1. Location, Location, Location.... Technology’s Effect
(This futuristic article was written in 1995, prior to one of San Francisco’s largest firm’s startling announcement of its
upcoming move to...South of Market Street. Why would they be so bold?!)
August, 2000
Hugh B. Bright, Managing Partner of Nomincin & Forgettin, one of California's largest law
firms, put it this way: quot;We had been under pressure from several fronts. Our partners were
looking to the management of the firm to create policies and execute strategies to boost
partner profits. We wanted and needed to maintain and nurture the culture which had
helped us to attract the most successful attorneys in their respective practice areas. In a
competitive environment our clients were expecting us to be more aggressive than ever at
reducing our fees and capping reimbursables. We had a mandate to offer leading edge,
client-friendly technology, at great and ongoing expense. Partners were expected to be
accountable for the business they managed and clients were demanding senior-level-only
attention. We were a spawning ground for competitors seeking lateral hires, offering
economic incentives theretofore unheard of in our industry. To make matters worse, our
real estate advisors indicated that market rents for comparable space were firming up.
In addressing our new office lease, we took on the majority of these issues:
1. Location. Under all the pressure, we came to grips with the usual questions about
location. We concluded that paying a premium of $5-$8 per square foot per year for
great view space was an enormous waste of resources. We didn't need to be in the
most popular building in the city; our clients rarely came to our offices since we
linked up on videotel. We began to think of quot;locationquot; as a quot;domainquot;, a meeting
quot;placequot; of resources---attorneys, clients and on-line services---to conduct their
business.
2. FlexSpace. We envisioned an opportunity to achieve greater efficiency at lower
cost---lower quot;fixedquot; costs. Most law firms operated under the assumption that 600
square feet per attorney was reasonable. Office rent once accounted for 8-10% of
our revenues. Today these ratios have been halved. Technological advances
confounded most of us. On our initial move from our last lease, we reduced from
225,000 square feet to 175,000, and maintained the right to terminate several of our
25,000 square foot floors at regular intervals. Now five years into our new lease we
have reduced space to 100,000 square feet, yet productivity---and profits---are
soaring.
3. Branding. At one time we felt it important to devote a significant portion of partner
capital to create a sense of quot;homequot; within our premises. Now we realize that not only
can we not afford such frivolity, such an investment in real estate would run contrary
to our long term master plan to support telecommunication efforts throughout our
firm's quot;domainquot;. Our firm quot;culturequot; thrives within our staff, yet is not reflected or
invested in space which we will be all too happy to return to the landlord.
2. 4. quot;Secretariesquot;. We have none. Like the on-line multimedia library, it has taken some
time and effort to train attorneys to the ways of the latest technology. Our old
conventional library is rarely used. We are fully automated, including voice-activation
networking. Attorneys and paralegals create, save and file all documentation. We no
longer devote resources to central filing, secretarial filing, off-site filing or express
mail.
5. CyberCity. Like most national firms, we once chose locations for branch offices
which would serve our clients. Our quot;virtualquot; location is now global. We quot;visitquot; clients
or prospects regularly through our real-time Web location or through our
management software network, where we simultaneously create documents, video-
conference or broadcast a custom multimedia presentation to a secured site. Next
year we are expecting to add holographic capabilities to our network so that we will
actually quot;bequot; with our clients.
6. The Pentium. Not long ago---a few chips ago, to be more precise---the world could
hardly fathom the speed or agility of the Pentium chip. Capacity is now twenty-five
times greater, at comparable capital contribution. Office automation will further
develop and we are committed to being the first to adopt new platforms. Technology
has helped to bring greater profit to the bottom line and relieved us of a substantial
economic commitment to real estate.quot;
August, 1995 publication: The Daily Journal/California Real Estate Journal
Any reference drawn to Morrison & Foerster is purely unintentional.