Finding Office Space You Can Live With

by Terri Olson

One of the most important questions the new practitioner needs to answer is: where and how will I get office space? Unless you are in a very small town with only one or two options, you may be bewildered by the sheer number of places available, in different locations, with different arrangements and rates. The following are some of the most common ways of securing space for your law practice, with a summary of some of chief advantages and disadvantages.

Renting on your own. If you have previously established a significant client base that you know you can take with you, and have a capacity for risk that matches your need for independence, you may want to walk into a separate office, whether it's in a downtown high-rise, suburban house, or storefront location, and rent it yourself. Let's get the main disadvantages out of the way first. This is undoubtedly the most expensive way to proceed, and it also generally commits you to the most in terms of sole responsibility for at least a year's worth of rent and perhaps utilities. In addition, you will be responsible for your own library, equipment, and staff, which can cost as much as or more than your total rent. You may also have to sign a much longer lease than you would have to were you to share space or rent a small office in an executive suite, which may be a problem if you suddenly need to relocate.

The advantages are that you can secure the highest-profile, most desirable and spacious rental locations in this way -- a plus if you feel that you need to present a certain image to your potential clients -- and you have by far the most control over your surroundings. You can pick a hot renovation property or a sleek high-rise, get a lot or a little equipment, of the brands and models you want, and select your own staff. If you must proceed in this fashion, however, use good judgment and don't put yourself in debt over these highly speculative potential advantages. If you don't have cash on hand to pay for half a year's worth of rent, look at the options below.

Subleasing space in an existing office. There are many advantages to subletting extra space from an existing law firm. A law firm with an extra room will often not bother to try to get the market rate for the square footage. You will generally have access to facilities such as their library, conference room, fax machine, and copy machine, and perhaps even part-time use of a receptionist or secretary. If you and the other lawyers are "simpatico", you may have a willing ear for your troubles and questions about practicing law. And an established firm may have many marginal or less interesting cases they would be willing to refer to a younger lawyer who needed the experience.

There are disadvantages. Sometimes a "room to rent" is just that -- a room, and if you try to use the client conference rooms more than twice a year tempers will flare. Because you are in such proximity to each other, it's as important to have a good personality match as it would be if you were employed by the firm. And also because you are so close, clients may assume that you are an employee or partner of the firm -- you will have to take extra care to show that that is not the case.

Executive suites. Many new attorneys take the route of leasing space in a suite of offices designed for service professionals. The rents range from low to reasonable, and the facilities may be excellent. A receptionist is sometimes included, and fax and copy machine use often is. Some suites try to attract lawyers by offering a complete law library in the building. These suites can also be a comfortable, friendly, place to work, since you are generally surrounded by people in quite similar circumstances to yours, with similar experience levels.

Although this may sound ideal, there are some drawbacks as well. One of the chief advantages -- working with others in like situations -- is one of the primary disadvantages as well. Other starving new practitioners may have no cases to refer to you -- they need everything they can get! They may also have no more experience than you, and be less valuable as a source of information, advice, and contacts. Ironically, it's possible to feel a great deal of professional isolation in these circumstances! Bear in mind, as well, that facilities differ considerably: never take an office sight unseen. Some suites are tastefully furnished and well equipped and staffed; others may have cheap, run-down furniture and incompetent receptionists (since you didn't hire the staff, you can't fire them either). Ask for references from other lawyers in the building.

You can also sometimes negotiate part-time use of a suite or of conference room facilities. This is useful if you'll be working primarily from your home, but need an occasional "formal" location for meetings. There are both logistical and ethical issues that can arise with this setup, however: be careful that you know exactly what you are allowed to use and at what times, and be very careful that your clients know that you are not a full-time office resident at this location and that you are not a member of the firm with whom you are sharing part-time space.

Lease considerations. Bearing in mind that it would be easy to write an entire article on this subject alone, here are some things you may want to think about before you sign on the dotted line.

What is the term of the lease? If your new firm is a highly speculative venture for you, or if you feel you may be expanding in the near future, you may not want to agree to a lease of more than six months to a year, even if you are offered a reduction in rent as part of the agreement. If you are new to the practice of law, you may realize within a few months that the majority of your clients are coming from a particular area of town, and want to relocate there.

What improvements might the landlord make to "sweeten the deal" if you agree to lease long-term? Rent reduction, wiring improvements (great if you're going to network), new carpeting, painting, and other facilities enhancements may all be negotiable. Work out the best deal you can.

What is included in the rent? Your life will be much less complicated if you can write out one check per month instead of separate payments for rent, electricity, water, sewer, janitorial, etc. On the other hand, you may bear more than your fair share in a utilities-included lease if you tend to be frugal in those areas. (In any case, remember to budget for maid/janitor service, and lawn service if you're in a detached or semi-detached building.)

Avoid the "space for services" arrangement. The firm you're renting from may see this as a big plus -- they don't have the extra income to report -- but the I.R.S. may take a dim view of the situation. You will also have a less sanguine feeling once you realize you have no rent expenses to deduct -- just the time you're losing providing legal work for them. Your ethical obligations can also run smack into your need to eat: what if you agree to ten hours of work a week, but you realize you can't provide the client with the service he or she needs in that amount of time? Do you work for free, and get further in the hole, or do you write off the client after ten hours have elapsed? If at all possible, pay actual rent instead of bartering your time.

Terri Olson is the former Director of the Law Practice Management Program