How To Compete In A Global Market

Transcription

1 Global Corporate Solutions: The Legal Sector Summer 2013

2 Introduction The challenging global market economy is impacting the legal sector causing a downward pressure on fees increasing competition. From the global heavyweight to the local boutique firm, a review evolution of strategy working practice is required if firms are to compete in this changing market. This state of flux has led to a series of contradictions In the real estate requirements of law firms. Finding a balance between retaining the traditional roots of a legal firm while keeping up with modern trends, new technology innovation can be problematic. Real estate plays a key role in facilitating these changes. Any firm which gets it right in terms global footprint, micro-location space planning has a competitive edge. It is essential to utilize assets to their maximum ability, keep overheads low occupy space as effectively efficiently as possible. US law firms trail behind other countries space planning efficiency, occupying an average of 750 sf (70 sq m) per lawyer. Collaboration between staff, both nationally internationally, is increasingly important. This requires finding means tools to allow staff the opportunity to share ideas, co-operate communicate successfully. Conversely, retaining a productive working environment meeting client confidentiality requirements remains essential. It is clear that firms need to stay nimble adapt. Innovation, new technology, a global outlook new approaches to service should be embraced if a law firm is to survive in the modern age. This document seeks to identify the key challenges of the sector, the trends which have arisen to address those challenges how these impact real estate requirements. 2

3 Challenges Global Economy The persistent economic downturn is is set set to to continue into into has has slowed slowed growth growth in the in the law law firm firm sector sector over over the past the five past years. This five years. climate This has climate been the has catalyst been the for catalyst many of for the many challenges of the challenges below, resultant below, trends resultant trends the need for the change need for in the change legal in sector. the legal sector. Competition Increasing competition caused by by clients clients trying trying to to keep keep costs costs low low reduce reduce their their need need for legal for legal services services alongside alongside firms firms growing their growing services their services provision provision has led to has an led increasing to an increasing requirement requirement for firms to for st firms out to st from out the from rest. the rest. Cost The The current current economy, economy, fierce fierce competition competition increasing increasing client client expectation expectation has has meant meant that that it it is is increasingly increasingly important important to to ensure ensure profitability profitability keep keep overheads overheads low. low. Recruitment Finding, attracting retaining the best talent, is is crucial. crucial. Br Br perception, location location staff staff well-being well-being are are the the key key to to meeting meeting this challenge. this challenge. Technology The law is steeped in tradition does not naturally align itself with modern trends, new technology social media. Change within the industry is is often met with a a level level of of scepticism the the challenge is is in bringing bringing the the sector sector up up to to date date with with the the 21st 21st Century while century maintaining while maintaining the conventions the conventions of the legal of the sector. legal sector. Service Studies Studies show show that that clients clients increasingly increasingly value value problem problem solving solving ability ability over over technical technical excellence. excellence. Finding Finding ways ways to demonstrate to demonstrate excellence excellence added value added will be value the challenge will be the in challenge retaining in future retaining clients. clients in the future. 3

4 Trends Going Global Law firms are increasingly looking beyond their traditional markets for global opportunities reflecting their client business. Expansion Law firms are into increasingly Africa, Asia, looking Latin beyond America their traditional Eastern Europe markets is for a great global way opportunities to capitalize reflecting on new their markets. client business. There are Expansion risk into cost Africa, involved Asia, Latin in this America type of expansion; Eastern however, Europe is it a allows great firms way to to capitalize diversify on new take markets. advantage There of their are risk current cost client involved base in in new this type locations. of expansion; however, it allows firms to diversify take advantage of their current client base in new locations. Outsourcing Firms are continuing to to seek a reduction in in overheads by moving non-core services to to near-shore off-shore locations. Mergers Acquisitions According to BDO, more than one third of the top 100 law firms are expected to merge over the next three years. M&A can bring According to BDO, more than one third of the top 100 law firms are expected to merge over the next three years. M&A can bring a competitive advantage, create or enhance the service offering. It can also allow a firm to tap into new markets, cross-selling competitive advantage, create or enhance the service offering. It can also allow a firm to tap into new markets, cross-selling opportunities generating cost savings. opportunities generating cost savings. Social Media Technology Firms are beginning to to utilize the the opportunities presented presented by by social social media media online online networks. networks. Firms Firms appreciate appreciate that that working working practices are also beginning to to change change with with an an increased increased emphasis emphasis on on flexible flexible working working further further investment investment into into supporting supporting technological infrastructure. This This can can improve staff staff mobility even even well-being. Bring Workspace With With ever ever increasing increasing competition competition firms firms exping exping overseas, overseas, sting sting out out from from the the crowd crowd is is more more important important than than ever. ever. Firms Firms have have been been seen seen to take to a take more a more personal personal approach approach to bring. to bring. Law firms are seeking lower cost, greater efficiency, flexibility, collaboration improved quality while maintaining privacy Law firms are seeking lower cost, greater efficiency, flexibility, collaboration improved quality while maintaining privacy confidentiality requirements. Studies show that the latest generation of workers want a flexible work environment we confidentiality requirements. Studies show that the latest generation of workers want a flexible work environment we are likely to are likely to see an increase in activity based working (hot-desking / hotelling) solution, providing unassigned seating, which is see an increase in activity based working (hot-desking / hotelling) solution, providing unassigned seating, which is reserved by staff reserved by staff when required. Firms based in Australia Holl have already embraced this trend while those when required. Firms based in Australia Holl have already embraced this trend while those in America lag behind. in America lag behind. Pricing With clients seeking more of problem solving service, there may be be an an opportunity to to develop alternative working models reevaluate fee fee structures, a a potential move move away away from from the the traditional hourly hourly fee. re-evaluate fee. 4

5 Distilling the Real Estate Requirements of Today s Law Firm Global Footprint Bring Technology Value Privacy Traditional Professional Consistency Privacy Micro Location Hotelling Cost Reduction Collaboration Innovation Inspirational Flexibility Transparency Multi-Purpose The real estate challenge for law firms is understing fulfilling a wide spectrum of space requirements. Retaining confidentiality, privacy quality can seemingly contradict collaboration, multi-purpose space cost reduction. Such a brief requires innovative thinking, new design ideas a willingness to effect change in creating space which meets all of the above criteria enables the business to retain its traditional roots while embracing modern working practices. 5

6 How We Can Help We cannot control the global market economy, however, we can provide your firm with a competitive edge through refining your real estate portfolio ensuring that your space is both cost effective aligned with your business needs culture. We can enable savings creation through a review of your portfolio, ensuring that your leases are negotiated to the best possible level, your rent statements audited for over charges. We can provide locational strategy advice in order to recruit retain the best possible staff we can advise on how to align your portfolio workspace with a brief befitting a 21st century law firm. A truly independent service. We only represent tenants. No selling. No hidden agendas. No conflicts of interest. First foremost we are advisors. We provide a full suite of portfolio audit services, ensuring that your portfolio works for the business. This includes delivering strategic initiatives to unlock value, comprehensive reviews of the portfolio to identify risks, opportunities. A single point of contact for all real estate requirements on a global or regional scale. We deliver a bespoke consistently excellent service in every location. Independent Advisors Strategy Specialists Portfolio Optimisation Transaction Management By Our Team Account Management Create strategies, aligned to your business plan, to future-proof your portfolio. This includes an assessment of market trends their implications on real estate, identification of upcoming key events opportunities to leverage financial non-financial benefits. Project oversight, management of financial analysis transaction delivery, ensuring the best possible deal is achieved in every location. This can be undertaken by our team directly or where required, we will seek the best in class local service provider to combine local market intelligence with our deep understing of your requirements. 6

7 Corporate Accommodation Planning & Strategy - The Process Review Strategic Advice Action Discover Analysis Evaluation Initial Strategy Planning Report Review Implementation Confirm objectives, requirements expectations. Data collection. Review premises information. Review lease documentation to determine key lease terms critical lease dates (including guarantee obligations, option exercise notice dates, rent reviews, notice periods associated with any growth, contraction or termination, etc). Current head count figures, number of work-points growth projections as assessed for each location. Identification of business objectives cultural needs. Key business stakeholder s views in Q&A sessions to underst any occupancy concerns, growth factors business strategy. Review of occupancy stards. Understing business head count growth to assess occupancy thresholds during the length of tenure. Assessing the commerciality of existing commitments market conditions relative to the location Undertaking an overall risk assessment of the premises, particularly the key commercial terms future challenges. Identifying opportunities establishing decision timelines, taking into account the critical lease dates market cycles. Benchmarking comparison of key premises metrics. Short, medium long term strategy overview. Alignment of property plan with overall business strategy. Outline of key findings. Highlight opportunities for cost savings. Timeframe for pro-active management including key action points next steps. Foundation of premises strategies. Workshop presentation to senior management to discuss the key findings. Report in a dash-board style. Graphs heat map amber, green). Active program of review. Regular review/reporting schedule established (monthly/quarterly/ bi-annually). Implementation of key actions/deliverables. Additional strategies for specifc premises projects. Transaction management oversight. Operating cost reviews. Workplace review development. Ad hoc projects advice. 7

8 About the Pepper Ecker Alliance In 2013, Howard Ecker + Company Pepper Property formalized a long sting alliance. This global partnership allows us to service our client s corporate real estate needs globally through a network of experienced on the ground executives in Australia, Asia, the United Kingdom, Irel, Spain North America. Our independence expertise allows us to provide reliable guidance that reflects your interests exclusively. We believe in bespoke solutions that provide immediate long term returns. We instil a corporate culture that promotes innovation accountability. Our goal as strategic advisor is to ensure our clients are equipped with the knowledge to make decisions with confidence. Providing innovative solutions for businesses that are: Investigating how to best reduce overhead costs Renewing or signing a lease agreement Growing or contracting Reorganising their workspaces Experiencing problems with their current location Restructuring their real estate portfolio Financing real estate workspaces Divesting both core non-core real estate About Howard Ecker + Company Howard Ecker + Company is a tenant representation company brokerage firm that represents the commercial real estate interests of tenants throughout the United States. We help tenants locate, negotiate evaluate all possibilities in their search for office space. We maintain a clear focus on a client s needs, coupled with a sound understing of practical real estate issues their economic implications. Our goal is to align office location thinking practices with the long-term fiscal cultural needs of a business...moving beyond valuing square feet, to realizing the greater holistic value of office environments business strategies. About Pepper Property Established in 1991, Pepper Property offers a global, integrated approach to real estate solutions for corporations, investors developers. We are part of the Pepper Group, a diversified global financial services business with specialized experience in lending advisory. Pepper Property offers experienced, independent advice in tenant representation, capital raising, divestments acquisitions. 8

9 Meet our Global Team Howard Ecker Chicago, US CEO - Howard Ecker + Company Pamela Parasugo New York, US COO - Howard Ecker + Company Greg Smith Sydney, Australia Executive Director - Pepper Property David Burton Sydney, Australia Global Head of CRES- Pepper Property Edwin Tong Singapore Associate Director- Pepper Property Krystyna Grzesik London, UK Senior Manager- Pepper Property 9

10 Contact Details Howard Ecker + Company Chicago Address 35 East Wacker Drive, Suite 3400 Chicago Illinois Phone Web Howard Ecker + Company New York Address 1 East 53 rd Street New York, New York Phone Howard Ecker + Company Denver Address 1830 Blake Street Denver, Colorado Phone Pepper Property Sydney Address Level 7, Chifley Tower, 2 Chifley Square Sydney NSW 2000 Phone Howard Ecker + Company Miami Address 701 Brickell Avenue Miami, Florida Phone Pepper Property London Address 4th Floor, 30 Charles II Street London SW1Y 4AE Phone Pepper Property Singapore Address #21-07 International Plaza, 10 Anson Road Singapore Phone

11 Our Track Record 19,000 sq ft office lease in downtown Miami Provision of strategic advice to accomodate business forecasts providing a clear understing of property issues Lease negotiations in various locations under a coordinated approach 14,000 sq m Strategy Advisor Tenant Representative for a premises relocation Sydney, Melbourne, Perth transactions, Brisbane rent review & national strategy National representation including 100,000 sq ft in Chicago, New York Orange County CA Strategic advisor tenant representative for Sydney, Melbourne Perth 21,000 sq ft office lease in downtown Miami Strategic advisory tenant representation for 6,000 sq m premises requirement Rent Review 125 King Street, Sydney * 44 Martin Place, Sydney 13,000 sq ft office lease in downtown Chicago Sydney premises renewal (8,000 sq m) Melbourne premises relocation (4,500 sq m) 11

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