Legal Sector Advisory Group_BROCHURE

LEGAL SECTOR ADVISORY GROUP

REIMAGINING THE WORKPLACE OF THE FUTURE

TOC

PG. 4 / POST-ENGAGEMENT PROCESS

PG. 6 / PHASE 1: PORTFOLIO REVIEW

PG. 10 / PHASE 2: CONSENSUS BUILDING

PG. 14 / PHASE 3: MARKET IMPLEMENTATION

PG. 16 / EXPERIENCE

PG. 18 / OUR TEAM

3

POST ENGAGEMENT PROCESS Cushman & Wakefield will implement a detailed process to define objectives, analyze opportunities, and implement a firmwide strategy to effect change. The primary focus will be to build consensus amongst all partners, attorneys, and executives surrounding the business objectives and real estate strategy.

PHASE 01

PORTFOLIO REVIEW

Cost Exposure Understanding Occupancy Analysis Attorney / Partner Cost Impact

4

PHASE 03

CONSENSUS BUILDING Vision Session(s) Attorney Surveys Efficiency Matrices

MARKET IMPLEMENTATION Effect Change Streamline Operations Improve Profitability

PHASE 02

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PHASE 1 PORTFOLIO REVIEW

Location

Lease Exp. Current Size Projected Size

Boca Raton

Jan-21

54,670

40,500

Cushman & Wakefield will aggregate all portfolio data, while simultaneously obtaining current market conditions from our brokers within the Legal Sector Advisory Group. Once all information is obtained, a simplified dashboard will be created to highlight key dates (lease expirations, termination options, renewal options) as well as potential capital exposure in the coming years.

Washington, DC Jan-21

47,054

32,250

Boston

Mar-21

52,432

39,750

Wilmington

Sep-21

41,317

29,250

Chesterbrook

Feb-22

42,704

30,000

Princeton

Jun-22

63,750

25,500

Salt Lake City

Jun-23

53,809

44,250

Pittsburgh

Sep-23

27,036

26,250

New York

Mar-24

43,569

32,250

West Palm Beach

Apr-24

53,083

39,000

Newark

Jun-24

50,102

36,750

Chicago

Jan-25

48,862

38,250

Philadelphia

Sep-25

40,654

29,250

TOTALS

619,042

443,250

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SAMPLE SHORT & LONG-TERM CAPITAL BUDGET

Number of Attorneys

Current or Projected Status

All-In Law Firm Transaction Costs

Provided by Landlord

Total Potential Exposure

2020

2021

2022

2023

2024

54

In Process

$225.00 / RSF $175.00/RSF $2,025,000

$2,025,000

43

In Process

$225.00 / RSF $187.50 / RSF $1,209,375

$1,209,375

53

In Process

$5.00 / RSF

$5.00 /RSF

$0

$0

Projected Renewal

39

$15.00 / RSF $15.00 / RSF

$0

$0

Projected Renewal

40

$225.00 / RSF $225.00 / RSF

$0

$0

34

Monitor

$15.00 / RSF $15.00 / RSF

$0

$0

49

Monitor

$225.00 / RSF $175.00 / RSF $3,540,000

$3,540,000

Possible Relocation

35

$225.00 / RSF $175.00 / RSF $1,309,500

$1,309,500

Possible Relocation

43

$275.00 / RSF $175.00 / RSF $3,225,000

$3,225,000

Monitor/ Renewal

52

$15.00 / RSF $15.00 / RSF

$0

$0

Monitor/ Renewal

49

$15.00 /RSF $15.00 / RSF

$0

$0

Possible Relocation

51

$225.00 / RSF $175.00 / RSF $1,912,500

$1,912,500

Monitor/ Renewal

39

$15.00 / RSF $15.00 / RSF

$0

$0

581

$13,221,375

$3,234,375 $3,225,000 $3,540,000 $1,309,500 $1,912,500

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PHASE 1 PORTFOLIO REVIEW

DGS EFFICIENCY AND COST

FULLY ESCALATED 2019 RENT

FULL 2

By analyzing current firmwide efficiency standards, Cushman & Wakefield will clearly illustrate potential future cost savings. As the legal sector embraces an increased flexible work schedule, the ‘target’ square feet per attorney ratio will become even more dense, which will allow firms to relocate to higher- quality assets while maintaining a similar aggregate annual rent obligation.

FULL SERVICE MARKET RENT VARIABLES

$41.41

850 SF/ATTY

$35,199

800 SF/ATTY

$33,128

CURRENT OCCUPANCY 756 SF/ATTY

$31,297

700 SF/ATTY

$28,987

650 SF/ATTY

$26,917

600 SF/ATTY

$24,846

TARGET OCCUPANCY 550 SF/ATTY

$22,776

500 SF/ATTY

$20,705

450 SF/ATTY

$18,635

Notes • Lease Expiration: 4/30/2024

• 2019 Fully Escalated Rent: $23.50/SF NNN (OpEx: $17.91/SF) • 2024 Fully Escalated Rent: $26.00/SF NNN (OpEx: $18.06/SF) • Assumed Annual OpEx 3% Escalation

ANNUAL RENT ($44.06/S

ANNUAL RENT PER PART

ANNUAL RENT PER PART OVER 15 YEARS

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T MATRIX

LY ESCALATED 2024 RENT

NEW DEVELOPMENT

$44.06

$48.00

$52.00

$56.00

$58.00

$60.00

$37,451

$40,800

$44,200

$47,600

$49,300

$51,000

$35,248

$38,400

$41,600

$44,800

$46,400

$48,000

$33,300

$36,288

$39,312

$42,336

$43,848

$45,360

$30,842

$33,600

$36,400

$39,200

$40,600

$42,000

$28,639

$31,200

$33,800

$36,400

$37,700

$39,000

$26,436

$28,800

$31,200

$33,600

$34,800

$36,000

$24,233

$26,400

$28,600

$30,800

$31,900

$33,000

$22,030

$24,000

$26,000

$28,000

$29,000

$30,000

$19,827

$21,600

$23,400

$25,200

$26,100

$27,000

2024 Occupancy 146 Attorneys 756 SF/attorney or 110,346 SF

Future “Right Sizing” 146 Attorneys 550 SF/attorney or 80,300 SF

± $325,000 “Right-Sizing” Impact Per Partner Over 15 Years

$4.86 million

$3.54 million

SF)

$79,700

$58,000

TNER (61)

TNER

$1,195,000

$870,000

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PHASE 2 CONSENSUS BUILDING

BUSINESS

The Vision Session, a process Cushman & Wakefield exclusively developed for its legal sector clients, provides a forum to closely evaluate and discuss established key drivers and goals. The session consists of a two- to three-hour work session, which typically includes the Management Committee and Real Estate Committee (if determined), comprised of key firm leaders and future leaders. Cushman & Wakefield will customize the Vision Session and moderate the session to engage in an open discussion to build consensus regarding the goals and objectives surrounding your business, financial, and operational drivers.

OPERATIONAL

FINANCIAL

BUSINESS

Competition

» » » » » » » » » » »

Business Growth Business Synergies

Competitive Fee Structures

Retention & Recruiting

Brand & Image

Risk Management

Profitability

Culture & Diversity Succession Planning

Real Estate Supports Business

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BUSINESS

BUSINESS

OPERATIONAL

OPERATIONAL

FINANCIAL

FINANCIAL

FINANCIAL

OPERATIONAL

Real Estate as a % of Revenue Per Attorney Occupancy Costs Equity Partner Cost & Savings

Other Industries

» » » » » » » »

» » » » » » » » » »

Right Sizing & Ratio Changes Space Flexibility / Densification

Capital Costs & Funding

Design Standards

Un-depreciated Capital Costs

Training / Technology

Lease Securitization

Common Areas / Natural Lighting

Generational Profitability

Paper Management

Lease Flexibility

Generational & Profit Impact

Consensus Buildings

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PHASE 2 CONSENSUS BUILDING

What areas will most impact the future of the legal industry? Respondents chose multiple options

As part of the Vision Session process, Cushman & Wakefield will also confidentially survey all attorneys (both partners and associates), as well as benchmark the results against national statistics to provide a sense of how the priorities and drivers of each generation of lawyers integrate into the overall strategy and workplace designs. This survey will assist in better understanding attorney goals and pain points from a firmwide perspective to better effect change for the future.

Fixed-fee/compression

Shift in client demands

61%

Attorneys (young and old) leaving the industry

29%

In-house counsel departures

26%

Global competition

21%

Boutique firm growth

16%

US Government

9%

Other

8%

Global governments

12

What are the primary reasons you believe your lawyers and staff will be hesitant to return to the workplace?

Health issues/high risk for virus

Current remote work is adequate

29%

1

5%

6

Associates were asked: How important are the following to you personally? (1 = Most Important; 9 = Least Important)

5

6%

2

Safety of space

1 2 3 4 5 6 7 8 9

4

78%

COMPENSATION

7%

3

Children won’t be back in school

26%

Emotionally not ready

74%

COLLEGIAL WORK ENVIRONMENT

21%

Taking public transportation

WORK/LIFE BALANCE

How diverse is your firm? (considering race, gender, sexual orientation, and religion)

MENTORING BY SENIOR ATTORNEYS

10%

EXPOSURE TO CLIENTS

15

5%

FLEXIBLE WORK SCHEDULE

BUSINESS DEVELOPMENT OPPORTUNITIES

19%

17%

4

2

POTENTIAL FOR PARTNERSHIP

PRIVATE OFFICE

3

48%

1

2

3

4

5

Not diverse at all

Somewhat diverse

Very diverse

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PHASE 3 MARKET IMPLEMENTATION Following an extensive portfolio review and consensus building process, Cushman & Wakefield will apply the information learned into the market implementation phase. Cushman & Wakefield also utilizes a multitude of technology platforms to assist with all aspects of portfolio management ranging from aggregating leases and key dates to 3D space visualization. This is an extremely streamlined process that ensures all information is readily available to make informed decisions from both a micro and macro perspective.

BUILD THE TEAM

FIRST 30 DAYS

DAY 1

TEAM KICK- OFF MEETING

LEASE MANAGEMENT COORDINATION

PORTFOLIO BUSINESS REVIEW

BEST-IN-CLASS TECHNOLOGY

Transactions & Leasing

Data Visualization

Workplace Design

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DEVELOP PORTFOLIO CONTENT/ METRICS/ STRATEGY

FINAL STRATEGY & IMPLEMENTATION

PRESENTATION TO FIRM

120 DAYS

NEXT 30 DAYS

NEXT 60 DAYS

READY TO GO!

VISION SESSION

SURVEY ANALYSIS

ARCHITECT COORDINATION

ATTORNEY SURVEYS

Occupancy & Workplace

Project Management

Data Warehouse Integration Hub

Data Movement

Workplace & Change Management

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PRO VEN SUC CESS

16

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OUR TEAM

ACCOUNT MANAGER STEVE BILLIGMEIER

FINANCIAL CONSULTANT OLAN YOUNG

WORKPLACE CONSULTANT MIKE MCDERMOTT

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ACCOUNT MANAGER SHERRY CUSHMAN

TRANSACTION MANAGER ROB BAIN

TRANSACTION MANAGER SID DIXON

WORKPLACE CONSULTANT DEB MORITZ

PROJECT MANAGER SUSAN LAGANKE

PORTFOLIO ADMINISTRATOR ANASTASIA FRENCH

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1401 Lawrence Street, Suite 1100 / Denver, Colorado 80202 / phone +1 303 292 3700 / cushmanwakefield.com