Globally, the majority of the legal sector is maintaining the same or equivalent square footage when renewing their leases or relocating. Just under a quarter are increasing space, and approximately a third are consolidating to smaller footprints. 40% of firms in EMEA expanded office space in the first half of the year, with the picture in the US and in Asia Pacific more nuanced as some practices continue to right-size and adjust their real estate portfolios.
International firms that expanded into China in recent years continue to re-evaluate their physical presence in the region. Many firms have announced office closures this year, while others, typically those with a long-standing presence in the region, have renewed space at equivalent or smaller square footage in H1 2024. Concerns for global legal occupiers include a prolonged capital market downturn in China, shifting business environment, ongoing geopolitical tensions, and increasing competition for work from government-preferred Chinese law firms. At the same time, leading domestic practices have been in expansion mode, taking advantage of the opportunity to grow market share as their international counterparts decrease presence in the region.
Across a number of EMEA locations, global firms are in expansion mode. In Dubai, nearly all deals in H1 2024 expanded floor plates. In mainland Europe, global firms are expanding in Brussels and Paris. These cities host important national and international political centres, such as the EU headquarters, which create a clustering effect of top legal practices. Some firms also anticipate an uptick in European M&A opportunity.
Large American and global law firms, typically the largest and most profitable in the world, continue to increase their dominant share of London’s legal market. This trend has already redrawn the London legal market, with US firms now making up the dominant share of law firms in the UK’s capital.
China’s “red circle” continue to increase expansion efforts in European markets, mainly serving China-based clients and working for fees that are materially lower than those of western rivals. In the first half of 2024, one leading Chinese firm opened a new office in Madrid, whilst another is rumoured to be opening an office in London.
As Japan further opens up its legal market, with a simplification of the registration process for foreign lawyers introduced by the Japanese Ministry of Justice on 31 July 2024, it is anticipated that more international practices will expand in this region.
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