- within Wealth Management and Compliance topic(s)
- with Senior Company Executives, HR and Inhouse Counsel
- with readers working within the Consumer Industries and Technology industries
After several years of cautious decision‑making, the legal sector's relationship with real estate may be shifting once more. Supported by recent market intelligence, and our own client experience, it is clear that law firms are not simply returning to the office market, but doing so with renewed clarity, sharper priorities and a far more strategic view of what their space needs to deliver.
Crucially, this is not a simple return to pre‑pandemic working patterns. Instead, it reflects a sector preparing for growth, while addressing hiring challenges and technological change head on, and recognising that real estate remains a critical enabler of all three.
Growth ambitions are firmly back on the agenda
Senior leaders across the legal sector are once again signalling strong growth intent. Looking ahead, most firms plan to grow in their home regions, while 45% of senior leaders at top UK law firms say they will be building strength across international borders.1
This expansionary mindset is being matched by continued investment in technology. Firms are planning to increase IT investment compared to 2024, with cyber risk now ranking as an organisational challenge for 59% of firms, regardless of size. These priorities are directly influencing real estate decisions, as firms seek space that can support secure IT infrastructure, collaboration as well as future expansion.
Take up figures show renewed confidence – and growing scale
The strength of legal sector demand is clearly reflected in recent take‑up data. In London, Q4 2025 saw legal sector take‑up surge by 74.97% quarter‑on‑quarter to 276,728 sq ft, driven largely by major US mandates.2
Across the whole of 2025, law firms acquired 828,450 sq ft of space in London, representing a 13.34% increase compared to the previous year. By year‑end, demand had reached 1.67 million sq ft, with large‑scale requirements increasingly shaping the development pipeline.3
Notably, Knight Frank report that 50% of active legal sector requirements are now for spaces exceeding 150,000 sq ft, underlining the scale at which many firms are now planning.
Consolidation and private equity are reshaping real estate strategies
Consolidation and external investment are also re-emerging as a key issue. Private equity backing several legal sector deals signals renewed "expansion momentum" and puts increasing pressure on firms that do not scale or differentiate.
This has clear implications for office strategy. M&A activity and private investment often accelerate real estate decision‑making, driving demand for space that can support growth, integration and brand positioning. In this context, the office becomes a visible signal of confidence, resilience and long‑term intent.
The impact of technology on office decision making
Generative AI adoption has accelerated rapidly across the legal sector. Many firms have moved from experimentation to deployment at scale, rolling out external AI tools firmwide rather than in isolated teams.
Importantly, early evidence suggests this technological shift has not yet had an impact on trainee or junior hiring. Instead, it is reshaping how teams work together, placing greater emphasis on collaboration, training and knowledge sharing. As a result, offices are evolving to support higher‑value activity, underpinned by secure, resilient digital infrastructure.
Premium, best in class space continues to prevail
While demand has increased, it has also become more selective. Most firms continue to prioritise quality over compromise. New or refurbished buildings accounted for 83.27% of the legal sector's total take‑up in 2025, reinforcing the clear preference for best‑in‑class accommodation.
Location remains equally critical. Within the London office market, the City Core accounted for 52% of total legal sector deals in 2025 and nearly 70% of total take‑up, maintaining its position as the preferred submarket.
The main leasing transactions reported during the year were either extensively refurbished or second‑hand Grade A assets, further reinforcing the argument that quality, flexibility and longevity now outweigh short‑term cost considerations.
ESG credentials are now non‑negotiable
Environmental performance has become a baseline expectation rather than a differentiator. Law firms are placing substantial emphasis on the environmental credentials of buildings, particularly carbon performance.
Assets with strong sustainability accreditations and certifications are increasingly favoured, as firms seek to align their real estate strategies with wider ESG commitments and client expectations. This focus also reflects a desire to future‑proof portfolios against regulatory change and long‑term operational risk.
Amenities, wellbeing and experience matter more than ever
Beyond sustainability, occupiers are prioritising buildings that offer a broader range of amenities. Gyms, on‑site cafés, high‑quality external spaces and strong wellness provision are now common features of preferred assets.
These elements support productivity and wellbeing, but they also play an important role in talent attraction and retention at a time when firms continue to face talent constraints and pricing pressures.
A more intentional approach to office space
Taken together, these trends point to a clear conclusion: law firms are not retreating from offices, they are being far more intentional about them.
Real estate is now firmly aligned with wider business strategy, from growth and consolidation through to technology investment, cyber resilience and ESG priorities. As demand continues to focus on high‑quality, well‑located and sustainable assets, the gap between best‑in‑class space and the rest of the market — and the rental premium attached to it — is set to widen further.
For law firms planning their next move, the office is no longer simply a place to work. It is a strategic platform that supports growth, resilience and long‑term performance.
Footnotes
1. Briefing/HSBC UK law firm strategy 25-26
2. Knight Frank - London Legal Sector Update Q4 2025
3. Knight Frank - London Legal Sector Update Q4 2025
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
