Law Firm Leasing Activity Hits Record High in First Half of 2025
Skyrocketing Leases Signal Robust Legal Sector
U.S. law firms are making waves in the commercial real estate market, leasing a staggering 10 million square feet of office space in the first half of 2025. This unprecedented surge, reported by Cushman & Wakefield, marks the strongest start to a year on record, driven by firms’ commitment to in-person work and premium office spaces.
A Legal Sector Boom Amid Office Market Challenges
Record-Breaking Numbers
In Q1 2025, law firms leased 4.6 million square feet, a 25% increase year-over-year, followed by 5.4 million square feet in Q2, according to Savills and Cushman & Wakefield. This brings the total to 10 million square feet, surpassing the previous high of 5.9 million square feet in the first half of 2018. The legal sector now accounts for 8.4% of office leasing in the top 10 U.S. markets, up from 4.9% in 2022.
Key Markets Leading the Charge
New York City dominates, capturing 28.7% of Q2 leasing volume, with high-profile deals like Mayer Brown’s 330,662-square-foot renewal and expansion at Rockefeller Center. Washington, D.C., follows with 14.2% of national deals, while Boston saw a 332% year-over-year increase, driven by firms like Ropes & Gray’s 413,000-square-foot lease at Prudential Tower. Philadelphia and Dallas/Fort Worth also reported doubled leasing activity compared to 2024.
Why the Surge?
The legal sector’s leasing boom stems from several factors. First, law firms are enforcing stricter office attendance mandates, requiring attorneys to work in-person three to four days a week. “The momentum continues for law firms, which are very office-centric,” says David Smith, head of Americas Insights at Cushman & Wakefield. Second, a 13.6% increase in lawyer headcount since 2020 has fueled demand for larger spaces. Finally, a softer office market has allowed firms to secure premium Class A spaces at favorable rates.
Shifting Trends in Law Firm Real Estate
From Downsizing to Expansion
The trend of shrinking office footprints, prevalent in the 2010s, has slowed. In Q1 2025, 33% of law firm leases were expansions, while only 25% involved downsizing, a sharp drop from 37% in 2021. For instance, Kirkland & Ellis expanded by 131,000 square feet in New York, signaling confidence in long-term office needs. However, some firms, like Duane Morris in Philadelphia, trimmed space by 45,000 square feet while modernizing offices.
Focus on Premium Spaces
Law firms are prioritizing high-quality, Class A office buildings, which accounted for 67.6% of leasing activity in Q2. These spaces offer modern amenities like wellness centers and collaborative areas, aligning with firms’ goals to attract talent and clients. “Law firms are committed to spaces that enhance client value and employee experience,” notes Thomas Fulcher, vice chairman at Savills. This shift contrasts with broader office market struggles, where vacancy rates hit 22.2% in some regions.
Impact on the U.S. Economy and Workforce
Economic Ripple Effects
The legal sector’s leasing surge is a bright spot for the U.S. office market, which faces record-high commercial mortgage-backed securities delinquency rates of 11.7% in 2025. Law firms’ demand for premium spaces supports urban economies, particularly in cities like New York, Boston, and Washington, D.C., by boosting property values and local businesses. However, rising rents for Class A spaces—up 3.3% year-over-year to $36.40 per square foot in New Jersey—could strain smaller firms.
Lifestyle and Workforce Implications
For U.S. workers, the push for in-office mandates reflects a broader return-to-office trend, impacting work-life balance. Lawyers and staff face increased commuting costs and time, but modernized offices with amenities may improve workplace satisfaction. The leasing boom also signals job growth, with legal employment up significantly since 2020, offering opportunities for young professionals in major markets.
Political and Market Context
The legal sector’s resilience contrasts with broader economic uncertainties, including Trump’s tariffs and trade tensions. While law firms thrive, other industries face leasing slowdowns due to tariff-related supply chain disruptions. If 2025’s leasing pace continues, it could stabilize urban office markets, countering tariff-driven economic headwinds.
What Experts and the Public Are Saying
David Smith of Cushman & Wakefield emphasizes, “The legal sector’s leasing activity outpaces 2019 levels by 35%, setting it apart from other industries.” On X, analysts note that law firms’ focus on premium spaces reflects confidence in long-term growth, though some express concern about rising costs for smaller firms. Public reactions highlight mixed sentiments: urban workers welcome modern offices but lament stricter attendance policies.
Looking Ahead: A Record-Breaking Year?
If the current pace holds, 2025 could mark the fourth consecutive year of record-breaking law firm leasing, potentially exceeding 2024’s 10.2 million square feet. However, challenges like rising operational costs and limited new construction may temper growth. Law firms are likely to continue favoring flexible, high-quality spaces to balance talent retention and client demands.
This surge underscores the legal sector’s pivotal role in revitalizing U.S. office markets. As firms invest in premium spaces, they signal a robust future for urban economies, even amidst broader market uncertainties. Keep an eye on major markets like New York and Boston for more blockbuster deals in the second half of 2025.