Office Leases for Accounting and Professional Service Firms

An accounting office may be full for a few months and half empty for much of the rest of the year, while a consulting or engineering firm might see similar swings around big projects. Leasing for the peak means paying for empty desks most of the year. Leasing for the average means a cramped season when the work matters most.

Measure before you decide. Look at badge data or simply count who is there on busy days and ordinary days, and how many seasonal staff come in. Then consider the options that handle the peak without buying it permanently: shared desks, hybrid schedules during slow months, audit teams working at client sites, and flexible rooms that serve as conference space most of the year and project rooms during the rush. A test fit shows which of these actually work on a given floor.

Many leases define building hours narrowly, and work outside them can cost extra. For a firm that spends its evenings and weekends at the office for part of the year, this can be a real expense that does not show up in the rent quote.

• ✓What are the building's standard HVAC hours, and do they include Saturdays?
• ✓What is the hourly after-hours HVAC charge, how is it calculated, and can it rise during the term?
• ✓Is there a minimum number of hours for each request, or a charge for a whole floor when only one suite needs it?
• ✓Can we negotiate a set number of free after-hours hours, or a reduced rate, in busy season?
• ✓Does the building remain open, with security and elevators in service, on nights and weekends?
• ✓Is parking available and affordable after hours, and is it well lit?
• ✓Are after-hours food options or a usable pantry available for long days?
• ✓Can staff get home safely and easily by transit late in the evening?

Ask what actual after-hours use cost a prior tenant, if the building will share it. Then include your estimate in your total occupancy cost, so buildings are compared on what you would really pay.

How often clients visit varies by firm, but those visits still count. Decide how many conference rooms you need on an ordinary day, whether clients can reach them without walking through work areas, and whether your address is easy for the people you serve to get to. Quiet rooms for confidential conversations may matter more than a large boardroom.

Records are a second consideration. The IRS's guidance for tax professionals says, "Securing office space is as important as securing computers." It also urges firms to look for exposed client records, including in waste bins and shared equipment areas, and recommends secure disposal such as shredders or burn boxes. What your firm must do depends on its services and professional rules, so confirm this with your own advisors. On the lease side, it raises practical questions.

• Who has access to the suite after hours, including cleaning staff and building personnel, and can restricted rooms be excluded?
• Does the lease require notice and an escort for routine landlord entry?
• May you install your own access control and alarms, and do you need to remove them at the end of the term?
• If you are sharing a suite or subleasing to another firm, how will files, printers and reception be kept separate?
• Do you still need on-site file rooms, or can records move offsite or go digital and free up rentable space?

Professional firms are often owned by people approaching retirement, and leases can run longer than their plans. A lease signed without this in mind may leave a retired partner with a guarantee, or leave the remaining partners with more space than they need.

• Guarantees. If partners are asked to guarantee the lease, seek a cap and a burn-off, plus a way to release a retiring partner, with a substitute guarantor or other security if needed.
• Term. Line up expiration with a likely transition date. If retirements cluster at a certain point, a termination or contraction right near that date may be worth paying for.
• Mergers. Many smaller firms eventually combine with or sell to a larger one. Review how the assignment clause treats mergers and ownership changes, and ask for a permitted transfer right so that a deal is not held up by a landlord consent.
• Name changes. A new firm name affects signage and directory listings, so make sure the lease allows for this at a reasonable cost.
• Internal changes. Ordinary admission and retirement of partners should not count as a transfer. Ask for language that says so.

Raise succession with your attorney before the letter of intent. If a merger or sale is plausible during the term, the time to fix the assignment and guarantee clauses is while the landlord still wants your signature.

Many professional firms would rather not move during a stretch of client deadlines, and staying can be the right call. Still, an honest look at alternatives often helps. One firm approaching its lease end described what that process looked like:

Timing is the other issue. An accounting firm will not want to pack during busy season, and it may need construction and cabling done well ahead of the crunch. Work backward from your slow period. Then choose a commencement date and a move date that do not collide with filing deadlines, and leave some slack in case the build-out runs late.

1. Mark your blackout periods on a calendar and work backward from the first one after lease expiration.
2. Measure actual office use in both busy and slow periods, and estimate seasonal staff.
3. Test the market early enough that moving is a real option.
4. Compare buildings on total cost, with after-hours HVAC and parking included.
5. Have your attorney review guarantee, assignment and termination language with succession in mind.

TAG represents tenants and buyers, including accounting and other professional firms. We take a practical approach with partners: a short list of options, numbers on a common basis, and clear calls on the points that need a decision.