What is the general definition of occupancy costs?

Occupancy costs are best defined as the expenses incurred for the physical space used in business operations. This typically includes rent or mortgage payments, property taxes, utilities, maintenance costs, insurance for the facility, and any other related expenses that are necessary to operate within a physical space. Understanding occupancy costs is crucial for legal managers as it directly affects budgeting, financial planning, and overall operational efficiency. These costs are fundamental to maintain the physical environment necessary for the business's functioning and productivity.

Employee salaries, technology upgrades, and marketing expenditures do not fall under the definition of occupancy costs because they pertain to different aspects of business operations. Salaries relate to human resources, technology upgrades involve investments in systems and infrastructure, and marketing initiatives deal with promoting the firm's services. Each of these categories addresses separate operational needs and financial planning considerations distinct from the physical space occupied by the business.