Reuters reports that UK-based Freshfields Bruckhaus Deringer has signed a 15-year lease for new larger offices in New York City.
Freshfields is no stranger to New York; it opened its NYC office in 1977 and now has more than 200 lawyers in the U.S. It has had a good track record of hiring lateral partners from U.S.-based Am Law 200 firms.
In this market, entering into a 15-year lease involves a huge degree of uncertainty. Who knows what the legal landscape let alone the world will look like in 2039. Freshfields currently wants its lawyers to work out of the office three days a week, but that doesn’t mean that offices will still play the same role in fifteen years time. New York City may be much less important by then compared to Asian markets, and perhaps even the relations between the U.S. and the U.K will look very different.
It’s always easy to pick holes and suggest why a sizable financial commitment may backfire. If nothing else, Freshfields is making a bold move when many of its competitors are looking to scale back their law office leases.
This is yet another shot across the bow of other international law firms, very few of which can expand their presence in the U.S. by hiring high-priced lateral partners and investing in long-term leases. International law firms that have relied on entering into informal arrangements with U.S. based law firms are likely to lose market share as they increasingly face competition from international law firms that are opening offices in U.S. markets.