Standard lease agreements can be ridiculously expensive, meaning a shared Downtown Manhattan office might be a better option.
Getting your own office for your firm is a huge accomplishment. You can have eccentric office decorations or they may even want an office cat to roam the site. It doesn’t matter because that is your space to have free reign.
That is, of course, if your firm is willing and able to pay for the privilege.
A standard commercial lease is both a financial and emotional commitment. Pricing for space varies based on the metro area you are located in. Cities like Chicago, New York City, and San Francisco, pay the highest of costs.
Plus you have to worry about maintaining the space. Electricity, commercial grade internet, office equipment, and even the pens we use to write our checks are necessary for the office to function properly.
Regardless of how many people work in your office, the bill from the provider will be the same whether it is three or 30 people.
A shared downtown Manhattan office may be more viable for smaller firms.
As a solo or small firm lawyer, you have to always keep one eye on your expenses.
In a shared office space costs are fixed and are spread out over several tenants. Making it a safer and less expensive option for firms with lower budgets.
Using a shared office space is also a good plan for long-term growth. We’ve seen a number of law firms grow from a one-man army to 8-person + firms. Fairly consistently, we’ve seen that a firm grows to a certain point where their own lease office space may better fit their needs than in our shared office space.
Some firms end up staying even as they grow because the hassles of keeping an office running are taken care of by someone else. Costs to do so are also much lower than if the firm had their own space.
When should you lease your own office space?
If you have four or more lawyers and one administrative assistant then you should consider a standard commercial lease. The revenue your bringing in will constitute the larger space and larger expense.
In terms of managing the office, the administrative assistant can handle the most of the duties necessary for running a small firm, minimizing lost billable time.
But even after adding staff to your firm, it’s generally less expensive to used shared office space or an executive suite. Having said that, leasing directly from the landlord often means you can rent more space.
A major problem with leased office space
When your firm grows it means you are doing well. The more employees you have, the more value you get out of the space.
Your costs are looked at per attorney and in a small office, therefore it’s important to minimize costs.
In addition to cost, four-lawyer/one admin firms should really consider whether or not they want to deal with with the stresses of managing an office space. Sometimes it may be a more viable option to continue renting from a shared office space because it allows the attorney to focus on practicing law.
An additional caveat about firm size
Depending on the size of your firm, it may not be feasible to even lease the space with just four attorneys. There may not be any adequate spaces available at that time or in your price range. Downtown Manhattan typically has more spaces but if you take a train up into Midtown Manhattan then things are only going to get more expensive and smaller. This means a move to Midtown may need at least twice as many attorneys to justify that decision. Just some food for thought if you’re thinking of moving into a Midtown location.
