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In an effort to reduce its real estate overhead costs and promote flexible work arrangements, Faegre Baker Daniels is downsizing its office in South Bend, Indiana. The Am Law 100 firm is moving from 40,000 square feet of space at the 14-story Key Bank Building to a mere 551 square feet at a co-working space across the street from the University of Notre Dame.

“We know that clients are more and more interested in making sure that they’re getting value,” said Thomas Froehle Jr., the firm’s newly appointed managing partner. “We think they want us to make sure we’re operating our businesses like they do and being efficient with how we allocate overhead. So if we can find ways to reduce our overhead cost then obviously it allows us opportunities to provide more value to clients.”

Faegre Baker Daniels, which was formed in 2012 through a merger between Indianapolis-based Baker & Daniels and Minneapolis-based Faegre & Benson, has occupied its South Bend space since 2007. Baker & Daniels signed a 15-year lease at the Key Bank Building that year as the firm looked to consolidate its operations across Northern Indiana.

However, the firm has occupied only 60 percent of the 40,000 square feet of space it took in the downtown high-rise, said Froehle, who became CEO of Baker & Daniels in 2008. So when its lease renewal came up, the firm chose to move its 14-lawyer office to a smaller space at Innovation Park, a business incubator affiliated with Notre Dame, the well-known Catholic university that has been a client of the firm. (John “Jack” Swarbrick Jr., Notre Dame’s athletic director, is a former Baker & Daniels partner.)

Faegre Baker Daniels, the only nonstartup tenant at the innovation complex, will have a dedicated amount of flexible office space—an increasingly popular facet of the changing real estate footprint of large law firms—and have access to the building’s conference rooms and additional work spaces, Froehle said. In addition, Faegre Baker Daniels will equip its South Bend lawyers with home office setups and allow them to utilize the firm’s other nearby offices in Chicago and Indianapolis.

“We thought this was a really good way for us to sort of offer flexible opportunities to make sure that we were able to continue to keep our talent [in South Bend] and also serve the clientele we’ve been serving there for many years,” said Froehle, who assumed the top leadership role at Faegre Baker Daniels in March from current chairman emeritus Andrew Humphrey.

There were some lawyers, however, who won’t be making the move to new South Bend space. In May, longtime public finance partner Randolph Rompola left Faegre Baker Daniels for Hoosier State rival Barnes & Thornburg. Rompola, who did not return a request for comment, is now a government services and finance partner at Barnes & Thornburg in South Bend.

Faegre Baker Daniels’ South Bend shuffle won’t be the last office relocation for the 650-lawyer firm. Froehle said the firm will be evaluating all of its real estate expenditures to ensure efficiency and flexibility, something that coincides with the changing costs of doing business in the high-end market for legal services.

“Some of the infrastructures that law firms have generally built in [are] just less important to clients anymore,” Froehle said. “So obviously the day-to-day service is going to be less affected by where we’re doing it and more effected by who’s doing it.”