Active demand for London office space from legal firms increased by 6.1% to just over 2.1m sq ft across 24 requirements in Q2 2026, according to Knight Frank’s latest London Legal Sector Update.
Law firms acquired 133,287 sq ft of London office space during Q2, down on the 326,973 sq ft recorded in the first quarter. Knight Frank said the reduction principally reflected the timing of lease events and absence of very large transactions.
The City core accounted for eight of the quarter’s nine recorded law firm transactions, reaffirming its position as the sector’s principal centre of gravity.
Almost three-quarters, or 73%, of recent law firm transactions have been expansionary, demonstrating that many firms are using real estate to accommodate growth.
Richard Proctor, partner and head of UK occupier strategy and solutions at Knight Frank, said: “The City core is facing a pronounced mismatch between the volume of demand and the amount of committed future supply. Law firms are responding rationally by beginning searches earlier, particularly for requirements exceeding 50,000 sq ft, where ESG performance, workplace quality and amenity provision have become decisive factors in occupier decision-making.
“For law firms, real estate decisions are becoming more complex. Firms must account not only for future headcount and new ways of working, but also for the risk that preferred buildings will be unavailable if decisions are delayed. The strongest firms remain prepared to pay for the right building, particularly where space can support talent, client experience, organisational restructuring and brand. Expansion is still the dominant story, but firms are being more selective about where and how they grow.”
Jennifer Townsend, partner, occupier insight at Knight Frank added: “Legal sector consolidation is no longer simply a story about merger announcements. It is now moving desks, releasing offices and changing how firms plan their portfolios. Real estate quickly becomes a strategic question following a merger.
“Firms must decide which location best represents the combined business, how teams will work together and whether the existing estate can accommodate different cultures, working practices and growth expectations. Merger related consolidation may release well-fitted offices into a supply constrained market. However, it can also generate new requirements where neither firm’s existing space provides the right long-term solution.”
