Dallas-Fort Worth a Top-Five Market for Legal Services Growth

CBRE Report shows law firm demand growing in markets like DFW with lower costs, strong business environments and deep talent pools

As the legal environment becomes more competitive, national law firms are expanding to markets like Dallas-Fort Worth that offer lower costs, strong business environments, and/or large, growing millennial populations, according to a new report from CBRE. 

Many national law firms entered the Dallas market over the past three years, including such firms as Winston & Strawn, Barnes & Thornburg and Kirkland & Ellis, and that trend has continued into 2018, demonstrating the strong business environment and established nature of the market.

“Never in my real estate career have I seen so many national law firms opening Dallas offices. It is simply unprecedented,” said Phil Puckett, Executive Vice President and leader of CBRE’s Law Firm Practice Group in Dallas.

With 4.1 percent growth in legal services employment from 2015-2017, DFW ranked as one of the top five markets for legal services growth, outpacing the national average of 1.5 percent. DFW’s lawyer employment growth of 3.5 percent also bested the 3 percent U.S. average.

With the number of lawyers and legal services employees growing, law firms are needing more space in the DFW office market. DFW expanded its law firm space year-over-year with 476,204 square feet of law firm space transactions recorded from Q3 2017 through Q2 2018. Of these transactions, 44.1 percent were expansions, 50.5 percent were stable and 5.5 percent were new to market. The market saw no contractions.

The Dallas CBD recorded 70.4 percent of the law firm space transactions and Uptown and the northern sector of downtown Dallas, including the Arts District, continue to be the popular submarkets for the legal community. 

Markets experiencing strong employment growth in the legal sector also boast excellent millennial demographics and are among the national leaders in categories such as millennial growth and concentration. From 2012 to 2017, the DFW millennial population grew 9.4 percent, compared to a national average of 3.8 percent. The millennial population growth is projected to grow another 9 percent by 2022, which will bolster the expanding legal services labor market. 

National Trends

Nationwide, the report finds that law firms are shifting recruitment strategies and expanding outside of traditional gateway cities to find new talent in lower-cost environments, often those with large, growing millennial populations. 

Other report findings include:

• More than one-third of AM 100 Law Firms expanded in the past year, accounting for half of the 1.6 million square feet of law firm space absorption in the U.S.   
• For lawyer employment growth, Atlanta leads the nation, expanding 16.3 percent since 2015, while Austin leads the nation in legal services employment growth at 11.3 percent in that same time period. 
• Six of the highest growth markets for legal sector employment (Austin, San Diego, Los Angeles, Orlando, San Francisco, Houston) are also among the top-10 markets for millennial concentration nationally, while six are among the top-10 markets for millennial growth (Austin, Orlando, Houston, Dallas/Ft. Worth, San Francisco, Phoenix).

“The expansion taking place is most often in lower cost markets, where large law firms are entering for business expansion and tapping into new talent at competitive price points,” said Jamie Georgas, Global Chair of CBRE’s Law Firm Practice Group. 

Read the entire report here: http://bit.ly/2MV98Cy