Searching for Law Firm Office Space

Searching for office space can be a time-consuming and stressful process.

We have spent more than a two dozen hours searching office space listings (craigslist, kijiji, etc.). We have spoken to numerous brokers and property managers about available space.

If you are a lawyer or paralegal searching for office space, we offer the following reflections and advice:

1. Categorizing the Options

While these may not be industry terms, you can organize office types into the following categories:
  • Business centres: typically, business centres rent out a floor or large section of office space in a tower. They offer various packages, such as answering services, shared receptionist, pay-per-use boardrooms, and actual office space on an hourly, daily, or monthly basis. We inquired at a number of business centres operated by several companies (Regus, Intelligent Offices, etc.). Although business centres can be useful for new lawyers who only require an answering service and the infrequent use of meeting spaces (virtual offices), they can lack the permanence, credibility and professionalism of a fixed business address with your name on it.
  • Separate units: finding good separate units can be a challenge. If you are looking for a small unit (with one or two offices, about 500 to 1000 square feet total), your options will likely be limited to low or medium rise buildings. Larger buildings tend to rent large spaces. Also, if you are looking for something in downtown Toronto or another high-demand area (Yonge and Sheppard, Markham’s technology/business parks), the standard seems to be 3 to 5 year leases. Good separate space can be found if you are selective, but be prepared to spend more time searching. Also, if you are looking for a small separate space, it is unlikely to include a kitchenette or a washroom in the unit.
  • Shared space with non-lawyers: you will likely find a number of advertisements by small firms who are renting out unused offices in their unit. It’s usually common for these ads to offer shared use of their boardrooms and other amenities. If you are contemplating sharing space with another organization, choose your company wisely. Shared space usually means you’ll be seeing, hearing and interacting with the other company’s staff pretty frequently.
  • Shared space with lawyers: there seems to be a number of sole practitioners who share office space on University Ave., around Yonge and Sheppard, and in the downtown core. Typically, the arrangement will include shared reception, board rooms, kitchen facilities and a separate office. One of the advantages is that you are working in the company of other lawyers. It seems like having other lawyers to bounce ideas off of and obtain advice can be a great asset, especially for a young lawyer. Sharing space with lawyers can also mean shared expenses for CLE webcasts and potential referrals.
  • Commercial lofts: loft space can add character to your practice. High ceilings, exposed brick and wood floors can seem less sterile than a typical office unit. But loft space can also mean sharing a building with residential units and a less professional atmosphere. Loft space is typically available outside of the central business district (King Street West, St. Lawrence Market, etc.)

2. Deciding on an Area

Narrowing your search to a particular area may be the first decision you make regarding office space. However, its also possible to keep your options open and view office space in a number of areas before narrowing down to a particular location.

If your practice anticipates corporate clientele, locating in a dense business district may be more accessible for your client base and may communicate the professionalism that corporate clients seek. If you expect the clientele to be individuals, a loft space or a suburban office may help you market to a particular neighbourhood or community. In either case, deciding on an area is an important decision that should be made after some research and planning.

3. Negotiating a Lease

It is imperative to be familiar with and understand fully the terms of the lease offered before signing. Obtaining advice from a commercial real estate lawyer or broker may be necessary if you are not well-versed in negotiating commercial tenancies. Ontario’s
Commercial Tenancies Act governs offices leases in the province. Items to consider when negotiating a lease include:
  • Ensuring that the square footage advertised is what you are actually getting
  • Length of the lease period
  • Type of lease: net or gross lease: will the rental rate include utilities, TMI(taxes, maintenance and insurance). Ensure that the lease is clear about who is paying for what
Inclusion of tenant-favourable clauses:
  • Right of first refusal/renewal clause: a right of first refusal or of renewal of the lease term can be negotiated with the landlord
  • Set rent increase provisions
  • Absence of a personal guarantee (although most landlords will insist on one)
Exclusion of landlord-favourable clauses:
  • Escalation clause: allows rent to increase anytime over the term of the lease
  • Harsh penalties for late payments: $2.50 per day for late rent is reasonable, but $20 per day is unrealistic

4. Other Considerations

There are a huge number of considerations that you may use in selecting an office. Here are just a few:
  • Commuting time
  • Nearby restaurants and entertainment
  • Availability of amenities
  • Parking (for staff and/or client)
  • After hours access
  • High speed internet, phone, etc.
  • Individual landlord/building manager
  • Access to public transit
  • Lease term
  • Type of other businesses in the building
  • Signing bonuses
  • Structural features/architecture of building