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This article at A List Apart states eloquently the reason whitespace is so powerful when creating any graphic element (text, illustration, or a combination of both). The best example of how law firms abuse whitespace is in tombstone ads. Almost 100% of firms using tombstones will line the entire ad space with boxes, inside boxes, inside more boxes in the attempt to list as many transactions as possibly readable. The thinking behind this type of space use is that readers will be terribly impressed with all of the work a firm does. In truth the space is so packed and jumbled to the eye of the reader that nothing but confusion is communicated.
I do like Mark Boulton's point about use of space: Less whitespace = cheap; more whitespace = luxury. Eloquently put Mark.