Law Firm Report - Q1 2026

Although several of the largest leases of Q1 2026 were executed in Mid-Peninsula – the epicenter of technology and innovation – large preleases emerged in the conventional legal strongholds of New York City and Washington, DC, after a prolonged pause in new development.

Law firms have dramatically increased their presence in the premium office market, accounting for 21.7% of all U.S. office leases signed above $100 per square foot. The trend underscores law firms’ continued emphasis on “flight to quality,” driving heightened competition for best-in-class assets and establishing a new benchmark for premium segment leasing velocity.

The ratio of law firms expanding versus contracting has tripled over the past two years. In Q1 2026, only 12% of law firms reduced their footprint.

Washington, D.C. has experienced the most expansion activity with 65 transactions in total. Notable expansions include Freshfields, Sullivan & Cromwell, Milbank, Manatt, Holland & Knight, and Williams & Connolly.

New York City followed closely behind with 46 expansions including Simpson Thacher, Covington, and Latham & Watkins.

Chicago had 38 expansions led by firms like Mayer Brown, and both San Francisco and Los Angeles had 23 expansions each, featuring firms such as Kirkland & Ellis in San Francisco and Latham & Watkins and Paul, Weiss in Los Angeles.

In Q1 2026, net office inventory declined by 9 million square feet due to conversions and demolitions outpacing new office deliveries. U.S. office inventory now stands 25 million square feet below its peak from Q4 2023, reflecting a sustained contraction in total stock.

Legal employment climbed to an all-time high in Q1 2026, with roughly 114,000 jobs added in the legal services sector over the past decade, bringing current employment to a record 1.234 million jobs.

The unemployment rate for lawyers stands at just 0.8%, and 2.0% for paralegals and legal assistants—both well below the national unemployment rate of 4.3% in Q1 2026.