When Clifford Chance made its historic decision to move to Canary Wharf, no firm backed the move more vocally than the London office of Skadden Arps Slate Meagher & Flom, the first law firm to move to Docklands.
Unfortunately, Skaddens, which is struggling to secure more space in Docklands, now looks likely to move – just as the area was getting trendy.
The firm’s London office managing partner Bruce Buck confirms he is looking at different options for the office following steady growth in the firm since it moved to the Wharf three years ago.
“We like Canary Wharf very much and it is great for us. But we are beginning to run out of space so we are considering all our options including the City,” he said. Skaddens has 53 lawyers in London but is expected to grow to 70 over the next two years – too many for its London headquarters at Canada Square.
It is this pressing lack of space that is threatening Canary Wharf’s prospects of becoming a serious legal rival to the City of London, although Clifford Chance’s great banking rival Allen & Overy now looks almost certain to move part of its team to Docklands.
The most recent major signing up came just last week from Clifford Chance’s client US investment bank Lehman Brothers, which is leaving its Broadgate Circle offices to be near the Thames.
It will occupy Heron Quays – Clifford Chance’s building. Lehman was so impressed with Canary Wharf that it reportedly ditched a site in Hackney chosen as its headquarters by its own property team.
It seems Lehman is one of the lucky ones. The other buildings under construction at Canary Wharf will not be ready for several years and probably not in time for Skaddens.
Finding somewhere in Canary Wharf, which has suitable space is Buck’s main problem. What is not yet a factor for consideration, however, is the rising cost of space at the Wharf.
Canary Wharf still remains a cheaper option than many City rents with Lehmans estimated to be paying £42.50 per sq ft for its space compared to the £60 per sq ft rates in the City.
But who knows how long this will last with Allen & Overy still negotiating its deal with the Wharf and with other firms such as Dechert having also expressed an interest in a move?
Canary Wharf might be a cheap alternative to the City of London for now, but its attraction to all but finance-based practices is a long way from being proved.
