Pennsylvania Firms Not Looking To Move Back-Office Locations
Heller said it might make sense for some of the largest firms in the state — those with offices all over the world — to move their back-office operations, but he again noted that Pittsburgh and Philadelphia are already lower-cost markets.
When Cozen O'Connor was negotiating a lease last year for space in a new building, Heller said the firm contemplated "for a half a second" whether to have firm administration be placed in a separate, cheaper building in the city. The deal the firm got at its new location in One Liberty Place was cost-effective enough, however, that everyone could be housed in one building.
Morgan, Lewis & Bockius, one of those large firms in the market with offices all over the world, has taken the route of opening a separate location in Philadelphia for its administrative staff. While the firm's attorneys are housed in several floors at 1701 Market St., its large e-discovery data center and some nonlegal administrative support can be found in offices at 1801 Market St.
What Heller said Cozen O'Connor and other firms might explore is the idea of moving or hiring attorneys in cheaper geographic markets. Those attorneys would handle more rate-sensitive matters in a location such as West Virginia or Buffalo, N.Y. Heller said the idea would be to go to a market where there were a number of high quality attorneys available for that type of work.
Ballard Spahr Chairman Mark Stewart said his firm also thought about moving administrative staff to a separate location in the city when his firm renegotiated its lease recently, giving up two floors of space. But instead the firm decided to create an administrative floor in its existing place. That gives Ballard Spahr the opportunity to move that one floor to another building if it needs the additional space for new attorneys, Stewart said.
Stewart said there are some efficiencies of having administration on-site. And he said the firm didn't see a big-enough cost savings for moving administration to a different building or across the river to Camden, N.J., that the firm would want to have seen to make the change. He said moving staff can create an expense, some people might not make the switch and there would be inefficiencies of not having them in the same building.
Drinker Biddle & Reath's executive partner, Andrew Kassner, said moving administrative functions to cheaper markets might be a pressing need for firms in California, Chicago and New York, but not for firms in Pennsylvania.
Scott Green, CEO of Pepper Hamilton, agreed. While he helped his former firm, WilmerHale, move its back-office operations to Dayton, Ohio, such a move doesn't make as much sense for Pennsylvania firms, he said.
Green said WilmerHale's support functions were housed in the more expensive markets of Washington and Boston. For Philadelphia firms, the "economics aren't quite as compelling," he said, adding, "at least not yet."
Mary Ashenbrenner, head of Wells Fargo's legal specialty group in Pennsylvania, said employee costs in Pennsylvania are pretty reasonable. She said she doesn't anticipate seeing a lot of large Pennsylvania firms moving their back-office operations outside of the state.