Poll: earning in-house trust is essential to winning business
Businesses describe the perfect pitch, the ideal partner-to-associate ratio and procurement practices in part two of a Patent Strategy survey on hiring external counsel
A crucial step to winning in-house trust during a sales pitch is to introduce the junior associates who will be working on cases for that business, according to a new poll from Patent Strategy.
We polled more than 40 in-house counsel from sectors including telecoms, fintech and pharmaceuticals, more than two-thirds (68%) of whom said they wanted to meet the associate team.
Some of those who indicate that they are not concerned with meeting associates say they are happy to meet the firm’s partners when they have a simple case in a small jurisdiction. But for very serious casework, they add, it is essential to meet the entire team.
Respondents explain that meeting associates helps them to build a relationship with the firm and establish the trust they need to know that competent attorneys are handling their case.
The European IP director for a manufacturing company in Italy says he does not want to interact exclusively with partners because younger members of the team might offer fresh insight and add value to the service.
“It is important to get to know the associates because they are younger people and, while they might have less experience, they can bring more enthusiasm to the table as well as more creativity,” he says.
The director of IP at a fintech company explains that meeting junior associates is really important for the relationship he is trying to build with the firm. “My pet peeve is when the partner does the pitch and all the talking and then the associate does the work. I want to hear from the associate who is doing the work. I want to empower people and encourage them to do the talking,” he says.
“My best advice for a good pitch is to show your familiarity not just with the legal concepts but also with the company and their methods of working. Show me you understand fintech, show me you understand our company and show me you understand what we are trying to do.”
Respondents say a good way firms can deliver an excellent sales pitch that proves they are interested in learning about the company is to ask questions about their potential client’s specific goals and business model. The worst thing a firm can do is walk into the pitch unprepared.
“It is very difficult to give a pitch in the cold; it shows you don’t know the company,” says a senior IP lawyer at a pharmaceutical company. “One of the most important things is the client-firm relationship, and communication and building trust. I want to see how they think and what strategy they want to adopt.”
They add: “We don’t want people under-pitching their price to try to get the job and then come back and change the quote. We’d rather have somebody who is honest.”
Meeting the junior associates is another way companies can understand the firm’s culture. In-house counsel say a sign that a firm is underperforming is a high turnover of junior associates. Keeping associates happy so that they grow with the firm is a good way to establish the trust needed to maintain a client’s business.
The chief counsel for IP at a life sciences company in Belgium says: “The reputation of the firm is important because we don’t want a firm with a rotating door of associates. The partner is also important, but we look more at the person who is going to do the work.”
The chief IP counsel at a consumer supplies company agrees, and says you can get a good understanding of the company culture just by talking to associates.
“You want to talk to everybody and get a feel for who they are. You do a lot of work with the associates and you want to see if they can do that work and if they understand the case,” she says.
The perfect ratio
A firm can deliver the perfect sales pitch to the in-house IP team and still not win their business. This happens in instances when it is not the in-house counsel but a separate procurement department that is responsible for making the purchasing decision. Fortunately for most firms, 80% of respondents said their IP team is given the choice of whom they hire.
“In the vast majority of cases, we are seeing law firms as a commodity that we cannot leave to procurement alone,” says the head of IP at a pharmaceutical company.
“It is vital that we, the in-house counsel, get the final say. It is not just a matter of who is the cheapest. In pharma, it is very important to win because we have so few patents for any one product.”
He tells Patent Strategy that generics companies could be more price sensitive because they have narrow profit margins, and thus might have separate procurement teams that make the purchasing decision based on budget.
The pharmaceuticals senior IP lawyer concurs that it is very important for his industry to get the right litigators working on cases because their business models depend on the monopoly rights given by a few essential patents.
“For big-ticket litigation, the general counsel makes the decision of whom to hire. The people who make regular decisions are the IP team, particularly if we already know the firm from our past experience in private practice,” he says.
Getting the correct ratio of partner to associate is another consideration for companies when they are deciding on external counsel. Responses were split, however, when they came to answer the question of what the ideal partner-to-associate setup would be.
Almost a third of respondents (31%) said they preferred a ratio of one partner to two associates, and another third said ‘one partner to three associates’. Remaining survey-takers said they wanted another arrangement entirely (19%) or did not know what setup they wanted (17%).
The European IP director tells Patent Strategy that not every case requires the same amount of work, but that the advantage of having a smaller ratio is that the associates stay more focused on the case if their time is not split between different clients.
“Three or four associates is too many sometimes. I’ve worked with one partner to one associate, but that is not always possible. It really depends on the case. For an average case, one partner to two associates is enough,” he says.
One reason IP counsel give for deciding on different ratios is that the ideal one really depends on the importance of a case and the jurisdiction it is in. In the US, where there is a discovery requirement, a partner would need the support of multiple associates. In other countries such as the Netherlands, however, the same case might require less work.
“Really it is difficult to generalise because it depends on the size of the case, the country you are in and the legal process that takes place. In the UK, the ratio would be very different to the Netherlands because of the nature of the litigation; so you need more associates compared to the Netherlands,” says the pharmaceuticals head of IP.
Smaller boutique firms offer the added advantage of a one-to-one ratio of partner to associate. These firms can be ideal for smaller companies that need the specialised attention that bigger firms would not necessarily be able to provide.
The pharmaceuticals IP chief counsel of IP in Belgium says: “One-to-one ratios are ideal, but these are boutique firms. There are situations where you can have one partner and one associate, and your case only goes to that one associate. If you are a small company, you can grow with that associate alongside you in the firm.”
Finding a good firm in a foreign jurisdiction where a company is unfamiliar with the local courts and language can be a daunting challenge.
Patent Strategy survey respondents said one way they begin their search is by asking for advice from firms that they have previously employed in their home countries. Since many law firms are international, moving with the same company provides an added benefit of familiarity.
The fintech IP director says a good way for a firm to win his trust is to admit that its counsel in a foreign jurisdiction might not be the best suited to meet his company’s needs.
“I’m not going to pick up the yellow pages to find a firm. I’m going to go through a trusted network, and if that network suggests a bad firm, it reflects badly on them,” he says. He adds that suggesting a different firm is a great way for external counsel to prove that they understand the direction his company needs to take.
The consumer goods chief IP counsel says that looking at ranking tables is another method she uses to begin her research for lawyers in a new country.
“There are a lot of different ranking books that can help you find a firm. That’s a good place to start because you can begin to target people to work with,” she says. “You don’t especially need a tier-one firm, especially if your volume of work isn’t big. In that instance, you might get a better deal going with a small firm.”
She also suggests making the extra effort to interview the firms in their local jurisdictions. Chatting with the associates and getting a feel for how the local courts behave is important to understand the local legal landscape.
“If you want to get more out of the local firm, you need to give more. A mistake people make is not going out to the country to meet the firm. You need some certainty to know how it is going to do the work,” she says.
The head of patent affairs for a Germany-based pharmaceutical company says word of mouth from his colleagues isn’t enough to make him decide on a particular foreign firm. He says that if a company really wants to find the best expertise, it is important to shop around and interview several candidates.
“These days I wouldn’t just rely on my colleagues’ opinions, but instead go further to check if these guys are real experts and their records. Spend some time looking for a firm and don’t take the first one that comes along,” he advises.
Establishing trust with the firm, whether it is local or foreign, is the most essential step in forming a relationship between a company and private practice firm. The director of IP at a Finnish healthcare company says it is important for him that the external firm feels like they are part of a bigger team with his company’s in-house counsel.
“I need to feel like we are speaking the same language and like I am working with my own employees who understand our business,” he says.