Anita Turner

Author: Anita Turner

  • Have You Earned a Gold Star For Client Service?

    Have You Earned a Gold Star For Client Service?

    Client service has always been my biggest focus at work.  You’re thinking “Right.  You’re just writing that because your clients read your blog.”  While that may be true (many of my clients read my blog), my focus on client service is not quite as noble as it sounds.  The truth is that I love a gold star.  I like to be able to point to a client’s success and say “I helped do that!”  A client service focus also ensures that clients keep coming back to me.

    Which brings me to today’s topic: whether you are a lawyer, broker or other service provider, how should you measure client service?  The most obvious way is to ask your clients how you’re doing.  To that end, I’ve already written this blog post about Net Promoter Score surveying.  You can also sit down and interview your clients annually, an approach so valuable that books have been written about it.  Finally, you can track client metrics including retention, growth, and spending.

    Retention

    Client retention is nuanced but still relatively easy to measure in a commercial real estate context.  If a client has a multi-location portfolio, I ask whether I am getting new assignments each year as transactions occur in the client’s portfolio.  I may not have all of a client’s work because of geography, but are they regularly calling me to help with their transactions?

    By this measure, my biggest success is SAIC.  To date, I have represented them (either directly while I worked at JLL, or co-brokering with JLL) in every geography in which I have lived for over twenty years.  I am so grateful that their real estate team continues to trust me to help them achieve their real estate goals in Alabama.

    In the five years I have been at Colliers in Birmingham, my partner and I have lost only one existing client (and that loss was to a business partner of that client).  For every other multi-location client, we have done at least one transaction per year.  For clients with only one location, we track whether we are able to maintain the relationship across each lease term.  While the data tells us that we have a good track record, we know that the second we lean back, we are sunk.

    If you haven’t seen revenue from a regular client for an unusual length of time, it is probably time to ascertain the reason.

    Growth

    Growth by client is tracked differently depending on the service provider’s industry.  In real estate, we track by number of deals.  If we are increasing the number of deals done annually for a client either nominally or as a percentage of the client’s total deals, we are headed in the right direction.  We can’t necessarily track growth in dollars because some deals/locations may be smaller and thus generate less revenue whereas one large transaction can falsely inflate annual growth numbers.

    In law, individual client growth may be tracked either by revenue or by the number of matters handled for a client.  Each firm needs to determine the best metric for their practice.  The key is that whatever the metric chosen, regular tracking allows for measurement and improvement.

    Law firms can also use revenue growth data to compare trends in revenue for one specific client across practice groups.  Is one practice group increasing their revenues with a client while another practice group is losing revenue from the same client?  Such data can trigger an inquiry to determine whether the client is sending that work to a competitor or just does not have as much of that type of work any longer.  Sharing this information with the client team allows them to diagnose and address the issue.

    Client Spend

    Finally, in some industries, growth can be tracked by client spend.[i]  In the legal industry, tracking client spend year over year can quickly indicate whether a relationship is growing or dying.  If your client is a public company, you can check their 10-K statements to determine their annual revenue growth.  If your client revenues are not increasing in rough proportion to their corporate growth, it can be a sign that you are losing revenues to competitors or work is being pulled in-house.  In either case, it is probably time to get busy righting the (relation)ship.  You can also use the data you gather from this exercise to identify your client service successes and then determine how your firm/company served those clients differently than your client service challenges.

    If you have identified other metrics that are helpful for measuring client service and satisfaction, please share them in the comments or give me a call.  I would love to hear about them!

    [i] Office tenant representation growth is not as easily measured by this metric because our fees are paid by landlords so, in a perfect world, our clients never spend a dime compensating us for our services.

  • Big Apple Wisdom Part II: You’re Using That CRM System All Wrong!

    Big Apple Wisdom Part II: You’re Using That CRM System All Wrong!

    Do you use a CRM (client relationship management) software system?  I do, but after attending LegalWeek in New York last week, I have a new perspective on how to do it better.

    Me and Apto

    As most of my readers know, I am an office tenant advisor in the commercial real estate industry. Because it is important for me to keep track of all of my interactions with clients, prospects and other contacts on a daily basis, I log all of them into Apto — a Salesforce CRM software overlay customized to the real estate industry.

    I enter every non-transaction-related meeting date, phone call, voicemail, marketing material sent, etc.  I also enter personal notes about anything from a contact’s school allegiance (college football is everything in the South) to his/her wedding anniversary date.  Then, any time I am going to reach out to that individual, I can easily review our history.  Finally, I use Apto to set ticklers to remind me to stay in touch with people on a regular basis.

    Law Firms and OnePlace

    The legal industry has access to its own tailored Salesforce overlay: OnePlace.  OnePlace integrates time and billing records, client matter descriptions, client contacts, publications, marketing materials and management objectives for evaluation and tracking purposes.  It allows practice groups to set revenue targets, track progress in real time and disburse info to the group. It also helps firms capture each of the contacts they have with a client or prospect.

    While I find CRM systems invaluable and have become a dedicated user, it seems I am rather isolated in this opinion.  Many of my colleagues who have been in commercial real estate for several years have developed their own systems for tracking information and are resistant to entering it all into another database that (in their assessments) is not nearly as functional as their existing systems.  Because I have “bought in,” this frustrates me.  I know we all see huge value in sharing our data to better interact with our mutual clients.

    The Dilemma: The Users Aren’t Using the System

    Which brings me to LegalWeek.  I attended a roundtable aptly titled “Is CRM a Bad Word in Your Firm?  It Doesn’t Have to Be.”  The roundtable was facilitated by two incredibly kind Canadian gentlemen (is that redundant: kind and Canadian?) from Introhive, a data automation service for CRMs that mines and populates contact data so that end users don’t have to.  Sitting next to me at the roundtable was the Marketing Technology Lead from an AmLaw20 firm.

    Tangent: this firm has a person in the “Marketing Technology Lead” position?  This firm is going to light.  It. Up.

    The Solution

    Back to business. I was dying to know how a huge law firm got its attorneys to adopt a CRM system. I asked Marketing Technology Lead (hereafter “MTL”) for his secret.

    His answer: the firm didn’t get the attorneys to adopt it.

    Wait, What?

    The attorneys do not have access to OnePlace to enter their own data.  Instead, they are sent meaningful data analysis by their business development team on a need to know basis.  Here’s where I acknowledge that I (wrongly) thought I knew more than MTL because how could there be any value to a contact database when the attorneys are not entering their contacts or meetings?

    MTL patiently explained to me that giving the firm’s attorneys the ability to enter their own data was (1) significantly more expensive (you have to buy numerous licenses and they aren’t cheap) and (2) hopeless.  Data entry is time the attorneys cannot bill.  Also, they do not want to learn a new software platform.  The reasons attorneys won’t use the platform go on and on.  Thus, if database population were left to the attorneys, the database would sit empty and unused.

    Consequently, MTL said that his firm uses Introhive to mine the firms’ emails (it looks only at the To, From and Subject lines so as not to compromise privacy), billing systems and other databases to gather contacts.  Introhive then cross-references those contact names with other databases to fill in contact information.  And, it regularly verifies this information so that it catches changes in office address, phone number or company.

    Comes the Dawn

    The business development and marketing teams at MTL’s firm then enter every content marketing campaign, client event, pitch, etc. into the database, tagging the appropriate recipients/attendees/contacts.  These teams then use the data to provide attorneys information like which campaigns a particular client reacted to — either by opening an email and clicking on a link or attending a firm seminar or webinar.  This can help the firm as well as the billing attorney better understand a client’s interests and needs and target future marketing efforts more accurately.

    MTL noted that attorneys are welcome to ask the business development and marketing teams to add other useful data to the database as the attorneys become more comfortable with the database’s use and value.

    I am still contemplating how my firm can apply MTL’s method for CRM integration to facilitate wider and more effective use of our database.  Maybe I’ll give one of my new Canadian friends at Introhive a call!

    [Side note: unfortunately, this is not a sponsored post.]

    _______________________________

    Help Me Help You

    Law and other service firm use of CRM databases is an ongoing area of interest for me.  To that end, I welcome anyone willing to share their CRM experiences with me on or off the record to please give me a call.  You can contact me here and I will update this article as I learn about how others optimize CRM use.

  • Your clients like you, but would they recommend you?

    Your clients like you, but would they recommend you?

    The best way to retain your current clients and win new ones (whether in law, real estate or other service industries) is to deliver superior client service.  BTI Consulting publishes a Client Service All-Stars report each year listing the lawyers across America who provide the best client service as identified unprompted by their clients.  I was pleasantly surprised to find my friend Greg Cook, a litigator with Balch & Bingham, on the most recent list.

    People, there are 1.3M lawyers in the U.S.  Only 319 made this list!

    When I congratulated Greg on the Client Service All Star honor and asked him how he thought about client service, he said that it is his job to make sure his client is never blind-sided.  To Greg, this means he not only has to be on top of every aspect of a case when it is in litigation, he also has to know what is happening with his client’s business so he can help that client avoid future litigation.

    The BTI report backs up Greg’s interpretation of client service.  It states that All Stars are defined as such by their clients because they share common traits, among the most important of which are superior client focus and an exceptional understanding of the client’s business.  In his book Law is a Buyer’s Market, Jordan Furlong echoes this sentiment:

    “Nothing will stitch a client closer to a firm than an assured confidence that the firm understands the client and is looking out for its best interests.”  [Emphasis added.][i]

    How can you find out how you’re doing with your clients if you didn’t make a list like BTI’s?

    Many industries and individuals use Net Promoter Scores (“NPS”) to determine whether they are doing a good job for their clients.  NPS is an index that measures the willingness of clients to recommend a company’s service to others.  Clients are asked just one question: “On a scale of 0 to 10, how likely are you to recommend this company’s service to a friend or a colleague?”

    Respondents are categorized as Detractors (scores of 6 or lower) who were not thrilled with the service and could potentially damage the company’s reputation through negative word of mouth; Passives (scores of 7 or 8) who are not enthusiastic enough about the services to actually promote the service provider; and Promoters (scores of 9 or 10) who recommend the company’s services enthusiastically to others.

    Your clients want you to ask them how you’re doing!  (We know; we asked them.  See our survey here.) I encourage you to send the Net Promoter Survey to your clients and then follow up with them to understand where you are falling short and identify opportunities to better serve them.

    Your client service goal should always be to turn detractors or passives into “raving fans” – the ones for whom you did such a good job that they will sing your praises to others unprompted.  To quote one of my favorite muses, Seth Godin:

    “Surprises and vivid action matter far more than we imagine, and we regularly underinvest in them.”

    The Ritz Carlton moments; the small services we provide to clients that they hadn’t even realized they needed; these are the things that will resonate with them far into the future and create those raving fans.[ii]  And we can only provide this kind of service to them if we truly understand them and their businesses… but that’s this article.

    If you need help, give me a call.  I live for this stuff.

    [i] This book is brilliant and worth every penny!  Order it now.  I am not (unfortunately) a paid endorser.

    [ii] Another great strategy to set yourself apart is to make sure you end client interactions on a high note.  A whole article about this appears here.

    [fancy_box color=”Accent-Color”]A Side Note on the Gravity of the Word “Unprompted”

     

    Consider two scenarios:

    (1) A friend asks you to recommend an estate planning lawyer. You say, “I use Jane Doe.  Here’s her number.”

    (2) At a dinner party, a friend says “Y’all, my husband and I just finished the estate planning process we should have started ten years ago. We put it off forever because we dreaded it so deeply but Jane Doe made it incredibly manageable.  Not only that, she pointed out ways we could better manage our assets to limit our tax liability in the future.  You have to call her!  Here’s her number.”

    Now to put it in context of the BTI survey.  The respondents were asked who they would recommend for legal work and one of them named Greg Cook.  This is much more compelling than simply answering “yes” to the question “Would you recommend Greg Cook for litigation work?”

    Clearly the unprompted recommendation carries more weight.[/fancy_box]

  • Why a rate reduction in lieu of an improvement allowance is a no go

    Why a rate reduction in lieu of an improvement allowance is a no go

    If you do not work in commercial real estate for a living and have gone through the office leasing process, you have probably been confounded by the way many landlords play fast and loose with allowances for tenant improvements while refusing to budge on the rental rate.  In fact, I have been asked frequently by clients if they could trade some of the improvement allowance offered for a rent reduction.

    The answer is usually no and here’s why.

    First, any money offered as a tenant improvement allowance is spent improving the landlord’s asset AND can be depreciated over time.  Double benefit to the landlord.

    Second — and often most importantly — in building valuation, rental rates are everything.

    When an occupied building is sold as an investment property, the buyer is buying the building’s cash flows for the return on investment they will offer the buyer.  Initially, when investors are considering a building purchase, they often use a “cap rate” calculation to determine value.  Note that if the buyer gets serious, they will eventually run a much more complex and detailed financial analyses.

    In a cap rate calculation, the buyer divides the net rent per square foot by desired return to get the value per square foot of the building.  The value per square foot is then multiplied by the building square footage.  [I am grossly oversimplifying the process to make a quick point but my overall approach here is sound.]

    So, if a building charges a net rent of $20 per square foot, the investor wants a return of 9%, and the building is 10,000 square feet, the building will be worth $20/.09*10,000, or $2,222,222.

    Now, say the landlord is offering you $10 per square foot in tenant improvement allowances and you say “we’ll just take the space as is; please Mr. Landlord, drop the rate $2 per square foot for each year of the five-year term instead.”  The landlord is probably going to say “no” and this is why:

    If that landlord is considering selling the building after your lease is signed, and your lease rate is reduced to $18 per square foot, the building value to that same investor is now $18/.09*10,000, or $2,000,0000.  As a result, instead of writing you a check for $100,000 for tenant improvements, the landlord gave up that same amount in rental income, but the building value went down $222,222.

    Building Size (RSF) Rent/RSF Total Rent on 5 Year Term Value/sf @ 9% Cap Rate Total Building Value
              10,000 $20.00 $1,000,000 $222.22 $2,222,222
              10,000 $18.00 $900,000 $200.00 $2,000,000

    Even when a landlord is not considering selling an asset, valuation can be important.  For instance, if the landlord wants to borrow money against the building, or has already done so and has a minimum loan to value ratio, the building value impacts the amount that may be borrowed.

    Rent/RSF Total Building Value Debt Max
    $20.00 $2,222,222 $1,444,444
    $18.00 $2,000,000 $1,300,000

     

    If this landlord paid the tenant a $100,000 allowance but maintained a $20 per square foot rate, and a had a loan to value requirement of 65%, the landlord would still be better off by $44,444 in borrowing capacity after subtracting the monies used to fund the allowance.

    Some landlords may give tenants that do not want or need an allowance the equivalent value in free rent at the beginning of the term rather than reducing the rental rate.  This is because once that free rent has been used up (in our example, after six months) the building value based on cap rate is maintained at $2,222,222.

    Lease Economics 101 is complete.  Please look for another installment down the road!

  • This is what understanding your client looks like

    This is what understanding your client looks like

    I preach ad nauseum about the importance of understanding your client’s business if you want to provide a service to them.  Ultimately, all clients are buying solutions to their business problems, even if those problems are positive, like too much growth.  But if you don’t truly understand a client’s business, how can you understand their problems, and if you can’t understand their problems, how can you solve them?

    Give me an example, please

    A few years ago, a brokerage firm moved from downtown to midtown Birmingham.  Management’s motivation for moving was not to save money on real estate (they absolutely did not) or to build more progressive space (again, not the case).  Rather, due to the nature of their business (estate planning), the firm had an older clientele for whom downtown was intimidating due to the perceived difficulty in finding parking and the presumed safety risk.  In addition, the firm’s employees who might have benefited from a few extra hours in the office were leaving the downtown location early to beat traffic getting home.

    This brokerage firm relocated to a more suburban location with abundant free parking closer to its employees’ (and clients’) homes and solved both its problems.  Its clients were more comfortable and its associates spent more time in the office producing.

    If the firm’s broker had not understood his/her client’s needs, he/she probably would not have gotten this assignment.

    If your client is a privately held corporation or partnership, understanding a business is slightly more challenging as you cannot rely on public financials.  However, it is still quite doable.

    What does understanding a business mean?

    It means understanding what the client does, for whom and how they get paid.  You also need to understand where a client is in its industry, where it’s going, who its competitors are and what those competitors are up to.

    A case study: Law firm edition

    Let me use as a law firm as an example to give you an idea of the information I think it is important.  This is the information I would gather before a first meeting and the rationale for each piece of information:

    Number of attorneys: 

    How large is this firm?  If possible, also determine how many non-attorney employees work at the firm.  Many metro areas publish Books of List which detail the number of attorneys at most local law firm offices.  Look for a local Book of Lists’ archive to compare the current number of attorneys to past years to determine if the firm is growing or…not.

    Number of partners: 

    How many partners does the firm contain relative to associates.  The leverage ratio affects everything from overhead costs to overall profitability.  It will also give you an idea of the number of decision makers in a firm as most firms consider every partner a decision maker. Speaking of decisions, how are they made?  By an empowered Executive Director and/or C Suite?  By a Managing Partner?  An executive committee?  A board?  Overall partner consensus?  This is probably the most important item to understand relative to law firms as it will often determine the overall strategy of the firm, the nimbleness of decision making, the progressiveness, et cetera.  It will also be a guide as to how you may need to structure your communications with the firm.

    Locations:

    Is this a firm with numerous location across a state? A country? The globe?  Does the firm operate in a “states’ rights” model where each office makes its own decisions, or is it more centralized?  Which locations are growing?  Which were opened most recently?  What is the number of attorneys in each location?

    LLP or PC:

    This is a can of worms I have only recently dived into, but what a can it is!  For instance, did you know that a PC (because it is a corporation) cannot have a mandatory retirement age for shareholders/partners?  This means, on the positive side, mature rainmakers are able to stay in the firm and continue to contribute without any arbitrary age cutoff.  On the negative side, it can result in an inadvertent bias toward short term decision making if the majority of the voting members skews closer to retirement, thereby making decisions based on the near future rather than the firm’s long-term destiny.  An LLP, on the other hand, can include in its partnership documents an age at which partners must sell back their shares.

    Related to entity choice is capital contribution requirement.  If you can find out whether “members” are required to buy into the entity and how significant the buy-in is, you can get an excellent understanding of how the firm funds capital investments, i.e. debt versus equity or cash on hand.

    Primary Industry:

    Insurance defense? M&A?  Energy?  Aerospace? Tech?  The industry in which a firm practices dictates the type of work, how it is billed, where it is done, whether it is cyclical, the margins, the field of competitors and on and on.  I could list variables affected by the area of law practiced for hours.  You get the gist.  This is important.

    Competitors:

    Are competitors local, regional, national or global?  Why does this firm win the business it wins?  When it doesn’t win, who does it lose to and why?  Are competitors more aggressive on fees or do they boast more depth of knowledge in specific areas?  Understanding the competitive landscape will tell you a lot about where a firm sits and where it is going.

    Recruiting:

    Does the firm recruit a large class of first years out of law school each year?  Or does it focus more on lateral recruiting?  Out of which law schools does it recruit?  Recruiting strategy can have a significant impact on the location of law firm offices as well as the design of the space.  Law firms recruiting millennials are likely going to skew more open and collaborative than firms recruiting senior attorneys that are of a generation accustomed to large private offices.

    Extra Credit:

    What has the firm been in the news for lately?  In what causes is the firm active?  What does its C suite look like?  How about its website: recently updated or a forgotten project?

    The net net.

    Yes, I know it takes a good chunk of time to gather this information, but if it makes you more valuable to your client, isn’t it worth the investment?  I surveyed law firm clients (i.e. general counsel) and they told me: “Our outside counsel (law firm) needs to learn about us.”

    Law firm clients are not alone.  All clients wish their service providers understood them better because it saves clients time and adds value and if you aren’t willing to make this investment, your clients will probably find someone who is.

  • Have a Game Plan Before You Call the Plays

    Have a Game Plan Before You Call the Plays

    I have spent 25 years of my life in the commercial real estate world, first as an attorney, then as a broker.  Consequently, I am not messing around when I say that I think real estate strategy is important.  BUT, it should not precede or trump business strategy.  If you don’t know what’s important to your business and where it’s going, how can you possibly find the right office space in the right location and build it out to support your business goals?

    An Example

    Case in point, law firms typically sign 10+ year leases when they build out new offices.  Many firms do not think about real estate strategy (save potentially taking additional space or giving back a little space) until they are about two to three years from their lease expiration dates.  At that time, brokers begin barraging them with phone calls, visits and emails touting how the brokers can save them money negotiating their next lease deal, whether it be a renewal or a relocation.

    Because most law firms don’t have enough real estate to justify a full time real estate director position, the law firm then gins up a real estate committee to study the issue and select a broker.  Usually, this committee considers how much space the firm currently occupies, its projected headcount growth and the firm’s square footage per attorney as compared to its peers.  The committee then decides how much space the firm needs and whether they want to spend the money to move.

    The broker, armed with this information, identifies valid options and works with the firm to get a renewal or relocation deal done.  Somewhere along the way, the firm engages an architect to help them design their new or refurbished space.  If they’re smart and/or lucky, they engage a firm that challenges them to think about HOW they work in their space.  In these instances, the design can be a powerful tool for facilitating a more productive work force or encouraging new behaviors (if you know what behaviors you want to encourage).

    The Problem

    So, you ask, what’s the problem?  Well, what if you don’t know where your firm is going in the next 10+ years?  What if your firm is encouraging innovation that might spawn a new business that uses space differently in three years?  What if your C suite and business staff is growing?  What if you don’t know what your leverage model (partners to associates) should look like in five years?

    The answers to all of these questions can have a tremendous impact on a firm’s space needs.  For instance, if your firm develops an eDiscovery platform, the programmers and developers working for you are going to want a much different office environment than is typical of a law firm.

    If you expand your project management capability, begin outsourcing some functions to legal process providers and reduce the number of associates you employ, your office space needs are going to change dramatically.

    Maybe your firm’s industry focus means that growth will shift to another city completely.

    The Moral

    I realize that there is some uncertainty to any business’ future plans, especially in an industry undergoing as much change as is the legal industry.  The moral of this story is: Think about your firm strategy (and what effect it might have on your real estate strategy) now; not just when you are faced with a lease expiration.

    OK, How Do We Do This?

    Moving forward, my professional focus is shifting to helping law and other professional services firms build real estate strategies that are based on their business strategies.  It includes a deep dive into the challenges and opportunities facing service firms right now and the development of potential strategies to address those challenges and opportunities.

    My approach is NOT “eliminate your law library” or “move your support staff to cities with lower rents and cheaper salaries”.  These are tired and overly simplified solutions proposed by people who do not truly understand service firms.  While it’s true that law libraries have been shrinking for years, they are frequently being replaced with knowledge centers and collaboration spaces; uses are changing, not going away.  And the remote support staff model may be great if (a) your staff is currently based in a city with high rents and/or salaries; and (b) is significant enough in size that a relocation would generate savings that would outweigh the costs; and (c) your operating model does not benefit from the proximity of that staff.   This, clearly, is not true of most AmLaw200 or smaller firms.

    Rather, my approach is to consider such things as the way law firms are evolving as businesses, how they are structured, diversity recruiting and retention concerns, and millennial recruiting and retention concerns.

    My approach includes defining occupancy, economic and workplace behavior goals.  Where appropriate, it includes partnering with appropriate design firms equipped to address workspace optimization.

    After building a business-based real estate strategy, I help firms understand the strengths and weaknesses of their current real estate portfolios relative to that strategy.  Among the many benefits of this approach for service firms is that together we may discover they have opportunities within their current real estate portfolios to make changes that will more quickly enable them to reach their business goals.

    This means looking at real estate independent of expiration date ticklers.  It also means stepping away from a commission-based operating system for me.  I want you to consider me as a partner navigating your firm into the future.  Sound intriguing?  Let’s talk.

  • Should Office Buildings Have Dress Codes?

    Should Office Buildings Have Dress Codes?

    Most days when I head into work in the morning, I am in “business” attire.  The theory is that this renders me appropriately dressed for any client meeting to which I might be called that day.  However, that is not always the case.  For instance, some of my clients are tech companies and I look like the Church Lady from SNL when I show up in pinstripes.

    So, this whole dress code situation can be a problem whether it is self-imposed or company policy.  It gets even more interesting as different industries with different sensibilities on work attire lease office space in the same multi-tenant buildings.

    When I lived and worked in Atlanta, there was a local landlord whose lease included rules dictating “professionally appropriate clothing” in the building.  The same landlord also insisted (in its leases) that any contractors performing construction in the building had to eat lunch in designated areas, presumably so that no one mistook them for actual tenants of the building.  As this was twenty years ago, I am cautiously optimistic that this landlord has evolved in their approach to dress codes.

    I do understand that this landlord wanted its office buildings to be attractive to tenants with good credit and strong businesses and, in the late 90s, such tenants were usually professional services companies, financial institutions and Fortune 500 Companies.  I also understand that many of these desirable tenants had work dress codes and did not want the professional atmosphere they valued to be diminished by other tenants coming to work in flip flops and sweatpants.

    Fast forward twenty years and “unicorn” companies like Uber, LinkedIn, Facebook, and Zappos have no dress codes.  In fact, Google’s employees joke that their dress code is “You must wear clothes.”  And, these companies are arguably the most desirable tenants because of their rapid and well-funded growth.

    So what should a tenant do?  How should a multi-tenant building owner approach the issue, especially in cities other than tech-hubs San Francisco and Austin?  If you are responsible for managing a class A office building in New York City, how do you attract law firm tenants and tech companies alike?  Or do you have to choose between the two?  And if you are a traditional law firm tenant or financial services company, do you care what the other tenants’ employees looks like when they come to work?  Will it affect your clients’ perceptions of your firm?

    I cannot answer these questions as there are as many approaches as there are situations.

    The workplace has evolved extensively in the last ten years.  Business casual encompasses a broad spectrum from nice jeans to the traditional sport coat and khakis.  Consequently, it seems the best approach is to consider the issue (as a tenant or a landlord) before you sign a lease to determine whether it matters to you or affects your business.  If so, perhaps the landlord and tenant could agree to a minimal building dress code (no pajamas?) or, conversely, to a lack thereof.

    On a recent visit to Denver, I was impressed with how easily a white shoe law firm coexisted next to a transplanted San Francisco tech company.  The law firm appeared to have embraced a very comfortable but classy version of business casual while the tech company had embraced a very upscale version of tech casual.  Perhaps over time, the stark differences between dress codes will dissipate.  Until then, give the issue some consideration when choosing your company’s next offices.

  • For Property Managers, Snow Days Are No Vacation

    For Property Managers, Snow Days Are No Vacation

    While I may be a Southern lady now, I was a Minnesota girl for the first 22 years of my life.  Consequently, I am no stranger to snow, shovels, sleds, and the like.

    Now that I live in the South, my Minnesota friends are laughing at me and my fellow Southerners every time it snows and our cities shut down.  But y’all, it’s different down here.

    We don’t have plows.  Our pipes are not well insulated.  We don’t know how to drive on ice and snow.  For the love, many of us don’t even own gloves, much less ice scrapers.

    So, when we have a “major snow event” where we get five inches of snow like we did last Friday , it’s a thing.  Schools are cancelled.   People are advised to stay off the roads.  And our children improvise sleds out of boogie boards or flattened boxes.  As a tenant representative, I work from home.

    Unfortunately, snow days look a lot different for my co-workers who manage office and medical buildings on behalf of our clients.  I asked Kathy Huckabay, a Birmingham property manager, what was on her mind Friday and received this list:

    • Spread sand and Ice Melt at all building entrances and stairs prior to the arrival of tenants.  When it starts snowing in the middle of the night, our property management staff is up crazy early to ensure our buildings are safe by 8 am.
    • Run the building heat.  The temperature had been in the high 60s earlier in the week, so this is important to remember.
    • Turn exterior water spigots off.
    • Make sure any generators are topped off.  We regularly lose power in the South when it snows.
    • Sweep any ponding water away from walkways to prevent ice and the ensuing slip and fall injuries.
    • Set out caution cones.  Maybe these are not necessary in the North where people are accustomed to icy sidewalks, but in the South, they are a must.  
    • Have the janitorial, security, and maintenance personnel keep Ice Melt/sand, cones, and a shovel in their truck beds.

    To their credit, last week our property management staff kept all of our tenants safe while working very long and full days.  If you are a tenant in a southern office building, today would be a good day to give a nod to the kind and knowledgeable people that keep it all together when snow makes the South falls apart.

     

     

  • Do You Know What Your Light Fixtures Are Capable Of?

    Do You Know What Your Light Fixtures Are Capable Of?

    Last week, I learned something new about lighting, namely, light fixtures are so much more than light sources.  Yes, they can be design statements and architects can do crazy imaginative things with style and placement.  But did you know they can also become internet-connected data hubs?

    The gold standard

    Consider the Edge building in the Netherlands in which every light in the building is ethernet connected.  These lights can collect data such as body heat concentration, air flow, etc.  They can also receive data.  Example: Deloitte is the primary occupant of the building, and all of their seating is free address, meaning you are assigned or request a workspace as required by your schedule.  These requests are handled by an app which also stores your personal lighting preferences.  When you go to your assigned seat, the lighting receives data from your smartphone and automatically adjusts the brightness to your personal preferences.

    Hue and brightness

    On a more basic and less expensive scale, lighting can now be “wired” with sensors (my apologies to the folks at Mayer Electric who opened my eyes to this world and would likely be horrified at my overly simplistic language) to control not just the intensity of the lighting, but also the color (i.e. white, blue, yellow spectrums).  Some local schools are using this “smart” lighting to optimize lighting to create the ideal learning environment depending on time of day and task at hand.

    Positioning

    Sensors can also be used to monitor workplace occupancy and traffic throughout a space.  For example, airports are using sensors in lighting for tasks ranging from  guiding passengers to their gates to locating wheelchairs as needed by gate agents.

    Temperature, humidity and air flow

    For those willing to make the investment, sensors can be installed to monitor air flow, humidity, and temperature in a space.  Facility managers can use the information gathered from such sensors to efficiently manage heating and cooling, and electricity can be conserved through on-demand rather than static lighting.

    Perhaps because I am naively unconcerned about “big brother” monitoring, I find this all fascinating.  My clients are always trying to understand how changes to their physical space are going to affect workplace occupancy and productivity.  Without constantly surveying their employees or tracking them via Bluetooth monitors (which could accurately be characterized as a “big brother” approach), these variables are difficult to measure.  With lighting sensors, however, an employer can determine which spaces in an office receive the most use, where the people traffic flows within and between floors, and how long people spend in various areas.  Designers can then use this feedback to determine which design approaches are most attractive to the occupants.

    The moral of the story

    We cannot all afford lighting as smart as the Edge, however, we can all think of lighting beyond the appearance of the fixture itself.

  • 5 Things to Consider Regarding Insurance Obligations in a Lease

    5 Things to Consider Regarding Insurance Obligations in a Lease

    Whether you are an office tenant or a broker or lawyer representing an office tenant, here are five things to consider regarding your insurance obligations under a lease:

    1. Know what you are insuring. For most multi-tenant office buildings, the landlord obtains the property insurance on the building itself.  The tenant is responsible for insuring its personal property in its space (i.e. furniture, fixtures, equipment, artwork, etc.) and any above-standard (read: high-end) improvements.  Make sure this is how the lease reads.  If it is not, confirm with your company’s risk management team that you have or can obtain the type of insurance requested in the lease.
    1. Make sure that you only need to provide the landlord certificates evidencing coverage rather than copies of all actual policies. First, many corporations do not like sharing their insurance program details with anyone outside the company.  Second, the policies themselves change frequently and are often quite bulky.  You are not going to want to be responsible for ensuring that the landlord has up to date copies of your policies.
    1. Make sure that your risk management team can comply with any other insurance specifications made in the lease. For example, many landlords dictate the minimum insurer rating (AM Best), the type of certificate (i.e. Acord form), the size of deductibles, the size of policies and whether the landlord is entitled to notification of changes and/or cancelations of policies.  Ideally, I strive for a reasonable rating, no specific certificate form, “commercially reasonable” deductibles and notifications only in the event of “material changes” or cancelations.
    1. Try to limit the number of additional insureds required in the lease. Some leases will contain a long list of landlord entities including lenders, property managers, brokers, etc.  This can be cumbersome to the risk management team that is tasked with keeping certificates of insurance accurate and up to date.
    1. Finally, to make it easier for your risk management team to comply with insurance requirements after the lease is signed, gather the following information at the time you enter into a lease:
      • The year the building was built;
      • The construction type (for instance, brick and glass, concrete, steel frame, etc.);
      • The number of stories;
      • Whether the building is sprinklered; and
      • Whether there is a security system in place.

    Store this information with your lease, preferably in a lease administration database, so that it is easily accessibly when policies are renewed or changed.  I promise you it will be requested numerous times over the life of the lease and you will be glad to have it handy.