Bright Insight report finds legal sector leasing continues to surge as firms accelerate AI investment and expand premium office footprints

NEW YORK: #cre--Law firms are emerging as one of the strongest drivers of office market recovery, expanding footprints and accelerating investments in artificial intelligence (AI) at a time when many industries continue to reassess their workplace needs, according to a new report from Cushman & Wakefield.

The firm’s latest Bright Insight report found that U.S. law firms leased 4.6 million square feet (msf) of office space in the first quarter of 2026, marking the second-strongest first quarter on record and extending a four-year run of record leasing activity for the legal sector.

Over the past four quarters, law firms leased 31% more office space than they did in 2019, underscoring the sector’s outsized role in supporting demand for high-quality office products across U.S. markets.

At the same time, law firms are rapidly increasing investment in AI and technology platforms, signaling that the future of legal work will be both more technologically advanced and more office-centric than many anticipated.

“Law firms are not treating AI and the office as competing priorities,” said David Smith, Head of Americas Insights at Cushman & Wakefield. “The firms moving aggressively on AI are often the same firms continuing to invest in premium office environments, collaboration space and talent development. They increasingly view office real estate, technology and workforce strategy as interconnected competitive advantages.”

According to the report, 44% of legal sector leases signed in Q1 2026 represented expansions in square footage, while less than one-quarter reflected downsizing activity. Nearly all major law firms continue to require regular in-office attendance, with 93% stated policies of at least three in-office days per week, significantly higher than the average office attendance requirements in finance and technology.

The report also found that AI adoption across the legal industry has accelerated rapidly. Sixty-two percent of law firms now report actively using AI, up from just 17% in 2023. An additional 21% of firms plan to implement AI in the future, meaning more than 80% of firms are expected to integrate AI into daily workflows in the coming years.

According to a SurePoint Technologies report, rather than reducing hiring activity, the rise of AI is reshaping workforce demand across the legal industry. AI-related lateral hiring increased 68% overall in 2025 and 106% among associates, while firms continue to add talent across technology, operations and business management functions.

“AI is changing how legal work gets done, but it is not diminishing the importance of people, mentorship or in-person collaboration,” said Cushman & Wakefield’s Senior Research Analyst, Maggie Tillotson. “Law firms continue to see their offices as essential environments for training, culture, client engagement and high-value work.”

Accordingly, law firms’ workplace design continues to evolve to support attorney collaboration and provide client-facing and event space.

The report also highlights how tighter office supply conditions are reinforcing legal sector demand for premium space. The office construction pipeline has declined 86% since 2020, limiting relocation options and increasing competition for high-quality buildings in gateway and fast-growing secondary markets alike.

Since 2025, gateway markets such as New York City, Washington, D.C. and San Francisco have recorded the highest levels of legal leasing activity, while secondary markets including Atlanta, Houston and Dallas have also emerged as leading destinations for law firm expansion.

“The legal industry is entering a period in which workplace strategy, technology and talent can no longer operate in silos,” said Smith. “The firms gaining an edge are the ones investing across all three simultaneously, using AI to improve productivity while continuing to invest in the offices, culture and collaboration that drive long-term performance.”

The full report can be accessed here.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for occupiers and investors with approximately 53,000 employees in over 350 offices and nearly 60 countries. In 2025, the firm reported revenue of $10.3 billion across its core service lines of Services, Leasing, Capital markets, and Valuation and other. Built around the belief that Better never settles, the firm receives numerous industry and business accolades for its award-winning culture. For additional information, visit www.cushmanwakefield.com.

Fonte: Business Wire