Location Location Location Technologys Effect


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Location Location Location Technologys Effect

  1. 1. Location, Location, Location.... Technology’s Effect (This futuristic article was written in 1995, prior to one of San Francisco’s largest firm’s startling announcement of its upcoming move to...South of Market Street. Why would they be so bold?!) August, 2000 Hugh B. Bright, Managing Partner of Nomincin & Forgettin, one of California's largest law firms, put it this way: quot;We had been under pressure from several fronts. Our partners were looking to the management of the firm to create policies and execute strategies to boost partner profits. We wanted and needed to maintain and nurture the culture which had helped us to attract the most successful attorneys in their respective practice areas. In a competitive environment our clients were expecting us to be more aggressive than ever at reducing our fees and capping reimbursables. We had a mandate to offer leading edge, client-friendly technology, at great and ongoing expense. Partners were expected to be accountable for the business they managed and clients were demanding senior-level-only attention. We were a spawning ground for competitors seeking lateral hires, offering economic incentives theretofore unheard of in our industry. To make matters worse, our real estate advisors indicated that market rents for comparable space were firming up. In addressing our new office lease, we took on the majority of these issues: 1. Location. Under all the pressure, we came to grips with the usual questions about location. We concluded that paying a premium of $5-$8 per square foot per year for great view space was an enormous waste of resources. We didn't need to be in the most popular building in the city; our clients rarely came to our offices since we linked up on videotel. We began to think of quot;locationquot; as a quot;domainquot;, a meeting quot;placequot; of resources---attorneys, clients and on-line services---to conduct their business. 2. FlexSpace. We envisioned an opportunity to achieve greater efficiency at lower cost---lower quot;fixedquot; costs. Most law firms operated under the assumption that 600 square feet per attorney was reasonable. Office rent once accounted for 8-10% of our revenues. Today these ratios have been halved. Technological advances confounded most of us. On our initial move from our last lease, we reduced from 225,000 square feet to 175,000, and maintained the right to terminate several of our 25,000 square foot floors at regular intervals. Now five years into our new lease we have reduced space to 100,000 square feet, yet productivity---and profits---are soaring. 3. Branding. At one time we felt it important to devote a significant portion of partner capital to create a sense of quot;homequot; within our premises. Now we realize that not only can we not afford such frivolity, such an investment in real estate would run contrary to our long term master plan to support telecommunication efforts throughout our firm's quot;domainquot;. Our firm quot;culturequot; thrives within our staff, yet is not reflected or invested in space which we will be all too happy to return to the landlord.
  2. 2. 4. quot;Secretariesquot;. We have none. Like the on-line multimedia library, it has taken some time and effort to train attorneys to the ways of the latest technology. Our old conventional library is rarely used. We are fully automated, including voice-activation networking. Attorneys and paralegals create, save and file all documentation. We no longer devote resources to central filing, secretarial filing, off-site filing or express mail. 5. CyberCity. Like most national firms, we once chose locations for branch offices which would serve our clients. Our quot;virtualquot; location is now global. We quot;visitquot; clients or prospects regularly through our real-time Web location or through our management software network, where we simultaneously create documents, video- conference or broadcast a custom multimedia presentation to a secured site. Next year we are expecting to add holographic capabilities to our network so that we will actually quot;bequot; with our clients. 6. The Pentium. Not long ago---a few chips ago, to be more precise---the world could hardly fathom the speed or agility of the Pentium chip. Capacity is now twenty-five times greater, at comparable capital contribution. Office automation will further develop and we are committed to being the first to adopt new platforms. Technology has helped to bring greater profit to the bottom line and relieved us of a substantial economic commitment to real estate.quot; August, 1995 publication: The Daily Journal/California Real Estate Journal Any reference drawn to Morrison & Foerster is purely unintentional.