DLA Piper, Allens and Clayton Utz are among several major players in Australia downsizing in Sydney and cutting back lawyer numbers as the slump in work volumes continues to put pressure on costs.

The trio, all of which have made staff cuts in the past year, are among a number of firms shedding office space in the Australian financial hub either by moving to smaller premises or subleasing floors.

DLA announced earlier this month it is relocating from its 201 Elizabeth Street premises, where it occupies 8,000 sq m, to 6,000 sq m offices at 1 Martin Place.

Clayton Utz, which now has 201 partners and 753 lawyers in Australia compared with 200 partners and 842 lawyers last year, has confirmed plans to sublet two floors or approximately 3,000 sq m of the 23,000 sq m it occupies in 1 Bligh Street.

A Clayton Utz spokesperson said: "We're only looking to sub-let two floors at this stage. There are a number of firms looking to sub-let space.
The change [in lawyer numbers] reflects lawyer turnover and roles not replaced, and a small number of redundancies, as well as limited hires in
recent months."

Other firms understood to be considering subleasing space include Allens and King & Wood Mallesons (KWM).

Allens, which now has 165 partners and 811 lawyers in Australia, down from 179 partners and 907 lawyers last year, is looking to sublease one floor in its Sydney base, while KWM, which now has 156 partners and 723 lawyers in the country compared with 158 partners and 774 lawyers last year, recently sublet approximately 3,500 sq m of its back office premises in Governor Phillip Tower. Both firms declined to comment."

On the property front, law firms are really focused on cost," said commercial property adviser CBRE regional director Chris Hynes.

"We've seen a large number of firms, at the top end particularly, shedding space by subleasing, either because they were carrying too much space anyway or they have downsized, and clearly there's a lot of that happening.

"We're also seeing people moving and rationalisation of space. Very large offices are starting to disappear – they're all adjusting to a lower growth environment."

Other firms including Ashurst, Herbert Smith Freehills and Minter Ellison have also seen Australia headcount fall during the past year.

Jones Lang LaSalle's national head of tenant representation Steve Urwin added that the market had been impacted by an influx of new firms, a drop-off in work and a number of major international mergers.

"The impact of the mergers has perhaps forced firms to look a little bit more on a commercial or business basis than they had previously," he said.

"It's a mix of things. There have also been new entrants who have typically come in and poached high-end partners. That added to the fact that there has been virtually no M&A activity and the resources sector is right off, means there is an awful lot of pressure on law firms."