2012-12-31-莱坊-Asia_Pacific_Law_Firm_Review_2013_16页_2mb

ASIA-PACIFIC LAW FIRM REVIEW Summary (2013)

Core Content

This report provides an overview of the legal sector's real estate and workplace trends in the Asia-Pacific region, focusing on the expansion strategies of international law firms and their considerations for office location and layout.

Main Points

• Market Expansion: International law firms are expanding in the Asia-Pacific due to growing economic activity, regulatory changes, and new trade agreements that allow greater access to the market.
• Office Location Considerations:
  • Proximity to clients is the top priority.
  • Prestige is important for brand establishment and maintenance.
  • Cost is a significant factor, especially in high-rent cities like Hong Kong.
• Workplace Layout:
  • Most firms continue to use enclosed office layouts.
  • Open-plan offices are less common, with only one firm in the region adopting them.
  • Administrative and support staff are more likely to be in open-plan settings.
• Remote Working:
  • Mixed responses from firms; some discourage it due to the nature of legal work and the need for privacy.
  • Others are open to it, particularly for non-core legal functions.
• Space Utilisation:
  • Client-facing areas like meeting rooms and reception zones occupy a large portion of office space.
  • Some firms are exploring cost savings through more efficient use of space and off-site document storage.
• Cost Management:
  • Real estate costs are a major concern, especially in the context of profitability pressures.
  • Firms are increasingly looking at outsourcing and alternative work practices to reduce expenses.

Key Markets

Beijing

• Market Overview: Beijing is a regulatory and commercial hub for China, attracting international law firms due to its status as a business center and the presence of state institutions.
• Legal Trends:
  • Most foreign law firms are located in Grade-A buildings in the CBD and other key areas.
  • The city has seen a significant increase in Grade-A office rentals, with a slight decline in vacancy rates.
• Office Costs:
  • Grade-A office rentals in Beijing reached RMB396 per sq m per month in 2012.
  • The market is expected to remain a "landlords' market" in 2013 due to limited supply.

Shanghai

• Market Overview: Shanghai is the commercial and financial center of mainland China, known for capital markets, M&A, and IP law.
• Legal Trends:
  • Most foreign law firms are located in the CBD, particularly in Pudong's Lujiazui area.
  • The presence of international firms has grown in parallel with the high-grade office market.
• Office Costs:
  • Grade-A office rents in Shanghai are expected to soften in 2013-2014 due to abundant supply.
  • Non-CBD areas are becoming more attractive for cost management.

Hong Kong

• Market Overview: Hong Kong remains a key financial and legal hub in Asia, despite a subdued 2012.
• Legal Trends:
  • Firms are traditionally located in Central and Admiralty.
  • Despite weak global demand, there is no shift in location preferences.
• Office Costs:
  • Central office rents are expected to decrease by up to 5% in 2013.
  • Non-core areas like Kowloon East are expected to see a 10-15% rent increase.

Other Markets

• Kuala Lumpur:
  • The Legal Profession (Amendment) Act 2012 has allowed foreign law firms to establish offices, either as joint ventures or restricted standalone.
  • The city is aiming to become an international Islamic financial hub.
• Seoul:
  • Korea is a growing market for international law firms due to trade agreements and economic opportunities.
• Singapore:
  • Known for its transparent regulatory environment and ease of doing business.
  • Firms are adopting more progressive workplace strategies, including remote working and open-plan layouts.
• Sydney and Australia:
  • More open to decentralising office locations compared to other parts of Asia-Pacific.
  • Some progressive firms are exploring split office models with fee earners in CBD and support staff in fringe areas.
• Indonesia and Mongolia:
  • Seen as potential markets due to their resource-based economies and the opportunities in commodities-related legal work.

Workplace Strategy Highlights

• Cellular Layouts:
  • Predominant in the region due to the need for privacy and confidentiality.
  • Around half of the firms use dual-occupancy offices for junior lawyers.
• Remote Working:
  • Not widely adopted, though some firms are exploring it for non-core functions.
• Technology and Flexibility:
  • A few trailblazing firms are embracing technology to enhance productivity and flexibility in work practices.
• Cost Efficiency:
  • Firms are increasingly cost-conscious, focusing on real estate management and reducing operational costs through off-site storage and outsourcing.

Conclusion

International law firms in the Asia-Pacific region are expanding into key markets like China, Korea, and Singapore, driven by regulatory changes and economic opportunities. While proximity to clients and prestige remain the primary considerations, firms are also exploring cost-saving measures and more flexible work arrangements. The shift towards open-plan layouts and remote working is limited, with most firms maintaining traditional, enclosed office environments due to the nature of legal practice and the importance of confidentiality.