Office Space Primer For Lawyers, Part II: Leasing Traditional Space
In Part I of this series, we raised some cautionary financial considerations about one office space option: leasing traditional office space on your own. However, assuming that you’ve satisfactorily addressed those considerations, here are 3 key factors to consider when you’re ready to lease space on your own:
1. Scope out a good location. When leasing space on your own, location is paramount. It has a direct impact on your schedule, your personal life, your existing clients and potentially your ability to attract more clients. For example, litigators may find that an office close to the courthouse can both save huge amounts of time (which can translate into thousands of dollars of opportunity cost) and provide for all kinds of terrific business development opportunities. Being close to the place where your colleagues are routinely gathering can make it extremely convenient to do some old-school social networking – like meeting up for coffee or lunch. Having a home close to the action can also dramatically improve your own quality of life. Any litigator who has ever nervously sat in a huge traffic jam on the way to a hearing – or furiously hunted for a parking place after arriving – can attest to the real value of being in walking distance to the courthouse. Similarly, attorneys with a business focus might consider laying down some roots where accountants and financial planners roam. (Accountants can be amazing business referral sources and they often have two things in common: they travel in packs and they love a free lunch.)
Some “local” knowledge can also pay off. A personal friend with a very successful solo practice, serving mostly neighborhood clients, swears to me that having his office visible on the way to a very well-attended church has yielded many prospects. And – to borrow some Biblical terminology – those prospects begat others.
Specifics vary, but the general point holds across the board: don’t underestimate location.
2. Pay Attention To Details. This concept will be obvious and oversimplified to an attorney experienced with real property leases, but to others not so much. For folks new to leasing there can sometimes be a tendency to focus only on the perceived “big” points like price per square foot and term. However, there are a lot of other things that one needs to understand, negotiate, or consciously choose to not negotiate. Sometimes these terms are covered in the lease (which is usually provided by the landlord), but sometimes they’re not. It’s not just what’s in the lease that’s important, what isn’t there can be equally so. Here are just a few practical things to think about on that point:
- Improvements: Depending on how long your term is, the landlord may agree to make some improvements at her expense: new carpet and new paint are pretty common examples. Even if the landlord won’t pay for it, you need to understand what you are allowed to do on your own, what requires consent, and so forth. Don’t just assume consent will be automatic.
- Unique Financial Terms: Many landlords will request that you personally guarantee the lease. The existence, duration, and scope of these guarantees can often be negotiated. For instance, a personal guarantee may only be required for a portion of the lease term, or it may be limited to rent payments alone (as opposed to other tenant obligations). Make sure you’re absolutely clear on it. Similarly, make certain you clarify who is responsible for what with respect to the heat, A/C, and other structural issues – sometimes the tenant is responsible for minor repairs, filter upkeep, and so forth. Also, in many markets it’s now fairly customary for landlords to offer some “free rent” as an incentive to attract new tenants. Free rent usually comes with longer term commitments (3+ years or more), but the economics of each particular market are unique – it can’t hurt to ask.
- Important Logistics: Is parking an issue? Do you need to make sure you have a minimum number of spaces available during business hours? Does the space meet your needs with respect to electric, internet, phones, and so forth? (Many of these individual items we’ll hit in more detail in subsequent posts.) What about signage? Weekend/off-hours access? Security? Before you sign the lease, make certain you also do a walk-through and thoroughly inspect the property before your payment obligation starts.
3. Appearance Counts. It’s important that your office accurately portrays you, you personality and your practice, particularly if it’s a place where you will be frequently meeting with clients and colleagues. Make sure you include a budget for a modest amount of decorative and other miscellaneous work in your financial evaluation of the lease. It’s unlikely that the office will come in complete “practice ready” shape.
These days, the image of an opulent, luxurious office with huge conference rooms filled with $2,000 designer chairs isn’t necessarily the message of “powerful” and “successful” that it once was; rather, today it can easily communicate an impression of “out of touch.” That’s good news, because having that type of a pricey set up just isn’t necessary anymore. On the other hand, that’s not carte blanche to place zero value on appearance. It’s not going to inspire confidence in anyone to walk into their lawyer’s office and see stuff that’s old, mismatched, ratty, or uncomfortable. It’s also not going to be good for you, considering you may be spending an awful lot of time there.
There’s a massive gap between the extremes, a lot of room in the middle.
First, nice quality, stylish office furniture can be found inexpensively in all sorts of places these days. From office liquidation stores to consignment shops to Craigslist, there are plenty of options available, even on a shoestring budget. More than once in the past I’ve lucked out myself getting terrific (virtually new) stuff for free from companies close by who were moving or downsizing. It’s not entirely uncommon for the poor junior operations manager from the Peoria division of ACME corporation to get stuck with the job of getting rid of an office full of stuff while he’s still responsible for his normal day-to-day job tasks. Frequently he’s more than happy for you to just take stuff off his hands. Instead of him paying for someone to lug great stuff off to the trash heap – which happens more than you’d think – it’s a win-win waiting to happen. In fact, you might even consider donating a little of the money you would’ve spent to a charity or your local bar association – after, of course, you square up any sales/use tax issues with your accountant.
Next, get rid of clutter – particularly excess paper. Don’t have lots of paper laying around. It’s messy and it subtly conveys all kinds of wrong messages from “I’m completely disorganized” to “I’m really too busy for you.” Invest in a scanner and get all that paper scanned, organized, made web-accessible, secure, and regularly backed up in the cloud. Having paper all over the place is unnecessary, psychologically bad, and unreliable.
Lastly, be sensitive to the clients you’re serving. Leave the boring, generic office prints (the art equivalent to Muzac) in the garage. Instead, if you’re working with a lot of neighborhood folks, old pictures or relics about the area are usually easy to find, inexpensive, and convey a sense of community. If you’re working with a lot of technology clients, old computers, devices, or fun gadgets for the office are cheap and become great conversation pieces. Better to leave the framed “Who’s Who” listing that you bought for a few hundred bucks in 1998 at home. However, personal photos and gifts from clients can be well-received by visitors, and your nicely framed diploma and license are always appropriate – most folks like to see your credentials.
Make your space personal, professional, organized, and welcoming to your visitors. It’s not an expensive endeavor, but it does take some budget and some thought, and it’s worth it.
In Part III we’ll take a quick look at another aspect of traditional leasing: sharing space with other professionals.