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The popular concept of “just in time” acquisitions � the practice of delaying the purchase of inventory, personnel, and manufacturing parts until they are needed � is now taking root in the D.C. real estate market catering to law firms. Faced with rising real estate costs, many firms are avoiding the fixed costs of a larger office. Instead, they are turning to staffing companies to provide the additional space to accommodate the temporary legal personnel often required by large litigation cases. Some staffing firms are even providing this additional work space free when they provide the contingent legal staff. “The mergers taking place among law firms are requiring additional space that is hard to come by and very expensive,” says Julia Sweeney, executive director of Special Counsel Inc., which has provided legal staffing services in the District since 1992. As a result, Sweeney says, merged law firms are forced to use every square foot for their combined full-time staff. When there is a special project that requires additional legal staffing, they often have no room to accommodate them and must look for additional space. For instance, in 2002, Special Counsel decided to offer a 4,000-square-foot and 3,000-square-foot legal work space, in neighboring suites in a Connecticut Avenue building. The offices can house up to 140 people. Sweeney says much of the demand for off-site space in the District comes from law firms that need to take on additional contract attorneys and paralegals to respond to the voluminous documentation proliferated by the Department of Justice’s and the Federal Trade Commission’s “second requests” as mandated by the Hart-Scott-Rodino Antitrust Improvements Act. Second requests are generated when two large companies seeking to merge are asked by the federal agency governing their industry to submit massive information covering every possible impact the merger might have on that industry. Sweeney says that second requests can require as many as two million pages of documents to be prepared and reviewed in three to six months. As a result, the number of temporary staff needed to service these projects will dramatically exceed the normal five- to seven-member team legal counsel assigned to a traditional case. Given those demands, most law firms just do not have the internal office space to accommodate these projects, and if they do, the project ends up divided up and squeezed into different offices within the firm. That situation creates tremendous inefficiency because of the inability of the practice areas to accommodate the additional personnel. “These projects require teamwork and continuity,” says Sweeney. “They cannot be divided by separate rooms.” Normally, companies that offer legal work spaces provide not only the additional legal staff and the area in which to work but also infrastructure, such as desks, chairs, T1 lines, computers, fax machines, and telephones. The work spaces also usually offer lock and key and security code services. “Many firms are extremely cautious about letting documents out of their offices,” Sweeney says. “The additional security afforded by these work spaces assuages that concern.” Another benefit from legal work spaces is the option for rooms to be divided when necessary into separate, walled-off work spaces to maintain confidentiality in a project, as in the instances of preparing witnesses or working with federal prosecutors. Laney Altamar, director of business development for another D.C. legal staffing firm, LawCorps, says a few firms still secure their own project space, but many find that agencies offer more flexibility and accessibility. “By using a staffing agency, firms are not tied to a lease commitment that locks them in for an extended period of time,” Altamar says. “If a client reaches a settlement early or the scope of the investigation changes considerably, there is no penalty for leaving before the lease expires, because it is provided as a value-add to the client.” Altamar agrees that there are advantages to having a large team in one area instead of being separated in different rooms. “Having teams of contract attorneys split across multiple rooms can present logistical and managerial challenges,” she says. Lori DiCesare, president of Legal Placements Inc., says firms that have off-site litigation centers are usually the large ones that know they will have a certain number of cases a year requiring dedicated space for the additional contract attorneys and paralegals. “Still, even with these firms, a project can outgrow their space so they require a larger site,” DiCesare says. She says Legal Placements will lease the space and then bill it back to the client, and that her firm has agreements with several commercial properties and has never had a problem finding space in the D.C. market. “Our clients can call tomorrow looking for space, and we can have it ready by the following day,” DiCesare says. Sweeney, Altamar, and DiCesare agree that the demand for off-site litigation space is growing. They predict that demand for legal work spaces in Washington this year will exceed the demand in 2004 by at least 30 percent. Says Sweeney: “As long as demand for contract attorneys and paralegals is strong, then the demand for work space will be strong as well.” Mike Bernos is a consultant with the Axia Group, a communications consulting company based in Jacksonville, Fla.

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