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WHAT WE'RE WATCHING

DISCONTENT UNDER PRESSURE - It's the circle of Big Law life: demand goes up, firms start charging more and some partners, feeling the rate pressure, bail out to join smaller firms or strike out on their own. As Law.com's Andrew Maloney reports, conditions are ripe for large firm lawyers to go small this year, according to analysts and firm leaders. An infusion of remote-working flexibility and a bit of a breather after a busy 2021—plus a desire to control billing rates—are leading some lawyers to downsize into smaller firms or spin out into their own boutiques in 2022. A surge in profits, too, has expedited late-career lawyers to the Big Law offramp.  Andrew Sachs and Ricardo DiMonte, leaders of the recently-merged Chicago boutique Robbins DiMonte Ltd., said often they've found laterals who want to have competitive rates to grow their practice but can't do it within their current structure. "The frustration we have both seen with laterals into our firm is that they're young partners in Big Law firms and they'd like to develop a larger book of their own business. But the rate structure is too high," DiMonte said. "And the only way to remain an equity partner or grow into that is to get the big clients with big cases in the biggest transactions, whereas there's so much more middle-market business you're missing out on." Sachs said they "absolutely" expect more attorneys to spin off their own firms or step down into smaller firms because of rates, as well as remote work flexibility and greater control of their practices.

REAL (ESTATE) DEALS - Folks aren't exactly clamoring to get back to the office, but at these prices, it can't hurt to stock up on space just in case! As Law.com's Jessie Yount reports, real estate executives say the construction of the office of the future is well underway within the legal industry, despite a dip in leasing activity at the beginning of the year. In the first quarter of 2022, leasing volume in the legal sector totaled 1.1 million square feet, down from the previous two quarters that saw over 1.5 million square feet each, according to a report from commercial real estate brokerage Savills Inc., which analyzed law firm transactions over 20,000 square feet made in Q1. Yet, according to Tom Fulcher, chair of the legal tenant group at Savills, the first-quarter results are consistent with historical norms. Leasing activity tends to see a burst at the end of the year and a lag at the beginning of the year, he said. However, Fulcher noted that there is a shift toward "densification," as firms take advantage of favorable market conditions and make longer-term commitments. "Firms continue to sign 10- to 15-year leases, but longer-term leases didn't used to have termination options, and now they do," he said. "There are also contraction options, which gives the right upon renewal to lease less space. That flexibility has become a huge part of deals."

WHO GOT THE WORK?℠ - Covington & Burling partner Andrew Soukup has entered an appearance for Ellume USA in a pending consumer protection class action over Ellume's COVID-19 antigen rapid test kits. The case, filed March 22 in Maryland District Court by Kramon & Graham, claims that the kits provide false positive test results. The case, assigned to U.S. District Judge Richard D. Bennett, is 1:22-cv-00704, Kerschen et al v. Ellume USA, LLC.  >> Read the filing on Law.com Radar and check out the most recent edition of Law.com's Who Got the Work?℠ column to find out which law firms and lawyers are being brought in to handle key cases and close major deals for their clients.