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Shopping Centers Today -> April 2002
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LEGAL TENANTS
Law firm sets up shop in regional mall. Will others follow?
By Dave Bodamer
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| At the office: Lawyers David D. Daggett (left) and Michael Lewis. |
Lewis & Daggett, a North Carolina-based law firm, recently moved into some unusual new digs: the Four Seasons Town Centre regional mall in Greensboro.
The location is designed to attract new clients as well as serve the existing ones, said Michael Lewis, principal with David D. Daggett at the firm, which specializes in personal injury claims. The practice, which moved into the mall last August, was drawn there by the accessibility it provided for current clients and its high visibility for potential customers, he explained. Shoppers passing by the office’s ground floor location are welcome to step inside.
“They may have questions about different kinds of law,” Lewis said, “but we’re not really there for the walk-in traffic. It’s more about being visible and accessible so that when somebody does have an accident or knows someone who needs a lawyer, they’ll remember we’re there. They’ll remember us.”
Because of the higher rents associated with leasing mall space, Lewis & Daggett boiled its operations down for the Four Seasons location. The storefront is meant to catch the eyes of the mall patrons, while the space behind it, which is divided into four rooms, is used for meetings.
The mall location is more convenient for some of the firm’s clients than the main office, which is 20 miles away, Lewis explained.
“For that reason, we are only leasing the amount of space we need to comfortably meet with people,” he said. Most of the firm’s business is conducted at its headquarters.
Nationally, today there are fewer than a dozen law firms located in regional malls in the United States, according to the Directory of Major Malls, and a few years ago there probably were not any. Indeed, when Lewis & Daggett initially tried to lease mall space about five years ago, they were turned away.
“That is a reflection of the way malls and shopping centers are evolving now,” said Lewis. “Over the past several years, you’ve seen more and more professional businesses going into shopping centers.”
Though the idea of a slip-and-fall case lawyer serving as a tenant on a mall’s concourse might frighten some developers, Four Seasons marketing director Wendy Ellis, SCMD, noted that the arrival of Lewis & Daggett is part of a trend that has seen malls embrace nontraditional tenants ranging from the U.S. Postal Service to chiropractors and dentists.
At the Palisades Center, West Nyack, N.Y., for example, H&R Block takes up residence as a temporary tenant between January and April every year to provide tax-return services to mall patrons. Denver’s Cherry Creek Shopping Center features a full-service investment center run by locally based Berger Funds (SCT, August 2001). Malls are also increasingly playing host to government agencies, including motor vehicles departments and post offices. Such services give people more reasons to visit a shopping center and enable them to engage in one-stop shopping, proponents say.
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But not all service tenants are equal, according to some mall officials, who expressed reservations about having law firms as tenants. Claudette Duncan, general manager of the 1 million-square-foot Fort Worth (Texas) Town Center, which has a law firm for a tenant, said that the lawyers probably bring in some people who would not normally come to the mall, but added that she is not sure whether those clients do any shopping.
“Some service-type tenants can be an asset to a mall,” Duncan said. “But does this law firm bring in added customers for us? Not that I’m aware of.”
John Mott, general manager of the Palisades Center, also expressed doubts about having law firms in malls, arguing that they don’t make sense. The Palisades Center is looking to other services that he said that will drive visits, such as a health center that provides basic sports medicine, physicals and other health-related services.
Mott said he is also skeptical about giving service providers prime, high-profile locations, saying they are more suitable as temporary or kiosk tenants or in locations off the mall’s main concourse.
“There’s a tenant for every space,” he said. “Maybe a service tenant could take advantage of a space that might not have a lot of mall frontage but that tucks around the back of other tenants. It may also be something you’d put in a side-corridor space, close to its own entrance, but not necessarily right on the main mall corridor.”
Whether that would suit Lewis & Daggett is another matter, but there again, it does not see itself as a typical law firm. With eight attorneys, and offices in Charlotte, Greensboro and Winston-Salem, Lewis & Daggett has significant name recognition in the North Carolina retail market because it is a heavy television advertiser in the region. A firm without the same cachet or as high a profile might not derive the same benefits, said Lewis.
But surely, developers who see no other virtue in having a law firm should at least be salivating at the prospect of getting a piece of some fat legal settlements through percentage rents, right? Apparently not. The law firms and regional malls SCT spoke with said that leases for law offices contain only a fixed-rent portion. Giving developers a percentage of settlements would be unethical, according to Lewis.
“It wouldn’t be in the best interest of our clients for us to tie our rent to our performance,” he said. “Ethically, we can’t operate that way.”
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