The business of negotiating law firm office leases is in flux, with firms losing their edge over landlords for the first time in seven years, according to the latest edition of real estate services firm Jones Lang LaSalle‘s annual analysis of law firm real estate trends. As with most other real estate matters, the latest market twist is largely a function of one factor: location, location, location.

“That leverage in most markets now has started to diminish more and more as the recovery continues,” says John Sikaitis, JLL’s managing director of office research. “If law firms were concentrated in suburban office parks, they would still have leverage, but they’re concentrated in downtown, Class A, urban space.”

In 2012 JLL labeled conditions in nearly two-thirds of the markets it tracks as favorable to law firms. This year, that figure has fallen to just under half. As bad as that sounds, things are due to get worse. By 2015, the brokerage estimates, only 7 percent of the markets it surveys will be considered favorable to law firms.

With revenue largely stagnant in recent years, the power of law firms—which, according to sibling publication, spend an average of 6.2 percent of their gross revenue on office space—to squeeze discounts and perks out of landlords has been helpful to hard-pressed bottom lines. After all, anything that trims what is the second-largest expense line after payroll for most firms, be it money to improve a property or several months of free rent in exchange for signing a long lease, makes a difference.

Now, against a backdrop of rising rents and a diminished ability to haggle, firms are increasingly latching onto another market trend by reducing the per-attorney square footage they require, this year’s JLL survey finds. Plush corner offices, sizable libraries, and spacious filing rooms are disappearing as firms move toward bolstering their digital storage capabilities and standardizing the size of lawyers’ offices. On average, according to JLL, law firms that moved into new offices last year took on 7.1 percent less space than they occupied at their previous locations.

The shrinkage, Sikaitis says, will continue: “Law firms still haven’t migrated culturally to putting associates in the interior to utilize that space to a maximum extent. But they’re looking for smaller, shallower floor plates. That trend has not disappeared whatsoever.”

Below, we recap 2013 law firm leasing activity in a dozen major law firm markets described in JLL’s Law Firm Perspective Report—and offer a preview of what’s on the horizon in those cities.

Recent deals: Bryan Cave renewed 152,400 square feet at 1201 West Peachtree Street in the city’s popular Peachtree corridor. Hunton & Williams renewed 45,700 square feet nearby, at 600 Peachtree Street.
Am Law 200 firms on the prowl: Fish & Richardson (25,000 square feet sought).
Average asking price for Class A space: $29.80 per square foot.
Outlook: Law firm leasing activity has been quiet for the past two years in Atlanta, where firms occupy 11 percent of the Class A space. Not many firm leases are due to be renewed in the near future, but for those looking, few large blocks of available space means that landlords have begun cutting back on concessions.

Recent deals: Goodwin Procter is relocating its headquarters from the city’s Financial District to 2 Harbor Street Drive in the Seaport District, downsizing from 415,000 square feet to 360,000 square feet in the process. Skadden, Arps, Slate, Meagher & Flom is also relocating and shrinking its footprint, from 60,000 square feet to 48,000 square feet at 500 Boylston Street in the city’s Back Bay neighborhood.
Am Law 200 firms on the prowl: Choate Hall & Stewart (250,000 square feet).
Average asking price for Class A space: $50.67 per square foot.
Outlook: Law firms have started following their high-tech and life sciences clients to the Seaport District, where opportunities to create customized space abound. Landlords throughout the city are less likely than they have been in the past to offer concessions like free rent and tenant improvement allowances.

Recent deals: McDermott Will & Emery signed a lease to relocate in a few years to 225,000 square feet at 444 West Lake Street, the city’s first new office tower since 2009. Dentons is moving within its building at 233 South Wacker Drive to 204,700 square feet. Lewis Brisbois Bisgaard & Smith renewed and expanded the lease on its Windy City office at 550 West Adams Street to 54,800 square feet.
Am Law 200 firms on the prowl: Holland & Knight (100,000 square feet); Seyfarth Shaw (200,000 square feet).
Average asking price for Class A space: $36.41 per square foot.
Outlook: Of the top 25 law firms in Chicago, 15 have either downsized or subleased out portions of their existing space in recent years. Firms looking for more than 100,000 square feet have few options currently, though the opening of the new River Point development that McDermott is moving into will change that.

Recent deals: Dykema Gossett and Miller, Canfield, Paddock and Stone both renewed their headquarters offices for 85,000 square feet at 400 Renaissance Center and 70,000 square feet at 150 West Jefferson, respectively. Foley & Lardner renewed its lease for 44,000 square feet at 500 Woodward Avenue.
Am Law 200 firms on the prowl: Honigman Miller Schwartz and Cohn (9,000 square feet).
Average asking price for Class A space: $22.60 per square foot.
Outlook: Not too many law firms are coming or going in Detroit, and some smaller firms are venturing into the suburbs outside the beleaguered city’s central business district. The city’s Class A vacancy rate is among the highest in the country, meaning that landlord are being generous with concessions but that firms are also limited to second- and third-generation space.

Recent deals: Baker & Hostetler is relocating to 75,700 square feet at 811 Main Street.
Am Law 200 firms on the prowl: Akin Gump Strauss Hauer & Feld (75,000 square feet); Gardere Wynne Sewell (100,000 square feet).
Average asking price for Class A space: $39.20 per square foot.
Outlook: Nearly half The Am Law 100 now have Houston offices as firms chase the local boom in energy-related work. As a result, available space is at a premium, landlords have the upper hand in lease negotiations, and law firms often must commit to longer leases than they would like.

Los Angeles
Recent deals: Blank Rome relocated to 25,700 square feet at 2029 Century Park East in Century City. Not far away, Barnes & Thornburg relocated to 25,300 square feet at 2049 Century Park East.
Am Law 200 firms on the prowl: Nixon Peabody (75,000 square feet); Sidley Austin (250,000 square feet); White & Case (50,000 square feet).
Average asking price for Class A space: $41.99 per square foot.
Outlook: Law firms continue to switch offices in the largely tenant-friendly locale, where the supply of available space both downtown and in Century City outstrips demand and the concession packages being offered by landlords are more generous than ever. (In a city where the car is king, those central business districts continue to be plagued by steep parking costs.)

Recent deals: Weil, Gotshal & Manges renewed 24,000 square feet at 1395 Brickell Avenue.
Am Law 200 firms on the prowl: GrayRobinson (35,000 square feet); White & Case (60,000 square feet).
Average asking price for Class A space: $40.46 per square foot.
Outlook: While the concessions being offered to firms either renewing leases of moving into new space are shrinking, rent remains on par with what it was nearly seven years ago, and landlords are still offering generous tenant improvement allowances.

New Jersey
Recent deals: Drinker, Biddle & Reath is relocating to 60,000 square feet at 600 Campus Drive in Florham Park. Edwards Wildman Palmer moved to 22,200 square feet at 44 Whippany Road in Morristown. DLA Piper is relocating to 22,000 square feet at 51 JFK Parkway in Short Hills.
Am Law 200 firms on the prowl: Sills Cummis & Gross (80,000 square feet).
Average asking price for Class A space: $27 per square foot.
Outlook: Law firm sprawl has spread across several suburbs in New Jersey, with many firms located along the Route 24 corridor. Though the aging office market contains many buildings dating to the 1980s, firms generally find favorable leasing opportunities in the Garden State.

New York
Recent deals: Many firms chose to renew leases to avoid significant Manhattan relocation costs, including Simpson Thacher & Bartlett staying in 595,800 square feet at 425 Lexington Avenue, Patterson Belknap Webb & Tyler in 198,000 square feet at 1133 Avenue of the Americas, and Baker Botts in 104,200 square feet at 30 Rockefeller Plaza. Though not noted by JLL, The Am Law Daily recently reported on Mayer Brown’s plans to move to 187,000 square feet at 1221 Avenue of the Americas and Hughes Hubbard and Reed inking a 226,400-square-foot lease renewal at One Battery Park Plaza.
Am Law 200 firms on the prowl: Jones Day (400,000 square feet); Weil, Gotshal & Manges (500,000 square feet); White & Case (400,000 square feet).
Average asking price for Class A space: $74.26 per square foot.
Outlook: Law firms continue to balk at moving downtown, despite the area’s considerably cheaper rents, though new construction could eventually lure firms there and to the developing Hudson Yards area on the west side of Midtown. Demand from other industries will continue push rents, already among the nation’s priciest, higher and make it even harder for firms to find favorable deals.

Recent deals: Pepper Hamilton renewed at Two Logan Square for 268,000 square feet. Drinker, Biddle & Reath shrunk 25 percent to 155,000 square feet while renewing at One Logan Square. Akin Gump expanded to 18,000 square feet in its Two Commerce Square renewal.
Am Law 200 firms on the prowl: None, according to JLL.
Average asking price for Class A space: $27.43 per square foot.
Outlook: Law firms occupy 20 percent of the city’s Class A space, much of it in the Market Street West area. Law firm lease activity slowed in 2013 following the market’s busiest year since the late 1990s. With few quality blocks of space available, tenants shopping for offices in the city have little leverage and face increased competition for the space that is available in the 25,000-50,000-square-foot range.

San Francisco
Recent deals: Gordon & Rees renewed 50,200 square feet at 275 Battery Street. McKenna Long & Aldridge sublet 42,300 square feet in One Market Plaza. Allen Matkins Leck Gamble Mallory & Natsis renewed its lease for 39,800 square feet at 3 Embarcadero Center.
Am Law 200 firms on the prowl: Cooley (150,000 square feet); Fenwick & West (60,000 square feet).
Average asking price for Class A space: $57.63 per square foot.
Outlook: This year was among the most stagnant in a decade in the city’s law firm lease market. Firms, which occupy just under 7 percent of the city’s Class A offices, compete with technology companies for large blocks of space. New construction will provide more options for larger firms able to pay top-dollar rent.

Washington, D.C.
Recent deals: Arnold & Porter is relocating to 375,000 square feet at 601 Massachusetts Avenue, NW. Sidley Austin renewed 289,000 square feet at 1501 K Street, NW. Pillsbury Winthrop Shaw Pittman is relocating to 108,000 square feet at 1200 17th Street, NW.
Am Law 200 firms on the prowl: Proskauer Rose (75,000 square feet); Reed Smith (80,000 square feet); Steptoe & Johnson (260,000 square feet).
Average Class A asking rent: $59.50 per square foot.
Outlook: Firms dominate D.C.’s Class A market, taking up 45 percent of that space. Movement among firms is expected to soar as the two-year period between 2016 and 2017—when a total of 4 million square feet in office space leased by law firms is set to expire—approaches.