D’Arcy & Deacon LLP is moving on up.
The Winnipeg-based law firm has inked a deal to relocate its 42 lawyers to two floors of the Richardson Building, one of three signature towers at the heart of the city’s downtown at Portage Avenue and Main Street.
Moving to the same intersection that most of the city’s major law firms, including Aikins MacAulay & Thorvaldson LLP, Pitblado LLP, Fillmore Riley LLP and Thompson Dorfman Sweatman LLP, call home was a must not only from an optics point of view but for space as well, says Grant Stefanson, one of D’Arcy & Deacon’s three managing partners.
'All of the larger firms are also located in the vicinity. We decided very clearly and early on that we certainly weren’t interested in anything outside of downtown,' he says.
'Our growth in the number of lawyers at our firm and in our client base are two of the primary reasons for the move. We’ve been on St. Mary Avenue (about one kilometre away) since 1983 when we had 15 lawyers. Now we have approximately 120 employees.'
The firm has several practice areas that have been going gangbusters the last several years in particular, including civil litigation, First Nations law, municipal law, labour employment law and corporate commercial law.
Now, with nearly two entire floors and options on further space, the firm can continue to grow without having its lawyers bumping elbows with each other.
Stefanson says there’s no question the new address represents an improvement in the firm’s status as it’s moving up the ladder from B or B-plus space to an A class building. He says the firm is currently working with a designer, architects and engineers to come up with leasehold improvements that will help define the firm in the marketplace prior to moving in later this year. The improvements include walls that can moved around depending on the size of meeting that needs to be held and the latest in technology.
'Your space is going to have a personality. We’re trying to match up our firm’s culture to the way the space is going to look,' he says, adding the new location will also give the firm an enhanced platform from which to attract both new work and clients.
But just because the firm is going upscale doesn’t mean it’s going to abandon its mom-and-pop clients.
'That’s the trick,' Stefanson says. 'Designing your space in a way that accommodates everybody. That’s why when you design a space you try to match the firm’s culture up with it. Hopefully there’s something there for everyone, including your current client base and your anticipated client base.'
Stefanson says moving to the suburbs was never an option because D’Arcy & Deacon is involved in business with other law firms and its lawyers are constantly appearing in the provincial court, the Court of Queen’s Bench, the Court of Appeal and a federal court, all of which are located downtown.
Establishing a presence in the heart of a city is a crucial strategy for any law firm that wants to be a serious player in the corporate law game, says Dagmar Scott, national director of facilities at McMillan LLP. She says its long-term plans are to relocate its new Calgary office — which it acquired when it purchased Thackray Burgess in the spring of 2009 — from the outskirts of downtown to the city’s financial district, matching the surroundings of its Toronto and Montreal offices.
'A lot of it has to do with the proximity to our clients and the proximity to the courts. We still transact a lot of business in courts and a lot of our corporate clients are in the downtown core,' he says.
A central location is also a key element for McMillan’s employees, particularly in Toronto, where many are commuters coming from outside the Greater Toronto Area.
'We’re accessible by all the public transit routes. We’re across the street from Union Station and that’s where all the transit routes come from the east, west or north. They all bring you practically to our door. That’s a huge advantage for our staff as well,' he says, noting that even though the lease rates are considerably higher downtown, they’re factored into billing rates.
Torys LLP in Toronto feels much the same way. Stuart Wood, the firm’s chief marketing officer, says even though most documents now travel electronically, it’s still important to be located physically close to clients.
'We want to make it easy for them to work with us, to have meetings when necessary and to attend seminars and other events. Many of our clients are downtown and connected to the underground walkway, which makes things easier in the winter. Clients aren’t as concentrated downtown as they used to be but our location keeps us close to those that are and right on the subway line for those that are not,' he says.
But Warren Bongard, vice-president of ZSA Recruitment, a Toronto-based recruitment firm for the legal industry, believes a downtown address may not be as attractive as it was before the recession hit and he predicts a growing number of firms will look to relocate to less expensive space as soon as their current leases expire.
He says it makes sense for large firms to be in the downtown core so they can attract institutional clients but for firms specializing in other areas, moving to a less expensive location will pay dividends.
'The way market pressures are going, firms are looking at their overhead and real estate is the biggest one after salaries. Clients are more discerning about looking at art on the wall and realizing they’re paying for it in their hourly rates. There’s greater sophistication on the client side and they realize that being in the downtown core demands higher rents and higher hourly rates. I think there’s a higher consciousness (among firms) and they’re asking, ‘do we need to be downtown?’ ' he says.
Bongard predicts a significant number of firms, those with 50 lawyers or less, will recognize that the value proposition of being downtown isn’t there anymore
'If you can be slightly in the suburbs, or even a few major blocks away, that becomes more profit for them. Employees’ salaries aren’t likely to go down, the one thing that can go down is rent. When leases expire and if firms can avoid being in the big towers, they will,' he says.
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