It’s rare when conversations about real estate don’t focus on the financial crisis and toxic mortgages. But, today, our real estate debate is about a different type of risky asset—office space.
Shockingly, it’s no longer a given that businesses will have a physical office. Technology has opened up the professional world to more flexible work environments and hours.
A 2011 study by Telework Research Network found that working remotely increased 73 percent from 2005 to 2011 in the United States. And, in the field of law, numerous advertisements by firms seek telecommuting legal professionals.
Forget that stodgy nautical décor, and set sail for new horizons in law firm practice.
But before you jump on board, not all experts are so progressive about office space and flexible schedules. Brian Tannebaum in his article, “The Practice: Moving Offices,” for Above The Law, doesn’t understand this new virtual office trend..
“If you have an office, you spend a lot of time there. People visit, whether potential clients, actual clients, vendors, or solicitors,” Tannebaum points out. Working from home makes this impossible. Working from a cramped, un-presentable office space is perhaps worse.
“You may be a great estate planning lawyer in your city, but for those who don’t know that, when they see your crappy office that’s a mess and in a part of town that makes them hope their car will be there when they leave, that’s their first impression.”
First impressions are important—especially in law, which is essentially a service industry job. “Try thinking of the ‘office space’ as ‘marketing space,’” counters Tannebaum.
Renting an impressive-looking office space a way to attract new clients and entertain (and retain) old ones. Not only that, you’d be surprised, according to Tannebaum, how little a person truly saves by forgoing a formal space.
“Understand that being around different lawyers, in a different part of town, or having to spend less time in the car getting to the courthouse, are all things that can make you money. The increased rent is merely an investment, not an expense,” explains Tannebaum.
Layers who skimp on poor location, amenities, or décor may save in the short-term, but they will lose the long-term benefits of many spillover effects.
For example, “It’s not just that the aesthetics are better—that clients will be impressed with better floors, nicer elevators, or a bigger office—it’s that if you are in a better location, you have a better opportunity to build your practice because you are in an environment of like-minded people.”
Many lawyers who have started their own practice now operate in shared offices with other lawyers. When you have a quick question, it’s quick and convenient to pop down the hall. If you think a quick call or e-mail is just as easy, you’ve clearly never tried to phone a lawyer.
At least one company, Internet search provider Yahoo, agrees with Tannebaum’s assessment of the importance of physical offices. Recently, Yahoo announced it was ending its work-from-home policy.
Although the company publicly stated, “”This isn’t a broad industry view on working from home—this is about what is right for Yahoo right now,” the overwhelming response to Yahoo’s decision was a disapproving one (via CNN).
Soon, other company representatives chipped in. Richard Branson, founder of Virgin Group, quickly posted his opposition to Yahoo’s policy, voicing his opinion that a big part of successfully working with other people depends on, “trusting people to get their work done wherever they are, without supervision,” (via CNN).
In the end, what conclusions can we draw from this debate?
First, having an office space doesn’t exclude the possibility of telecommuting workers. In fact, firms can save money if lawyers share offices and come in to work on alternating days. This way, you keep the attractive office space, but scale down its overall cost.
Second, telecommuting and virtual offices are becoming less niche and more normative—even in the legal world. So, if you decide to revoke your policies surrounding work-from-home, be ready for a negative backlash.
Finally, if you don’t trust your employees to be productive at home, ask yourself, is this really going change if you force them in an office?