices cheaply to entice someone into their wacky world.
4. The sublessor law firm has no intention of keeping you around.
A sublet office space that works out well is typically indicative of a successful firm. The downside of this is that the firm may have no interest in keeping you long term. As soon as the firm hires more people, you may be asked to leave so they can fill it with their people. This is not uncommon and put simply “it’s just business.” You may have received a deal, but there is no long-term outcome with that set up.
5. The master lease is up in the near term and they have no intention to renew.
Similar to item 4, above, often firms have very little time left on their lease and they have no intention to renew. Partners of disbanding firms may be on the hook for personal guarantees, so they are hanging on until the lease term ends. These firms need subtenants to stop the hemorrhaging of cash, so they price office cheaply to fill quickly. Of course, there may be a lot less time left on the master lease than you thought, leaving you in a lurch when it runs out.
Sublet office space can offer a solo law practice or small law firm with a proper office at a good value. That is, as long as you do your homework and understand exactly what you are getting yourself into.