provision(s) in the lease, the firm should ensure that, although landlord approval is required prior to any assignment or sublease, such approval will not be unreasonably withheld or delayed.

5. Nondisturbance agreements: In the event that the landlords mortgage on the office building is foreclosed, in many states, junior leasehold interests are wiped out. This effectively means that any buyer at a foreclosure sale is under no obligation to honor the existing leases in the building. To protect itself from exposure if there is a foreclosure on the building, the tenant should insist on a nondisturbance clause, which essentially provides that any buyer at a foreclosure must honor the terms of the existing lease and the tenants rights thereunder.

Attorneys. In addition to the real estate agent, the professional services firm should consider retaining legal counsel to assist in negotiating the lease. Although it may not be necessary to retain counsel while the office search is being conducted, once a choice has been made, the firm should retain counsel to help ensure that the business terms of the deal, as reflected in the RFP and the landlords response(s) thereto, are accurately reflected in the lease. While there is a certain degree of overlap between the services being provided by the real estate broker and the real estate attorney, on average, the real estate attorney should possess a greater familiarity and understanding of all of the terms of the lease than the real estate broker. Retaining real estate counsel will invariably add to the cost the professional services firm incurs in leasing commercial office space; however, such costs are nearly always outweighed by the value that the real estate attorney adds to the lease negotiation process. Chapter 19, Legal Counsel covers the process of selecting an attorney by the professional services firm in detail.

Finalizing and Executing the Lease

Negotiating and finalizing a commercial office lease can take a significant amount of time, and the firm should be prepared to spend several weeks reviewing and negotiating the draft lease. It is important that the firm leave itself sufficient time to fully negotiate the lease and, if necessary, break off such negotiations and look elsewhere for office space. If the landlord is aware that the firm has to move out of its present office by a particular date or that the firm has few or no other options, the landlord will have a real advantage in bringing the lease negotiations to a close.

Nonetheless, once an agreement has been reached on the final terms of the lease, the firm and the landlord will execute the lease. If the firm has agreed to make prepaid rental and security payments, such payments are often due at the time the lease is executed. Thereafter, and depending on any finish-out that needs to be conducted in the premises, the firm should be in a position to take possession of the premises and begin its tenancy.

Office Design, Finish-Out, and Furniture

In addition to selecting an office and negotiating a lease, the firm should spend significant time in planning the office design, finish-out, and furnishings. Each of these components, among others, is of critical importance in both obtaining and maintaining client relationships. As one recent article noted with regard to law firms:

Clients, particularly corporate entities, are conflicted in their perception of law firms. They want the legal practice they hire to be at the forefront of their profession, yet they expect the markers that signify solidity and stability.

In response, some law firms have chosen to look more like their customer base. In San Francisco, for example, those [firms] targeting dot-com companies abandoned wood paneling and private offices for light, open, airy spaces. This approach furthered a perception of niche expertise, but the risks became painfully apparent in the technology downturn.

What a law firms offices look like is an issue because clients regularly visit. In contrast to management and technology consultants, which often do the bulk of their work at the clients site, law firms host their customers.

To be most effective, the appearance of a firms offices must match the image, or brand, clients receive in advertising, personal meetings, and other encounters with the firm. That appearance should reflect a firms expertise without being so closely aligned to a market segment that it loses other business.6

Office design, finish-out, and furnishings not only are important from an external, client-related perspective but also play a crucial role in helping to form and foster the internal culture within a firm. Employee moral, motivation, health, and productivity can all be impacted by the foregoing factors, and as a result, the firm should pay careful consideration to each of these topics when planning for and setting up the professional services firm office.

Although the firm can and should analyze these and other factors on its own, the firm should also consider hiring a space planner/interior designer to assist in this very important phase of relocating to new office space. In much the same way that the real estate agent and attorney can provide valuable assistance and insight into the search for office space and the negotiation of the lease, the space planner can save the firm time and money by coming up with innovative ideas and solutions to the firms office design and furniture needs.

Office Design

There are generally two types of office plans that the professional services firm can adopt: the closed office plan and the open office plan. A balance can be difficult to achieve, as noted by Gregg Hlavaty of Benson Hlavaty Architects: The most prevailing dichotomy in office space design-and the one most difficult to achieve-is to provide work spaces which are both open and

interactive, but also allow for privacy and contemplation. Examples of these two types of floor plans are shown in Exhibit 18.2.

Closed Floor Plan. Traditionally, professional services firms have opted for the closed office plan, which generally provides more privacy for professionals. This type of office plan is predominated by exterior and interior offices of various sizes and internal walls that separate different groups or sections within the firm. Although the closed office plan affords the firm a greater degree of privacy, it is also more expensive than alternative floor plans.

Open Floor Plan. The open plan is usually a more cost-efficient layout that promotes a more social work environment. An open office plan is most often predominated by a large open area that is divided up into individual or

Exhibit 18.2 Floor Plans