Shearman Shrinks NY Headquarters, Makes Offices Single Size (1)

Shearman & Sterling has completed a two-year transformation of its longtime Manhattan headquarters, opting for in-vogue single-size offices and a smaller footprint.

The firm in January 2020 renewed its lease at 599 Lexington Ave, where it has been for three decades and is slated to remain for the next 20 years. The firm has trimmed its space from 15 to 12 floors and now occupies 340,000 square foot of the Midtown East building.

“We did reduce our footprint. We will continue to do that and at the same time, focus on healthier, better performing buildings and spaces, more quality, less ‘me’ space and more ‘we’ space,” said Arsha Cazazian-Clement, director of global real estate at Shearman. She joined the firm, which has more than 20 offices around the globe, in 2019 from commercial real estate company JLL.

Big Law’s return to the office after roughly two years of remote work has firms wondering how much space they need and what it should look like. Several law firms have already opted for a smaller footprint, like Duane Morris which in April said it plans to cut office space by more than 20% in five years.

“The second COVID hit, every head of real estate, every one of my counterparts is like, ‘Oh my God, we need to cut our portfolio by 30%,” Cazazian-Clement said. “Shearman already started doing that,” she said.

Shearman’s new single-size offices

Plans for big upgrades to Shearman’s office space began right after the firm decided to stay in the building, before Cazazian-Clement arrived, she said. The firm prioritized single-size offices after deciding on a smaller footprint with more shared space.

Then the coronavirus pandemic hit, putting building health and safety at the forefront of the design, Cazazian-Clement said.

The firm added air filtration and ionization and looked into touchless technologies across the space, she said. But, as was the case across the country, supply chain challenges and Covid issues forced the team to recalibrate during the renovation, she said.

Smaller Footprints

Law firms and others opted for short-term lease renewals during the height of the pandemic, waiting to see how office space needs might be impacted, said Jennifer Yashar, real estate partner at Fried, Frank, Harris, Shriver & Jacobson. Many have reconsidered what they want out of their offices.

“People have gotten smarter in how they’re using their space,” said Yashar, who has negotiated several large leasing deals for law firms, including Freshfields Bruckhaus Deringer’s move to 3 World Trade and Clifford Chance’s recent move to Manhattan West.

She also negotiated Fried Frank’s 2021 lease renewal at its offices at Brookfield’s One New York Plaza in lower Manhattan, which is currently undergoing a renovation of its own.

Law firms, in particular, that have moved to newer, more efficient buildings can make better use of their space given the structure and infrastructure of the buildings in places like Hudson Yards or Manhattan West, she said.

Firms are also moving to one-size offices or smaller partner spaces, even if they’re not reducing headcount.

“Their physical footprint isn’t necessarily growing, but they’re finding ways to use their space better, so that they don’t have to grow their space at the same rate that they’re growing their headcount,” Yashar said.

“You have to design and turn over more quality space—thoughtful, human-centric space—but you don’t necessarily need as much of it and it’s so dependent on the actual footprint,” Cazazian-Clement said. “It’s dependent on the asset that you decide to occupy.”

Shearman has more 200 lawyers based in its New York office, according to data from Leopard Solutions. The firm had roughly 727 attorneys across the globe and brought in over $1 billion in gross revenue in 2021, according to figures reported by the American Lawyer.

Shearman’s new office features other amenities, including a mother’s room, a wellness center for yoga and meditation, and a nurse practitioners suite on site which is currently offering Covid booster shots.

It has also created an enhanced café, lounge, library, and tech-bar, Cazazian-Clement said.

“It feels as if you are more so in a hotel than anywhere else. [You’d] never think that you were in someone’s office space,” she said.