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WHITEPAPER
03
THE LEGAL WORKPLACE 2020
In 2013, Bates Smart published our first White Paper –
The Legal Workplace. The data in this paper predicted
changes to the legal workplace over the next four years
- all of which have proven accurate.
In this paper, we update our key findings and look to the
next four years.
ISSUE 03/4
Lawyers are leaving their offices
INCREASINGLY, LAWYERS OF ALL LEVELS ARE LEAVING THEIR
OFFICES AND EMBRACING AN OPEN, COLLABORATIVE AND
FLEXIBLE WORKPLACE.
KEY FINDING 1
By 2016, this has reduced again with only
35% of legal staff remaining in offices.
We forecast that by 2020, only 10% of legal
staff will occupy offices.
In 2007, 75% of legal staff were in offices.
By 2013, this had decreased to 50%.
2020
10%
35%
2016
2013
50%
75%
2007
Open plan
Office
Lawyers are sharing space
LAWYERS ARE SHARING SPACE MORE THAN EVER, BUT NOT IN THE
SAME WAY AS OTHER INDUSTRIES.
THE LEGAL WORKPLACE REMAINS A PLACE FOR FOCUSED WORK, AND
COLLABORATION OCCURS ELSEWHERE, OFTEN IN MEETING ROOMS.
KEY FINDING 2
Between 2013 and 2016 this has increased by only 2%
and we forecast that by 2020 this will reach 34%.
Evidence suggests that how this space is used will change.
Staff will require less local meeting rooms and more informal
collaboration spaces as they acclimatise to new spaces.
In 2007, only 22% of the legal fitout was
dedicated to business wide collaboration.
By 2013, this grew to 29% of the total area.
Business wide collaboration
spaces (as a % of total area)
2020
34%
31%
2016
2013
29%
22%
2007
ISSUE 03/5
The hospitality revolution is here
LAW FIRMS ARE DEVELOPING CLOSER TIES BETWEEN THEIR STAFF
AND CLIENTS, CREATING A MORE PERSONAL EXPERIENCE.
THE RESULT IS AN INCREASE IN HOSPITALITY SPACES FOR BOTH
CLIENTS AND STAFF.
KEY FINDING 4
6%
In 2013 legal fitouts
dedicated 6% of their
total area to clients.
None of this space was
shared with staff.
By 2016 this area has more than
doubled to 14%. The growth in this
space is mostly dedicated to client
hospitality.
Of the total client area, 21% is
hospitality facilities shared with the staff.
A small increase to 15% by 2020
would align the hospitality provisions
with the technology sector.
Our data predicts a shift towards space
sharing with 30% of the area shared
between staff and clients.
14%
21%
OF 14%
15%
30%
OF 15%
Area of client meeting and
hospitality spaces
Staff and client shared spaces
A new model has emerged
IN THE NEW LEGAL WORKPLACE MODEL, TEAMS ARE MORE
FLEXIBLE AND MOBILE. TRADITIONAL SILOS ARE BREAKING DOWN.
THIS WORKPLACE HAS A HIGHER DENSITY, ENABLING FASTER
KNOWLEDGE SHARING IN A MORE COLLEGIATE ENVIRONMENT.
KEY FINDING 3
We forecast that by 2020, some legal workplaces will start to approach 12 sqm per person. While some
firms will experiment with denser layouts up to 10 sqm per person, their teams may find this challenging.
2016
16 sqm pp
2007
24 sqm pp
2020
10-12 sqm pp
Source: Bates Smart Legal Workplace
Database 2016
ISSUE 03/6
BUT SOME FIRMS
HAVE GONE EVEN FURTHER
We have seen legal firms rival other
professional services workplaces and
decrease to 12 sqm per person.
If this trend continues, this number
could decrease to 10 sqm per person
by 2020.
Law firms have been the last of the
professional services industries to embrace
a more flexible work environment, but that
has changed and changed rapidly.
LAWYERS ARE LEAVING THEIR OFFICES
AREA PER PERSON IN LEGAL
FIRMS IS DECREASING
From 2007 to 2016 we have seen
the average area per person drop
from 24 sqm to 16 sqm.
2016
16 sqm pp
KEY FINDING 1
Source: Bates Smart legal workplace database 2016
2007
24 sqm pp
2020
10-12 sqm pp
ISSUE 03/7
WHY ARE THEY CHANGING?
Increasingly law firms are creating a more
functional and flexible work environment.
This involves reallocating individually owned
offices (me space) in favour of shared
spaces (our space). There are three main
drivers for this change.
Double threat
Law firms are facing a double threat – an
uncertain global economy coupled with
unprecedented competition.
The global firms have moved in and are here
to stay, capitalising upon the relatively stable
and strong Australian market and using it as
a ‘springboard’ to our Asian neighbours.
An increase in competition has led to more
fixed fee structures for legal work. Lawyers
are looking to collaborative work methods to
deliver efficiencies and believe an open plan
environment can better support this work.
Knowledge sharing / social factors
The primary resource of a legal office is
the combined knowledge and experience
of its staff. Firms are looking to access this
‘human database’ rather than allow siloing
to continue.
In addition, law firms work hard to attract
and retain highly educated, experienced
talent. Young staff want access to
senior staff and their experience, valuing
interaction rather than eight hours of isolated
work – cellular office environments support
neither of these demands.
The workspace as a business tool
Real estate is the highest cost to a law
firm after salaries. Law firms have become
increasingly aware that a significant
percentage of their workspace is under-
utilised and therefore overpriced.
The drive is for the tenancy to work harder,
increasing the utilisation of all of the spaces,
including individual work areas.
In addition, the legal workplace needs to
remain flexible to support change. The firm
needs the ability to change configurations
without construction costs every time a
team expands or contracts.
PICTURED
Corrs Chambers Westgarth, Brisbane,
informal breakout
Source: Bates Smart Legal Workplace Database 2016
Offices vs open plan
Percentage in offices
Percentage open plan
Space allocation by rank
Lawyers
Senior Associates
Partners
2000
/ 100% of Lawyers
in offices
/ Space allocation
according to rank
49%
35%
16%
100%
2013
/ 50% of Lawyers
in offices
/ Equal space
allocation
50%
33%
33%
33%
2016
/ 35% of Lawyers
in offices
/ Where offices
are provided,
this is often for
Partners only
35%
58%
29%
13%
CHANGES IN THE LEGAL
WORKPLACE
Over the last decade there has been a shift
from hierarchical and cellular layouts to
more open workplaces with an equal space
allocation.
Those that have retained their offices
have ensured flexibility is built into their
workplace. Offices can convert to quiet
rooms to allow firms to adapt to new ways
of working over the lifespan of the fitout.
ISSUE 03/8
LAWYERS ARE LEAVING THEIR OFFICES
‘Young talent is not interested in practicing
law in the old way. Ask some 25-year-old
law graduates how many of them enjoy
sitting locked in a small office doing data
reviews … it’s a waste of money, brains
and talent.’
Source: Michael Roche, Former Lawyer and Head of UK management consulting firm Kerma Partners, speaking
at the 6th Annual Janders Dean Knowledge Management and Innovation Conference.
WHEN PLANNING A
LEGAL WORKPLACE THE
ALLOCATION OF OFFICES
IS THE MAJOR TOPIC OF
DEBATE
‘Havinganoffice
doesn’tnecess­arilygive
you quiet time.’
‘I need to hide from
people if I want to get
work done.’
‘Without my office my
productivity will plummet’
‘I want people who
are measured by
the size of their brains
not their office.’
KEY FINDING 1
PICTURED
Allens, Brisbane,
reception and client waiting area
Source: Quotes from Partners of major Australian
law firms, obtained during briefing process
ISSUE 03/9
IN ADDITION TO CULTURAL CHANGE THERE IS A DESIRE TO GET
MORE OUT OF THE WORKPLACE AS A BUSINESS TOOL
Legal firms are looking to get more use out of their office space rather than
having large offices sitting empty for over half the day. Technology and workplace
innovations are allowing greater flexibility in how and where lawyers work.
Source: Bates Smart Legal Workplace Database 2016
IN 2013, WE FOUND THAT
THE MORE SPACE YOU OWN,
THE LESS TIME YOU SPEND THERE
The amount of the workspace ‘owned’ by
individuals charted against the amount of
time spent at the desk.
BY 2016, THIS HAS CHANGED
As firms seek a more flexible model where
workspace is interchangeable between
different levels of staff, space for Partners
and Senior Associates has decreased.
2013 - % of workspace
allocated per person
2016 - % of workspace
allocated per person
Constant - % of work time
spent at desk
Isolation
1.	 Lawyers are noticing that the isolation of an
office doesn’t equal an ability to focus. Library
zones and quiet rooms offer a greater ability to
‘getaway’ than staying in your office.
Focus
Confidentiality
2.	 Legal work is often highly confidential and
the office was a way of securing paper files.
However, the highly confidential banking
sector has developed document management
systems and digital networks that secure data
whilst enabling mobility and open plan work. Security
Paper storage
3.	 Advances in technology and e-filing mean
that the office is no longer required to store
walls of files. Lawyers are embracing the time
saving and highly mobile attributes of digital
record keeping.
e-filing
Hierarchy
4.	 While the corner office is still a sign of
status and hierarchy for some, many high
performance CEOs have gone free range,
sharing their experience with their teams. With
increasing rents and pressure on profits not
having an office is a badge of fiscal honour.
...
Knowledge
sharing
70%
22%
12%
2013 2016
Support Staff
62%
14%
22%
2013 2016
Lawyers
42%
35%
45%
2013 2016
Partners
2013 2016
Senior Associates
55%
22%
32%
/ Partners and Senior Associates spend between
45% and 55% of time at their desk.
/ From 2013 to 2016, we have seen their space
allocation decrease in line with utilisation of space.
/ Lawyers and Support Staff spend between
62% and 70% of time at their desk.
/ From 2013 to 2016, their space allocation has
increased to reflect their additional usage and
ensure greater future flexibility to the firm.
ISSUE 03/10
LAWYERS ARE SHARING SPACE
Aligned with the reduction in offices
has been an increase in shared spaces.
These spaces, such as breakout and team
meeting areas, are aimed at increasing
collaboration, networking and the breaking
down of knowledge silos.
TRANSFER FROM INDIVIDUAL
TO SHARED SPACE
Since 2007, there has been
an 18% space transfer from
individually owned to shared space.
Source: Bates Smart legal workplace database 2016
2013
40% of space was individually owned
and all office sizes are equal
2016
30% of space is individually owned and
all workspaces are equal
2007
48% of space was individually owned
with space allocated according to rank
KEY FINDING 2
ISSUE 03/11
In 2007 individuals ‘owned’ 48% of the floorplate
versus 27% allocated to shared and client spaces.
By 2013, we see a shift of 7% from staff spaces
to shared spaces – only 30% of the floorplate was
allocated to the individual versus 35% for client and
shared spaces.
In 2016 this allocation of space has almost reversed
the 2007 allocation. Only 30% of space is individually
owned and 45% allocated to shared spaces.
This represents a blending of spaces, as staff share
their space with clients and clients share their space
with staff.
Source: Bates Smart Legal Workplace Database 2016
SPACE ALLOCATION
Since 2007 there has been a
dramatic increase in the amount of
space dedicated to collaboration.
WHY ARE THEY SHARING?
Over 5 years ago our data showed that
employees in top performing companies
spend 14% more time collaborating and
25% more time learning than those in
average companies.
In addition, employees in average perform­
ing companies spent 9% more time in
isolated focused work.
These top performing companies had 5%
greater growth in profit and 4% greater
growth in revenue.
Put simply: sharing pays
The new legal workplace understands this
and is designed as a place for increased
collaboration, knowledge sharing and
innovation. Lawyers are working together
to develop and share their knowledge base
and client experiences.
The ambition for increased collab­oration
must not come at the cost of the ability to
focus. This still remains critical for lawyers.
PICTURED
Dibbs Barker, Sydney,
breakout area / client and staff cafe
Circul
ation	
	 	 Individuallyowned
spaces
2007
Shared
s
paces
Client
25%
48%
5%
22%
Circula
tion	
	
Indivi
duallyowned
Sha
red
spaces
 Client
spaces
2016
30%
14%
31%
25%
spaces
Circula
tion	
	
In
dividuallyowned
Shar
ed
spaces Client
2013
29%
25%
40%
6%
ISSUE 03/14
The reduction in the number of offices has
created space for shared facilities: team
meeting areas, large communal cafes,
quiet and focus rooms.
LAWYERS ARE SHARING SPACE
FOCUS AND COLLABORATION
The increase in shared spaces since
2007 has been tailored to the
changing requirements of the legal
workplace.
Source: Bates Smart legal workplace database 2016
Informal collaboration
80% increase in the provision of
2-4 person meeting spaces
...
Social spaces
100% increase in the provision of
breakout/social spaces
Focused spaces
500% increase in the provision
of small quiet, focus rooms -
replacing offices
KEY FINDING 2
ISSUE 03/15
OPEN COLLABORATION SPACES -
FROM 2013 to 2016
// 50% decrease in open collaboration spaces
// 25% increase in staff shared breakout /
social spaces
WHICH SHARED SPACES
ARE INCREASING?
From 2007 to 2013 we saw an increase in
both open collaboration and focused spaces.
By 2016, open collaboration spaces have
decreased by almost 50%.
Why?
Large open collaboration spaces are
challenging for lawyers. They are too
disruptive for those in the adjacent
‘quiet’ workspace.
ENCLOSED FOCUSED SPACES -
FROM 2013 to 2016
// 15% increase in enclosed collaboration spaces for
team meetings on workfloors
// 2.5x increase in 1-2 p focus rooms, in line with the
shift of more lawyers into open plan.
HOW ARE THEY SHARING?
Since 2007 we have seen a significant
increase in the number of shared enclosed
spaces dedicated to team focus work.
Rooms such as case / war rooms where
teams can embed themselves are key to
supporting lawyers in open plan layouts.
As the cellular model breaks down we
have also seen an emphasis on dedicated
quiet rooms for individual focus work, away
from distractions.
There has also been a change in the type
of open collaboration spaces:
// Small open collaboration spaces
immediately adjacent to the workspace
remain critical for quick informal discussions
// Larger centralised hubs (breakout spaces /
cafes) aim to draw staff together from
different teams in both social and work
modes
// Open plan layouts give staff an immediate
visual connection across departments
– something that is difficult to achieve in
corridors of offices.
PICTURED
Maddocks Melbourne,
void and interconnecting stair
Following page:
Maddocks Melbourne,
external terrace
6%
3%
4%
2007 2013 2016
Shared Breakout /
Social Spaces
5%
0%
2007 2013 2016
2%
Enclosed
Focus Rooms
7%
2%
2007 2013 2016
6%
Enclosed
Collaboration
1%
0%
2%
2007 2013 2016
Open
Collaboration
Source: Bates Smart legal workplace database 2016
ISSUE 03/16
A NEW MODEL HAS EMERGED
A new legal workplace model is emerging
where teams are more flexible and mobile
and traditional silos are broken down.
This workplace enables team flexibility
and knowledge sharing in a more
collegiate environment.
AN INTEGRATED WORKPLACE
Changes to the legal workplace
accompany changes to the culture
of knowledge sharing.
EMERGING MODEL
Integrated teams
Silos are further broken down.
All levels of staff develop networks
to access expertise within the firm.
TRADITIONAL MODEL
The fixed team
Siloed structure. This is the traditional legal model.
Lawyers are allocated to a team and
those teams work in isolation.
INTERMEDIATE MODEL
The mixed team
Starting to break down the silos.
This model encourages further interaction between
practice groups but is limited to senior staff.
KEY FINDING 3
PICTURED
Opposite page:
Sparke Helmore,
staff and client cafe
THE CHANGING STRUCTURE OF THE
LEGAL WORKPLACE IS DESIGNED TO
SUPPORT A NEW LAW FIRM MODEL
Traditional Model
In 2000 the Traditional Fixed Team was the
dominant legal firm model.
// This model had a clear division of teams
within the firm (corporate, taxation etc)
and a strong hierarchy within each team
(Partner, Senior Associate etc).
// This model was supported by a cellular
environment with limited firm or team
collaboration spaces.
Intermediate Model
Over time, firms have restructured with a
view to increasing knowledge transfer, both
within teams and between teams. This
saw the emergence of a new model – the
Mixed Team.
This model aims to encourage not only the
top down transfer of knowledge but to also
capture the benefits of different teams within
the law firm working together and sharing
their learning, experiences and clients. The
workplace reflected these changes with the
emergence of more shared spaces:
// A larger client floor with team training areas
and a large boardroom to cater for client
and entire staff functions
// Breakout hubs on each work floor aimed
at bringing staff together
// Team war rooms on each level aimed at
accommodating both smaller meetings
and high intensity work functions.
The challenge in this model is that it only
encourages interaction between teams
located on the same floor. Partners know
who to contact to tap into an existing
knowledge base, but interaction between
others in the firm is minimal. Silos between
teams still exist.
The Emerging Model
The Emerging Model aims to break down
the remaining silos between all members
of the firm so that every member of staff is
aware of the function and capacity of, not
only their own teams, but all other teams in
the firm.
How? By opening up the workplace and
allowing teams to be flexible and mobile,
creating sightlines between floors and easy
access via internal stairs, and by creating
spaces to temporarily integrate team
members who need to share knowledge and
create a collegiate environment. We know
this as the Integrated Team.
ISSUE 03/18
WHAT DOES THIS MODEL LOOK LIKE?
The traditional cellular fitout is replaced by
open workspace clusters / neighbourhoods
with good sightlines.
There is a plentiful distribution of open and
enclosed collaboration spaces for both
individuals and teams within close reach of
work desks.
These spaces are designed to be flexible,
modular ‘built spaces’ which are easily
adjusted to suit the needs of individual
practice areas or  departments.
The benefits
The benefits of this layout are numerous:
// Efficient use of floor plate
// A more flexible and mobile work environment
// Facilitation and encouragement of
mentoring, skills development and real time
knowledge sharing
// A greater connectivity between staff, within
teams and across practice areas
// Open communication, creativity and
innovation and skilled minds working
together.
The challenges
For law firms (as with many industries)
adopting a more open environment poses
three main challenges:
1.	 Ensuring adequate acoustic separation
2.	 Finding privacy and quiet when required
3.	 Maintaining confidentiality.
These challenges are not insurmountable
and can be solved by intelligent design:
// Generous, customised desks with offset
design to aid acoustics and privacy
// A high ratio of quiet rooms as well as larger
enclosed rooms for longer term use by
teams working together
// Technology for file storage and digital
security, enabling ease of mobility
between spaces.
Flexibility is Key
Many law firms are testing whether a more
open environment will suit their workstyle
and culture. As such, their workspaces are
designed with maximum flexibility. Built
space is designed to be interchangeable
- a simple move of a desk can convert
space from an office to a quiet room to a
team room.
This design allows teams to select the way
they want to practice from day one and to
change or evolve over time.
The Integrated Team layout provides
a flexible arrangement of spaces which
satisfy each of the work modes – focus,
collaboration, learning and social spaces.
PICTURED
Corrs Chambers Westgarth, Melbourne,
interconnecting stair with meeting areas
Opposite page:
Dibbs Barker, Sydney,
reception and client waiting area
A NEW MODEL HAS EMERGED
KEY FINDING 3
ISSUE 03/20
THE HOSPITALITY REVOLUTION IS HERE
As law firms look to strengthen client
relationships there is a focus on in-house
entertaining in signature spaces.
KEY FINDING 4
ISSUE 03/21
In our initial White Paper, we predicted
“the hospitality revolution is coming”. Our
database now shows it has arrived.
A RANGE OF EXPERIENCES
Law firms have always focused on their
client's experience and we have seen their
preference vacillate between in-house and
external dining.
Over the past four years, the emphasis
has been on a broader range of in-house
hospitality offerings. Baristas, sky terraces
and fine dining prevails as firms look to a
personable and unique experience, akin to
that of a five star hotel.
MEET OUR TEAM
Clients are looking to better know the
lawyers with whom they work. They want to
be part of a team whose business is not too
different from their own.
To this end, firms are blurring traditional
boundaries between staff and client areas.
Staff are being invited to share some of the
client hospitality spaces, signalling to them
their value to the firm.
PICTURED
Corrs Chambers Westgarth, Melbourne,
reception and client waiting area
Following page:
Corrs Chambers Westgarth, Melbourne, staff and client cafe
Ending page:
Corrs Chambers Westgarth, Perth, meeting room
Conversely clients are offered views into
open plan work areas to display the depth
of talent.
SHARING KNOWLEDGE
A resurgence in knowledge ownership has
resulted in increased demand for large scale
seminar and cocktail event spaces.
These areas require flexibility so they can be
used throughout the day.
Using operable walls they often adjoin
reception and open out for large client
cocktail or town hall staff meetings.
These spaces can also open up further to
the staff cafĂŠ / breakout space to create
unique large scale entertaining spaces.
FLEXIBILITY
In all of these configurations flexibility is
paramount. By combining key areas, law
firms are both increasing their capacity for
entertaining and increasing their space
utilisation.
They are dedicating more space to client
areas, but making it work harder.
5%
In 2007 legal fitouts
dedicated 5% of their
total area to clients.
None of this space was
shared with staff.
By 2016 this area has more than
doubled to 14%. The growth in this
space is mostly dedicated to client
hospitality.
Of the total client area, 21% is
hospitality facilities shared with the staff.
A small increase to 15% by 2020
would align the hospitality provisions
with the technology sector.
Our data predicts a shift towards space
sharing with 30% of the area shared
between staff and clients.
14%
21%
OF 14%
15%
30%
OF 15%
FRONT OF HOUSE CLIENT SPACES
HAVE INCREASED SIGNIFICANTLY
Since 2007 the configuration of client spaces
has changed dramatically. Previously this was
a series of enclosed rooms isolated from staff.
The new Legal Workplace offers a suite of
front of house spaces that are often shared
with staff.
Source: Bates Smart legal workplace database 2016
ISSUE 03/23
LOOKING EVEN FURTHER AHEAD TO 2030 ...
Legal markets are undergoing disruption with new models
of service emerging. There is pressure to decrease margins,
increase productivity and improve client service standards.
What does this mean for the workplace?
THE FIN-TECH WORKPLACE
In the last five years advances in technology
has revolutionised the financial workplace,
coining the term fin-tech.
Fin-tech companies are now in a war
for talent, trying to hire programmers
away from tech firms. Their workplaces
often look more like start ups as they
huddle in stand up meetings and work
in close knit teams.
While t-shirts and ping pong may seem
a long way from the legal workplace, there
are some striking similarities:
// A similar workstyle requiring long periods
of individual, quiet, focused work
// Ownership by a group of partners who
share equity in the business
// Individual contracts for a broad client base
ranging in size
// The need to specialise across a wide
variety of sectors
Which begs the question, how do
fin-tech firms accommodate the future and
is this relevant to law firms?
FLEXIBILITY IS PARAMOUNT
There is one certainty in this changing legal
landscape; it will continue to change and
evolve. The workplace model that a law
firm selects today, will change in the future,
often within the life of a tenancy.
Fin-Tech achieves this level of workplace
flexibility with three key initiatives:
1. Agile Spaces - Technology workplaces
ensure business agility with the ability to
contract and expand their teams in different
departments at the same time. For this to
occur they need to minimise specialised
spaces, but support unique requirements.
This is achieved with reconfigurable
spaces. For example, an office can change
to a meeting room in under an hour. This
allows different teams to occupy the same
kit of spaces in different ways.
2. Mobile Staff - The overall structure
of firms will change. Divisions between
practice groups will become more flexible.
Teams need to be more mobile to flex
or contract as demand for particular
services arise.
Staff can easily move matter by matter to
sit next to those with whom they work.
Long term 'ownership' of desks and offices
inhibits the speed with which teams can
reconfigure. Storage is the key.
Storage = ownership = staff that are
difficult to move.
By reducing and centralising storage, staff
are less tethered to their desks and mobility
is no longer a barrier to a project (or matter)
based environment.
3. Space utilisation - If law firms commit
today to a lease, they need to build in the
flexibility to grow or contract in the future.
Flexible desking arrangements can allow a
business to increase capacity by up to 20%
just by adding chairs and monitors, and
decreasing personal space.
This will require a high ratio of support
spaces to offset the increase in density.
Also, key infrastructure such as reception or
comms rooms should be located centrally
within the stack, in case floors are sublet.
AS COST PRESSURES INCREASE,
EVERY SQUARE METRE OF A LEGAL
FITOUT WILL BE QUESTIONED AND
NEED TO BE JUSTIFIED.
1.	 There will no longer be the space to
store unnecessary paper and files,
thrusting lawyers into the digital age.
2.	 Staff and social spaces will increase, but
these will increasingly be shared across
the entire fitout.
3.	 Many businesses share support
functions with other tenants, reducing
the demand for space. Building owners
are increasingly offering large meeting
suites to entice tenants.
LAW FIRMS CAN LEARN FROM TECH DISRUPTORS
While 'robo-lawyers' remain in the distant future many time consuming and routine
legal tasks are already being automated.
To understand the impact of technology on the legal workplace, we look to other
professions where technology has already had an impact.
Let’s touch base again in 2020 to see if we're on track for 2030 …
SYDNEY
43 Brisbane Street Surry Hills
New South Wales 2010 Australia
T +61 2 8354 5100
F +61 2 8354 5199
MELBOURNE
1 Nicholson Street Melbourne
Victoria 3000 Australia
T +61 3 8664 6200
F +61 3 8664 6300
WWW.BATESSMART.COM
ARCHITECTURE
INTERIOR DESIGN
URBAN DESIGN
STRATEGY

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Bates Smart White Paper 03

  • 2.
  • 3. In 2013, Bates Smart published our first White Paper – The Legal Workplace. The data in this paper predicted changes to the legal workplace over the next four years - all of which have proven accurate. In this paper, we update our key findings and look to the next four years.
  • 4. ISSUE 03/4 Lawyers are leaving their offices INCREASINGLY, LAWYERS OF ALL LEVELS ARE LEAVING THEIR OFFICES AND EMBRACING AN OPEN, COLLABORATIVE AND FLEXIBLE WORKPLACE. KEY FINDING 1 By 2016, this has reduced again with only 35% of legal staff remaining in offices. We forecast that by 2020, only 10% of legal staff will occupy offices. In 2007, 75% of legal staff were in offices. By 2013, this had decreased to 50%. 2020 10% 35% 2016 2013 50% 75% 2007 Open plan Office Lawyers are sharing space LAWYERS ARE SHARING SPACE MORE THAN EVER, BUT NOT IN THE SAME WAY AS OTHER INDUSTRIES. THE LEGAL WORKPLACE REMAINS A PLACE FOR FOCUSED WORK, AND COLLABORATION OCCURS ELSEWHERE, OFTEN IN MEETING ROOMS. KEY FINDING 2 Between 2013 and 2016 this has increased by only 2% and we forecast that by 2020 this will reach 34%. Evidence suggests that how this space is used will change. Staff will require less local meeting rooms and more informal collaboration spaces as they acclimatise to new spaces. In 2007, only 22% of the legal fitout was dedicated to business wide collaboration. By 2013, this grew to 29% of the total area. Business wide collaboration spaces (as a % of total area) 2020 34% 31% 2016 2013 29% 22% 2007
  • 5. ISSUE 03/5 The hospitality revolution is here LAW FIRMS ARE DEVELOPING CLOSER TIES BETWEEN THEIR STAFF AND CLIENTS, CREATING A MORE PERSONAL EXPERIENCE. THE RESULT IS AN INCREASE IN HOSPITALITY SPACES FOR BOTH CLIENTS AND STAFF. KEY FINDING 4 6% In 2013 legal fitouts dedicated 6% of their total area to clients. None of this space was shared with staff. By 2016 this area has more than doubled to 14%. The growth in this space is mostly dedicated to client hospitality. Of the total client area, 21% is hospitality facilities shared with the staff. A small increase to 15% by 2020 would align the hospitality provisions with the technology sector. Our data predicts a shift towards space sharing with 30% of the area shared between staff and clients. 14% 21% OF 14% 15% 30% OF 15% Area of client meeting and hospitality spaces Staff and client shared spaces A new model has emerged IN THE NEW LEGAL WORKPLACE MODEL, TEAMS ARE MORE FLEXIBLE AND MOBILE. TRADITIONAL SILOS ARE BREAKING DOWN. THIS WORKPLACE HAS A HIGHER DENSITY, ENABLING FASTER KNOWLEDGE SHARING IN A MORE COLLEGIATE ENVIRONMENT. KEY FINDING 3 We forecast that by 2020, some legal workplaces will start to approach 12 sqm per person. While some firms will experiment with denser layouts up to 10 sqm per person, their teams may find this challenging. 2016 16 sqm pp 2007 24 sqm pp 2020 10-12 sqm pp Source: Bates Smart Legal Workplace Database 2016
  • 6. ISSUE 03/6 BUT SOME FIRMS HAVE GONE EVEN FURTHER We have seen legal firms rival other professional services workplaces and decrease to 12 sqm per person. If this trend continues, this number could decrease to 10 sqm per person by 2020. Law firms have been the last of the professional services industries to embrace a more flexible work environment, but that has changed and changed rapidly. LAWYERS ARE LEAVING THEIR OFFICES AREA PER PERSON IN LEGAL FIRMS IS DECREASING From 2007 to 2016 we have seen the average area per person drop from 24 sqm to 16 sqm. 2016 16 sqm pp KEY FINDING 1 Source: Bates Smart legal workplace database 2016 2007 24 sqm pp 2020 10-12 sqm pp
  • 7. ISSUE 03/7 WHY ARE THEY CHANGING? Increasingly law firms are creating a more functional and flexible work environment. This involves reallocating individually owned offices (me space) in favour of shared spaces (our space). There are three main drivers for this change. Double threat Law firms are facing a double threat – an uncertain global economy coupled with unprecedented competition. The global firms have moved in and are here to stay, capitalising upon the relatively stable and strong Australian market and using it as a ‘springboard’ to our Asian neighbours. An increase in competition has led to more fixed fee structures for legal work. Lawyers are looking to collaborative work methods to deliver efficiencies and believe an open plan environment can better support this work. Knowledge sharing / social factors The primary resource of a legal office is the combined knowledge and experience of its staff. Firms are looking to access this ‘human database’ rather than allow siloing to continue. In addition, law firms work hard to attract and retain highly educated, experienced talent. Young staff want access to senior staff and their experience, valuing interaction rather than eight hours of isolated work – cellular office environments support neither of these demands. The workspace as a business tool Real estate is the highest cost to a law firm after salaries. Law firms have become increasingly aware that a significant percentage of their workspace is under- utilised and therefore overpriced. The drive is for the tenancy to work harder, increasing the utilisation of all of the spaces, including individual work areas. In addition, the legal workplace needs to remain flexible to support change. The firm needs the ability to change configurations without construction costs every time a team expands or contracts. PICTURED Corrs Chambers Westgarth, Brisbane, informal breakout Source: Bates Smart Legal Workplace Database 2016 Offices vs open plan Percentage in offices Percentage open plan Space allocation by rank Lawyers Senior Associates Partners 2000 / 100% of Lawyers in offices / Space allocation according to rank 49% 35% 16% 100% 2013 / 50% of Lawyers in offices / Equal space allocation 50% 33% 33% 33% 2016 / 35% of Lawyers in offices / Where offices are provided, this is often for Partners only 35% 58% 29% 13% CHANGES IN THE LEGAL WORKPLACE Over the last decade there has been a shift from hierarchical and cellular layouts to more open workplaces with an equal space allocation. Those that have retained their offices have ensured flexibility is built into their workplace. Offices can convert to quiet rooms to allow firms to adapt to new ways of working over the lifespan of the fitout.
  • 8. ISSUE 03/8 LAWYERS ARE LEAVING THEIR OFFICES ‘Young talent is not interested in practicing law in the old way. Ask some 25-year-old law graduates how many of them enjoy sitting locked in a small office doing data reviews … it’s a waste of money, brains and talent.’ Source: Michael Roche, Former Lawyer and Head of UK management consulting firm Kerma Partners, speaking at the 6th Annual Janders Dean Knowledge Management and Innovation Conference. WHEN PLANNING A LEGAL WORKPLACE THE ALLOCATION OF OFFICES IS THE MAJOR TOPIC OF DEBATE ‘Havinganoffice doesn’tnecess­arilygive you quiet time.’ ‘I need to hide from people if I want to get work done.’ ‘Without my office my productivity will plummet’ ‘I want people who are measured by the size of their brains not their office.’ KEY FINDING 1 PICTURED Allens, Brisbane, reception and client waiting area Source: Quotes from Partners of major Australian law firms, obtained during briefing process
  • 9. ISSUE 03/9 IN ADDITION TO CULTURAL CHANGE THERE IS A DESIRE TO GET MORE OUT OF THE WORKPLACE AS A BUSINESS TOOL Legal firms are looking to get more use out of their office space rather than having large offices sitting empty for over half the day. Technology and workplace innovations are allowing greater flexibility in how and where lawyers work. Source: Bates Smart Legal Workplace Database 2016 IN 2013, WE FOUND THAT THE MORE SPACE YOU OWN, THE LESS TIME YOU SPEND THERE The amount of the workspace ‘owned’ by individuals charted against the amount of time spent at the desk. BY 2016, THIS HAS CHANGED As firms seek a more flexible model where workspace is interchangeable between different levels of staff, space for Partners and Senior Associates has decreased. 2013 - % of workspace allocated per person 2016 - % of workspace allocated per person Constant - % of work time spent at desk Isolation 1. Lawyers are noticing that the isolation of an office doesn’t equal an ability to focus. Library zones and quiet rooms offer a greater ability to ‘getaway’ than staying in your office. Focus Confidentiality 2. Legal work is often highly confidential and the office was a way of securing paper files. However, the highly confidential banking sector has developed document management systems and digital networks that secure data whilst enabling mobility and open plan work. Security Paper storage 3. Advances in technology and e-filing mean that the office is no longer required to store walls of files. Lawyers are embracing the time saving and highly mobile attributes of digital record keeping. e-filing Hierarchy 4. While the corner office is still a sign of status and hierarchy for some, many high performance CEOs have gone free range, sharing their experience with their teams. With increasing rents and pressure on profits not having an office is a badge of fiscal honour. ... Knowledge sharing 70% 22% 12% 2013 2016 Support Staff 62% 14% 22% 2013 2016 Lawyers 42% 35% 45% 2013 2016 Partners 2013 2016 Senior Associates 55% 22% 32% / Partners and Senior Associates spend between 45% and 55% of time at their desk. / From 2013 to 2016, we have seen their space allocation decrease in line with utilisation of space. / Lawyers and Support Staff spend between 62% and 70% of time at their desk. / From 2013 to 2016, their space allocation has increased to reflect their additional usage and ensure greater future flexibility to the firm.
  • 10. ISSUE 03/10 LAWYERS ARE SHARING SPACE Aligned with the reduction in offices has been an increase in shared spaces. These spaces, such as breakout and team meeting areas, are aimed at increasing collaboration, networking and the breaking down of knowledge silos. TRANSFER FROM INDIVIDUAL TO SHARED SPACE Since 2007, there has been an 18% space transfer from individually owned to shared space. Source: Bates Smart legal workplace database 2016 2013 40% of space was individually owned and all office sizes are equal 2016 30% of space is individually owned and all workspaces are equal 2007 48% of space was individually owned with space allocated according to rank KEY FINDING 2
  • 11. ISSUE 03/11 In 2007 individuals ‘owned’ 48% of the floorplate versus 27% allocated to shared and client spaces. By 2013, we see a shift of 7% from staff spaces to shared spaces – only 30% of the floorplate was allocated to the individual versus 35% for client and shared spaces. In 2016 this allocation of space has almost reversed the 2007 allocation. Only 30% of space is individually owned and 45% allocated to shared spaces. This represents a blending of spaces, as staff share their space with clients and clients share their space with staff. Source: Bates Smart Legal Workplace Database 2016 SPACE ALLOCATION Since 2007 there has been a dramatic increase in the amount of space dedicated to collaboration. WHY ARE THEY SHARING? Over 5 years ago our data showed that employees in top performing companies spend 14% more time collaborating and 25% more time learning than those in average companies. In addition, employees in average perform­ ing companies spent 9% more time in isolated focused work. These top performing companies had 5% greater growth in profit and 4% greater growth in revenue. Put simply: sharing pays The new legal workplace understands this and is designed as a place for increased collaboration, knowledge sharing and innovation. Lawyers are working together to develop and share their knowledge base and client experiences. The ambition for increased collab­oration must not come at the cost of the ability to focus. This still remains critical for lawyers. PICTURED Dibbs Barker, Sydney, breakout area / client and staff cafe Circul ation Individuallyowned spaces 2007 Shared s paces Client 25% 48% 5% 22% Circula tion Indivi duallyowned Sha red spaces  Client spaces 2016 30% 14% 31% 25% spaces Circula tion In dividuallyowned Shar ed spaces Client 2013 29% 25% 40% 6%
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  • 14. ISSUE 03/14 The reduction in the number of offices has created space for shared facilities: team meeting areas, large communal cafes, quiet and focus rooms. LAWYERS ARE SHARING SPACE FOCUS AND COLLABORATION The increase in shared spaces since 2007 has been tailored to the changing requirements of the legal workplace. Source: Bates Smart legal workplace database 2016 Informal collaboration 80% increase in the provision of 2-4 person meeting spaces ... Social spaces 100% increase in the provision of breakout/social spaces Focused spaces 500% increase in the provision of small quiet, focus rooms - replacing offices KEY FINDING 2
  • 15. ISSUE 03/15 OPEN COLLABORATION SPACES - FROM 2013 to 2016 // 50% decrease in open collaboration spaces // 25% increase in staff shared breakout / social spaces WHICH SHARED SPACES ARE INCREASING? From 2007 to 2013 we saw an increase in both open collaboration and focused spaces. By 2016, open collaboration spaces have decreased by almost 50%. Why? Large open collaboration spaces are challenging for lawyers. They are too disruptive for those in the adjacent ‘quiet’ workspace. ENCLOSED FOCUSED SPACES - FROM 2013 to 2016 // 15% increase in enclosed collaboration spaces for team meetings on workfloors // 2.5x increase in 1-2 p focus rooms, in line with the shift of more lawyers into open plan. HOW ARE THEY SHARING? Since 2007 we have seen a significant increase in the number of shared enclosed spaces dedicated to team focus work. Rooms such as case / war rooms where teams can embed themselves are key to supporting lawyers in open plan layouts. As the cellular model breaks down we have also seen an emphasis on dedicated quiet rooms for individual focus work, away from distractions. There has also been a change in the type of open collaboration spaces: // Small open collaboration spaces immediately adjacent to the workspace remain critical for quick informal discussions // Larger centralised hubs (breakout spaces / cafes) aim to draw staff together from different teams in both social and work modes // Open plan layouts give staff an immediate visual connection across departments – something that is difficult to achieve in corridors of offices. PICTURED Maddocks Melbourne, void and interconnecting stair Following page: Maddocks Melbourne, external terrace 6% 3% 4% 2007 2013 2016 Shared Breakout / Social Spaces 5% 0% 2007 2013 2016 2% Enclosed Focus Rooms 7% 2% 2007 2013 2016 6% Enclosed Collaboration 1% 0% 2% 2007 2013 2016 Open Collaboration Source: Bates Smart legal workplace database 2016
  • 16. ISSUE 03/16 A NEW MODEL HAS EMERGED A new legal workplace model is emerging where teams are more flexible and mobile and traditional silos are broken down. This workplace enables team flexibility and knowledge sharing in a more collegiate environment. AN INTEGRATED WORKPLACE Changes to the legal workplace accompany changes to the culture of knowledge sharing. EMERGING MODEL Integrated teams Silos are further broken down. All levels of staff develop networks to access expertise within the firm. TRADITIONAL MODEL The fixed team Siloed structure. This is the traditional legal model. Lawyers are allocated to a team and those teams work in isolation. INTERMEDIATE MODEL The mixed team Starting to break down the silos. This model encourages further interaction between practice groups but is limited to senior staff. KEY FINDING 3 PICTURED Opposite page: Sparke Helmore, staff and client cafe THE CHANGING STRUCTURE OF THE LEGAL WORKPLACE IS DESIGNED TO SUPPORT A NEW LAW FIRM MODEL Traditional Model In 2000 the Traditional Fixed Team was the dominant legal firm model. // This model had a clear division of teams within the firm (corporate, taxation etc) and a strong hierarchy within each team (Partner, Senior Associate etc). // This model was supported by a cellular environment with limited firm or team collaboration spaces. Intermediate Model Over time, firms have restructured with a view to increasing knowledge transfer, both within teams and between teams. This saw the emergence of a new model – the Mixed Team. This model aims to encourage not only the top down transfer of knowledge but to also capture the benefits of different teams within the law firm working together and sharing their learning, experiences and clients. The workplace reflected these changes with the emergence of more shared spaces: // A larger client floor with team training areas and a large boardroom to cater for client and entire staff functions // Breakout hubs on each work floor aimed at bringing staff together // Team war rooms on each level aimed at accommodating both smaller meetings and high intensity work functions. The challenge in this model is that it only encourages interaction between teams located on the same floor. Partners know who to contact to tap into an existing knowledge base, but interaction between others in the firm is minimal. Silos between teams still exist. The Emerging Model The Emerging Model aims to break down the remaining silos between all members of the firm so that every member of staff is aware of the function and capacity of, not only their own teams, but all other teams in the firm. How? By opening up the workplace and allowing teams to be flexible and mobile, creating sightlines between floors and easy access via internal stairs, and by creating spaces to temporarily integrate team members who need to share knowledge and create a collegiate environment. We know this as the Integrated Team.
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  • 18. ISSUE 03/18 WHAT DOES THIS MODEL LOOK LIKE? The traditional cellular fitout is replaced by open workspace clusters / neighbourhoods with good sightlines. There is a plentiful distribution of open and enclosed collaboration spaces for both individuals and teams within close reach of work desks. These spaces are designed to be flexible, modular ‘built spaces’ which are easily adjusted to suit the needs of individual practice areas or  departments. The benefits The benefits of this layout are numerous: // Efficient use of floor plate // A more flexible and mobile work environment // Facilitation and encouragement of mentoring, skills development and real time knowledge sharing // A greater connectivity between staff, within teams and across practice areas // Open communication, creativity and innovation and skilled minds working together. The challenges For law firms (as with many industries) adopting a more open environment poses three main challenges: 1. Ensuring adequate acoustic separation 2. Finding privacy and quiet when required 3. Maintaining confidentiality. These challenges are not insurmountable and can be solved by intelligent design: // Generous, customised desks with offset design to aid acoustics and privacy // A high ratio of quiet rooms as well as larger enclosed rooms for longer term use by teams working together // Technology for file storage and digital security, enabling ease of mobility between spaces. Flexibility is Key Many law firms are testing whether a more open environment will suit their workstyle and culture. As such, their workspaces are designed with maximum flexibility. Built space is designed to be interchangeable - a simple move of a desk can convert space from an office to a quiet room to a team room. This design allows teams to select the way they want to practice from day one and to change or evolve over time. The Integrated Team layout provides a flexible arrangement of spaces which satisfy each of the work modes – focus, collaboration, learning and social spaces. PICTURED Corrs Chambers Westgarth, Melbourne, interconnecting stair with meeting areas Opposite page: Dibbs Barker, Sydney, reception and client waiting area A NEW MODEL HAS EMERGED KEY FINDING 3
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  • 20. ISSUE 03/20 THE HOSPITALITY REVOLUTION IS HERE As law firms look to strengthen client relationships there is a focus on in-house entertaining in signature spaces. KEY FINDING 4
  • 21. ISSUE 03/21 In our initial White Paper, we predicted “the hospitality revolution is coming”. Our database now shows it has arrived. A RANGE OF EXPERIENCES Law firms have always focused on their client's experience and we have seen their preference vacillate between in-house and external dining. Over the past four years, the emphasis has been on a broader range of in-house hospitality offerings. Baristas, sky terraces and fine dining prevails as firms look to a personable and unique experience, akin to that of a five star hotel. MEET OUR TEAM Clients are looking to better know the lawyers with whom they work. They want to be part of a team whose business is not too different from their own. To this end, firms are blurring traditional boundaries between staff and client areas. Staff are being invited to share some of the client hospitality spaces, signalling to them their value to the firm. PICTURED Corrs Chambers Westgarth, Melbourne, reception and client waiting area Following page: Corrs Chambers Westgarth, Melbourne, staff and client cafe Ending page: Corrs Chambers Westgarth, Perth, meeting room Conversely clients are offered views into open plan work areas to display the depth of talent. SHARING KNOWLEDGE A resurgence in knowledge ownership has resulted in increased demand for large scale seminar and cocktail event spaces. These areas require flexibility so they can be used throughout the day. Using operable walls they often adjoin reception and open out for large client cocktail or town hall staff meetings. These spaces can also open up further to the staff cafĂŠ / breakout space to create unique large scale entertaining spaces. FLEXIBILITY In all of these configurations flexibility is paramount. By combining key areas, law firms are both increasing their capacity for entertaining and increasing their space utilisation. They are dedicating more space to client areas, but making it work harder. 5% In 2007 legal fitouts dedicated 5% of their total area to clients. None of this space was shared with staff. By 2016 this area has more than doubled to 14%. The growth in this space is mostly dedicated to client hospitality. Of the total client area, 21% is hospitality facilities shared with the staff. A small increase to 15% by 2020 would align the hospitality provisions with the technology sector. Our data predicts a shift towards space sharing with 30% of the area shared between staff and clients. 14% 21% OF 14% 15% 30% OF 15% FRONT OF HOUSE CLIENT SPACES HAVE INCREASED SIGNIFICANTLY Since 2007 the configuration of client spaces has changed dramatically. Previously this was a series of enclosed rooms isolated from staff. The new Legal Workplace offers a suite of front of house spaces that are often shared with staff. Source: Bates Smart legal workplace database 2016
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  • 23. ISSUE 03/23 LOOKING EVEN FURTHER AHEAD TO 2030 ... Legal markets are undergoing disruption with new models of service emerging. There is pressure to decrease margins, increase productivity and improve client service standards. What does this mean for the workplace? THE FIN-TECH WORKPLACE In the last five years advances in technology has revolutionised the financial workplace, coining the term fin-tech. Fin-tech companies are now in a war for talent, trying to hire programmers away from tech firms. Their workplaces often look more like start ups as they huddle in stand up meetings and work in close knit teams. While t-shirts and ping pong may seem a long way from the legal workplace, there are some striking similarities: // A similar workstyle requiring long periods of individual, quiet, focused work // Ownership by a group of partners who share equity in the business // Individual contracts for a broad client base ranging in size // The need to specialise across a wide variety of sectors Which begs the question, how do fin-tech firms accommodate the future and is this relevant to law firms? FLEXIBILITY IS PARAMOUNT There is one certainty in this changing legal landscape; it will continue to change and evolve. The workplace model that a law firm selects today, will change in the future, often within the life of a tenancy. Fin-Tech achieves this level of workplace flexibility with three key initiatives: 1. Agile Spaces - Technology workplaces ensure business agility with the ability to contract and expand their teams in different departments at the same time. For this to occur they need to minimise specialised spaces, but support unique requirements. This is achieved with reconfigurable spaces. For example, an office can change to a meeting room in under an hour. This allows different teams to occupy the same kit of spaces in different ways. 2. Mobile Staff - The overall structure of firms will change. Divisions between practice groups will become more flexible. Teams need to be more mobile to flex or contract as demand for particular services arise. Staff can easily move matter by matter to sit next to those with whom they work. Long term 'ownership' of desks and offices inhibits the speed with which teams can reconfigure. Storage is the key. Storage = ownership = staff that are difficult to move. By reducing and centralising storage, staff are less tethered to their desks and mobility is no longer a barrier to a project (or matter) based environment. 3. Space utilisation - If law firms commit today to a lease, they need to build in the flexibility to grow or contract in the future. Flexible desking arrangements can allow a business to increase capacity by up to 20% just by adding chairs and monitors, and decreasing personal space. This will require a high ratio of support spaces to offset the increase in density. Also, key infrastructure such as reception or comms rooms should be located centrally within the stack, in case floors are sublet. AS COST PRESSURES INCREASE, EVERY SQUARE METRE OF A LEGAL FITOUT WILL BE QUESTIONED AND NEED TO BE JUSTIFIED. 1. There will no longer be the space to store unnecessary paper and files, thrusting lawyers into the digital age. 2. Staff and social spaces will increase, but these will increasingly be shared across the entire fitout. 3. Many businesses share support functions with other tenants, reducing the demand for space. Building owners are increasingly offering large meeting suites to entice tenants. LAW FIRMS CAN LEARN FROM TECH DISRUPTORS While 'robo-lawyers' remain in the distant future many time consuming and routine legal tasks are already being automated. To understand the impact of technology on the legal workplace, we look to other professions where technology has already had an impact. Let’s touch base again in 2020 to see if we're on track for 2030 …
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