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After a series of recent layoffs and cuts, including plans to close its Austin, Texas, office and cut corporate transactional lawyers, Fish & Richardson is moving its Boston flagship office from the Financial District to the less costly South Boston waterfront.
The firm signed a lease for a 124,000-square-foot space at One Marina Park Drive at Fan Pier in a 3-million-square-foot project under construction next door to the Boston federal courthouse. Three office buildings, a five-star hotel, restaurants, retail stores and luxury residential buildings are on the drawing board for the waterfront space in a neighborhood typically called the Seaport.
The firm plans to move from it 96,000-square-foot space at 225 Franklin Street in phases, starting in the third quarter of 2010.
The building's efficiencies, proximity to the courthouse and accessibility to the Financial District and public transportation options "made Fan Pier the most natural choice," said Timothy French, managing principal of the firm's Boston office, in a statement.
"Over the past several years as the practice of law has changed, successful law firms are adapting to new ways of conducting business," stated French. "In order to succeed in today's ever-changing business environment and position themselves for the future, law firms need office space that is efficient today and flexible enough to accommodate future growth and adapt to continuous change."
Neither the firm nor the Boston-based developer of the project, The Fallon Co., would disclose the financial terms of the lease.
The Boston Business Journal reported that the firm is paying $48 to $49 per square foot, according to multiple unnamed real estate sources. The business journal also said the "rock-bottom" rate of under $50 per square foot is "unheard of" for Boston office space that's never been used.
Rents in Boston's Financial District, where most major law firms rent space, are currently hovering around $52 per square foot, said Rick Cleveland, the Boston-based director of research services for New York's Cushman & Wakefield Inc. That compares with a couple of dollars less per square foot in the fashionable Back Bay, where a few law firms have space, he said.
Existing Seaport district buildings, which generally "are not of the caliber of Fan Pier in terms of new construction amenities" rent for the low to mid $40s per square foot, Cleveland said. "It's always tough to compare things in the Seaport with [the Financial District], but anytime anybody can get below $50 a square foot they're certainly happy about it," Cleveland said.
The rates that Cushman & Wakefield reports reflect the average asking rent, not including concessions or improvements a landlord might give tenants after they commit to a lease, Cleveland said.
Although Cleveland didn't want to comment directly on Fish & Richardson's deal, he said new construction commands a higher premium. "The owner would need to try to get as high a rent as possible as they can to balance out their construction costs and the costs for developing the building," Cleveland said. If the $48 per square foot rate is correct, it's a little less than what the firm could pay in the Financial District and "quite a bit less" than what it would pay if it moved to One Franklin, a mixed-use project under construction at the former Filene's department store in downtown Boston.
Fish & Richardson plans to trim about 40 lawyers from its roster by the end of the year by closing its Austin office and jettisoning corporate transactional lawyers across the firm.
In May, The Am Law Daily, a National Law Journal affiliate publication, reported that the firm laid off 35 lawyers and 85 support staffers.
The firm also lost 49 attorneys and technology specialists from November 2008 through January through a combination of layoffs and departures.
