The U.S. office market’s post-pandemic narrative is splitting: while tech and finance tenants shrink footprints, law firms are actively expanding. As of Q3 2025, law firms command 10.5% of all national leasing—a historic high—doubling their pre-2020 share. This surge, propelled by mandatory in-person policies and a flight to premium space, has become a rare tailwind for Class A office owners amid persistent vacancy and capital market skepticism. Law firm leasing is now a critical metric for underwriting, asset pricing, and capital flows in gateway cities.

Law firms have emerged as the anchor tenant group in a subdued office market. Nationwide, they leased 8.3 million square feet through Q3 2025, holding stable versus 2019 levels despite broader leasing declines. Savills data highlights that 37% of these deals involved space expansions—contrasting with the broader office trend of contraction. In major metros, this activity is even more pronounced: Moore & Van Allen’s new 206,000 sq. ft. Charlotte HQ marks a 25% footprint jump, while Latham & Watkins renewed or expanded in both San Francisco and New York, committing to long-term, high-value space. These expansions rely on robust partner demand for in-person collaboration, legal apprenticeship, and client confidentiality—features remote models struggle to replicate.

“Productivity and mentorship suffered when we went hybrid. We needed everyone back,” shared a Dallas law firm managing partner.

Law firms are overwhelmingly clustering in Class A and trophy buildings. Over 95% of new leases were inked in prime properties featuring modern amenities and prestige locations. Tenant improvement (TI) packages are rich, often exceeding $150/sf, as landlords compete fiercely for these coveted credit tenants. In urban cores like DC, NYC, and Chicago—where law firm presence is dense—this demand has stabilized leasing volumes and prevented vacancy from climbing further. By contrast, Class B and C buildings remain under pressure, as legal tenants bypass older stock or demand costly upgrades. The result: a widening bifurcation between “have” and “have-not” office assets.

The law firm surge is not lost on lenders and investors. Class A towers with significant law firm tenancy (30%+ AmLaw 100 occupancy) are viewed as relative safe havens, often trading at cap rates ~25 bps tighter than tech-heavy peers. Debt terms are more favorable: 50–60% LTV and slightly relaxed debt yields, reflecting confidence in long-term lease stability (typically 10–15 years with annual 2.5% rent steps). However, landlords must budget for high upfront costs—concessions and TIs are at record highs, compressing net effective rents even as face rates hold. Markets with minimal legal presence, or heavy exposure to shrinking sectors, see little of this benefit.

Looking ahead, legal sector demand is expected to remain steady, with law firms likely holding 8–12% of national leasing in 2026. Many firms have now “right-sized” for in-office mandates, tempering further expansion but sustaining a higher base demand. As law firms upgrade into new buildings, older assets risk further vacancy, requiring conversion or repositioning. Should economic conditions deteriorate, law firms may pause growth or sublease excess space, but their cultural and operational model suggests offices will remain central. Cities with deep legal ecosystems will see the greatest stabilization; elsewhere, vacancy and distress will persist until other sectors return.

Demand isn’t dead; it’s just concentrated—quality, credit, and culture, not quantity, are now the office market’s true currency.