London remains a global legal hub, rivalled only by New York, with unparalleled prestige and career opportunities that consistently attract top talent. However, we are now seeing more diversification in the sector into key regional cities, driven by the search for talent and the appeal of high-quality real estate options and the vibrant, growing ecosystems these cities offer.
Top takeaways
- London’s legal sector has driven a significant rise in demand for prime office space, and we have been seeing law firms expand into regional UK cities such as Manchester, Birmingham, Leeds, Glasgow and Edinburgh to capitalise on lower operational costs and access skilled talent. Regional cities also boast growing business ecosystems in sectors like technology and finance, providing new client opportunities.
- According to PwC’s Annual Law Firms’ Survey for 2024, 60% of the UK’s top 50 law firms now maintain a presence outside London, reflecting the broader trend of regional expansion in the legal sector. The Big Six office markets are seeing a steady increase in the number of legal deals since 2020, with 2023 29% up on the long-term average for the annual number of legal lettings.
- There is a ‘flight to quality’ within the sector, with legal firms accounting for 40% of the top ten rents achieved in the regional markets and 35% of the lettings being for prime office space. This demand for premium, high-end office spaces in cities like Leeds, Manchester, and Birmingham often results in rental rates that surpass those in other sectors.
London leads the way in legal sector growth
Since 2019, law firms across the UK have acquired almost 7 million sq ft of office space, with 2023 transaction volume reaching its highest point in over five years.
London’s legal sector has driven a significant rise in demand for prime office space, with the legal industry accounting for 20% of the market. Since the Covid-19 pandemic, this demand has only intensified as firms strive to attract and retain top talent with high-quality, amenity-rich workspaces that support hybrid and collaborative work models.
London’s status as a global legal powerhouse is a major factor, attracting firms from around the world eager to establish a foothold in one of the world’s premier financial and legal centres.
The city’s prime office spaces offer strategic proximity to international clients and top financial institutions, fuelling its role as a central hub for legal sector growth. The focus on high-end, sustainable, and flexible office designs highlights London’s position as a leader in creating modern work environments, meeting the evolving needs of both clients and employees in a competitive, post-pandemic market.
Over the past two decades, the presence of US lawyers in London has expanded from 85 to nearly 7,000, strengthening London’s role as the largest global market for US lawyers and amplifying the demand for office space.
This trend highlights the critical role that premium, strategically located office spaces play in the legal sector. As a result, the average rent for Grade A legal sector offices is now 12% higher than the city’s overall average, indicating a marked preference for quality environments that support hybrid work models.
In 2022 and 2023, several US and UK law firms secured prime office locations across London, reflecting record-breaking demand for Grade A space, which reached 1.5 million sq ft in 2022.
Major US firms such as Kirkland & Ellis and Latham & Watkins, which had occupied their former offices for over 15 years, have taken new, premium-grade spaces to maintain competitiveness and appeal to talent. Kirkland and Ellis pre-let over 300,000 sq ft at 40 Leadenhall, EC3, in 2022 and then, in 2023, went on to exercise their option on the 15th to 18th floors, taking an additional 85,000 sq ft.
In addition to Kirkland & Ellis, UK firm Allen & Overy has taken a pre-let at 1–2 Broadgate, describing it as “…a step-change in terms of energy consumption and better reflects the way we want the firm to work in the future.”
This ’flight to quality’ trend is evident in the absence of Grade B office uptake among legal firms in the past two years, highlighting the industry’s dedication to providing premium workspaces that attract top-tier talent.
While 2024 saw a slight slowdown in central London take-up by the legal sector, largely because larger firms had already met their space needs over the previous four years, there remains a substantial 650,000 sq ft of ongoing requirements in the market, illustrating continued strong levels of legal sector demand in the capital.
This focus on high-quality office space has now extended beyond London, with many of the UK’s top 50 law firms and a growing number of US firms establishing and upgrading offices in the Big Six regional cities. Approximately 60% of the UK’s top 50 law firms now have a presence outside London, highlighting the sector’s broader trend of regional expansion.
Cities like Manchester, now the UK’s second-largest legal hub, along with Birmingham, Leeds, Bristol, Glasgow, and Edinburgh, are emerging as strong contenders for legal excellence, housing global firms and providing premium office environments that meet the evolving expectations of the industry.
The Evolving Landscape of Legal Talent
London remains a magnetic hub for legal talent, boasting unparalleled career opportunities, prestigious clients, and a vibrant professional network that few cities can match. Its reputation for top-tier work and high wages continues to attract ambitious professionals, with salaries, on average, 38% higher than in other UK regions. However, regional cities are now presenting increasingly compelling alternatives, offering competitive salaries that can be more attractive when paired with significantly lower living costs.
The Big Six legal professionals can enjoy a better quality of life, where housing costs are, on average, 50% lower than in London. For example, the average rent in Manchester is £1,100 per month, compared to £2,500 in central London.
Many firms in regional areas are also investing in modern, well-designed workspaces to enhance collaboration and productivity. Additionally, regional firms are prioritising employee well-being, with over 70% offering flexible work arrangements, compared to just 60% in London firms, according to a recent survey by the Law Society.
As a result, there is a place for both London and regional cities in the legal landscape, with each offering unique advantages that appeal to legal professionals seeking fulfilling careers and a high quality of life.
Beyond London: the UK legal sector’s strategic expansion into the regions
London remains a global legal hub, rivalled only by New York, with unparalleled prestige and career opportunities that consistently attract top talent. However, we are now seeing more diversification in the sector into key regional cities. This shift is driven not only by the search for talent but also by the appeal of high-quality real estate options and the vibrant, growing ecosystems these cities offer. With sectors like tech, financial services, and creative industries thriving in these locations, regional cities have become attractive hubs for legal firms seeking sustainable growth and a competitive edge beyond London.
Regional cities are seeing a significant rise in the number of legal sector occupiers looking for real estate. The regional office markets have seen a steady increase in the number of legal deals since 2020, with 2023 seeing a 29% increase on the long-term average number of legal deals per year and the best year since 2015.
Lease expiry data also suggests that strong activity in the sector will continue over the next five years. Legal lease events in regional cities are currently tracking at 22% above the long-term annual average.
Regional expansion
Prominent firms such as DLA Piper, Eversheds Sutherland, Addleshaw Goddard, and Squire Patton Boggs showcase the growing prestige and opportunity that regional markets provide outside of London, with many cities witnessing growth within the sector.
Bristol’s knowledge-based local economy is a draw for legal firms with expertise in energy, transport and financial services. Notable examples in Bristol include Burges Salmon and TLT, both of which have invested heavily in expanding or modernising their Bristol offices. More recently, DAC Beachcroft acquired 44,000 sq ft at the Welcome Building earlier this year, and the UK’s largest regional legal services business, Knights, took new Grade A offices in Bristol’s prime office development, EQ.
In Glasgow, legal companies are making notable moves and expansions, highlighting the city’s growing role as a legal hub. Firms like CMS and Pinsent Masons are expanding their operations in Glasgow, drawn by its strategic location, competitive costs, and robust business environment. Pinsent Masons, for instance, has enhanced its presence in the city to leverage Glasgow’s skilled workforce and dynamic market. These expansions highlight Glasgow’s emergence as a key centre in the UK’s legal sector, offering significant opportunities for growth and establishing itself as a prominent player in the regional legal landscape.
GSL, a Reed Smith initiative at Leeds Platform building, was designed to foster collaboration and support start-ups by bringing together lawyers, analysts, and business services professionals. Since its inception, GSL has grown significantly and recently relocated to Globe Point as part of the Temple masterplan. The new c.7,000 sq ft office – a 37% increase in space – reflects Reed Smith’s growth and commitment to Leeds’ thriving legal market. This move aligns with a broader trend, as many legal companies, such as DLA Piper, Addleshaw Goddard, and Shoosmiths, are expanding or relocating to Leeds. With more firms recognising the city’s growing legal ecosystem, Leeds has become an increasingly attractive hub for legal services outside London.
In Manchester, Latham & Watkins expanded to leverage the city’s robust business ecosystem and strong ties to finance, tech, and media, with Kirkland & Ellis, another leading US law firm, also expanding regionally. The firm is leveraging opportunities in cities like Manchester, where access to top talent and lower operating costs make it a strategic location for growth. These expansions reflect a broader strategy by international and law firms to capitalise on cost-effective office spaces and proximity to growing industries across the UK.
Birmingham has been another hotspot for US law firms. Hogan Lovells recently bolstered its regional offices as part of its strategy to diversify its geographical footprint across the UK. More recently, international law firm Trowers & Hamlins’ Birmingham office is relocating to One Snowhill, at the heart of Birmingham’s Colmore Business District, to accommodate for its ambitious growth and sustainability strategy.
Real estate plays a crucial role in talent attraction
According to Savills recent HR survey, over three-quarters of HR professionals said that real estate plays a crucial role in attracting and retaining talent. Not only has the number of legal lettings increased in the past five years, but there is also a ‘flight to quality’ within the sector, with legal firms accounting for 40% of the top ten rents in regional markets and 35% of the lettings being for prime office space, with nearly 60% Grade A and prime combined.
This demand for premium, high-end office spaces in the Big Six cities often results in rental rates that surpass those in other sectors. By occupying premier locations in these cities, law firms not only gain proximity to their clients and key business sectors, but also contribute to the continued growth and regeneration of these regional hubs.
There are, however, concerns over the limited development pipeline of new premium spaces in regional cities, which could tighten supply, particularly as more firms expand outside of London.
Attracting and retaining talent through the best-in-class office space
According to a recent PwC UK survey, 88% of the top 100 UK law firms are concerned that a shortage of talent will prevent them from achieving their goals. This shortage, largely driven by the challenge of attracting and retaining top legal talent, is impacting operations and client service quality. However, there are positive trends in the talent pipeline, with the number of universities feeding the legal market increasing by 14% in three years. For national firms with strong regional presences, Manchester has emerged as a key recruitment hub, with graduates from northern and Midlands-based Russell Group universities playing a crucial role in supporting these firms’ regional expansion.
Insights from the latest Savills HR survey highlight the ongoing importance of physical office space in retaining talent, with employers now evolving their workspaces to meet modern employees’ needs. Many law firms are leveraging real estate as a powerful tool for talent attraction and retention.
Law firms are increasingly investing in high-quality office spaces and paying headline rents to secure premium locations that reflect their brand and meet employee expectations. Mills & Reeve, for example, recently confirmed its move to premium office space at One Centenary Way in Birmingham, where the firm will occupy 32,000 sq ft across two floors. This relocation is part of the firm’s expansion strategy as it looks to accommodate its growing team, which has grown from five to over 300 employees during its 25-year presence in the city.
Other prime developments, such as 103 Colmore Row, are setting new standards for office space and rent values, housing top law firms like Browne Jacobson and Shoosmiths, with Shoosmiths occupying 32,900 sq ft – the largest letting in the building so far.
In Manchester, firms like Hill Dickinson and Pinsent Masons are securing pre-lets at No.1 St Michael’s at record rates of £42.50 and £43 per sq ft, surpassing previous highs. Leeds and Bristol are also seeing record-breaking rents, with firms like Hill Dickinson, Irwin Mitchell, and DAC Beachcroft taking up significant space in premium developments. In Bristol, DAC Beachcroft’s move to the Welcome Building at £46 per sq ft and the new record of £48 per sq ft at the EQ Building, where Knights took space, highlights the high demand for prime, best-in-class office space.
A lack of new developments coming through in key regional cities could significantly hinder law firms’ expansion outside London
Clare Bailey, Director, Commercial Research
However, this rapid expansion across regional cities is putting pressure on the availability of quality office space. With only 1.6 million sq ft under construction across the Big Six markets over the next three years. With 29% of that space already pre-let, the development pipeline is limited. This shortfall means that firms facing upcoming lease expiries may need to begin their search for new spaces earlier than ever before, as securing suitable, modern premises becomes increasingly competitive.
The limited development pipeline presents a significant challenge for law firms aiming to expand their regional footprints, especially as the demand for Grade A and prime office space remains robust across the Big Six markets – Birmingham, Manchester, Leeds, Bristol, Glasgow, and Edinburgh.
With high occupancy rates and fierce competition for prime real estate, firms with plans for growth or lease renewals face the prospect of either adapting to less-than-ideal spaces, or competing heavily for the few premium offices that do become available. This competition could further drive up rental values, to ensure businesses attract top talent and secure prestigious locations.
Regional cities have become increasingly attractive for legal firms due to lower operating costs, a growing talent pool, and access to top-tier office spaces
Emma Morton, Director, Global Occupier Services
As hybrid working continues to reshape the office landscape, many law firms are also rethinking their spatial needs, placing a stronger emphasis on flexible, tech-enabled spaces that support both in-office collaboration and remote work arrangements. However, with the limited supply of new developments, many firms are finding that the existing stock of office space does not meet these modern requirements, leading to a surge in demand for spaces that prioritise employee well-being, energy efficiency, and advanced technology. This is particularly important as younger talent, who place a high value on work-life balance and sustainability, enter the workforce.
The scarcity of new developments also has broader implications for the legal sector’s competitiveness outside of London. Regional cities have become increasingly attractive for legal firms due to lower operating costs, a growing talent pool, and access to top-tier office spaces. Yet, without a steady supply of new, high-quality developments, the momentum driving law firms to expand regionally could slow, impacting the ability of these cities to continue to attract legal firms.