Poll: In-house lawyers give reasons to fire external counsel
Part three of the Patent Strategy survey on hiring external counsel reveals why companies decide to switch firms, and the importance that diversity and social responsibility policies play in hiring practices
Losing a case is not the only reason to sack a law firm, according to our survey of more than 40 in-house patent attorneys.
In part three of a Patent Strategy poll on external counsel hiring practices, respondents from across the US, Europe, and Asia were asked what factors contributed to their decisions to switch private practice counsel.
The results showed that 80% of respondents have fired a firm in the past, and the reasons they gave included poor communication, exorbitant billing, and slow responses to requests for information.
In contrast to the second part of our survey, in which lawyers said they hired firms because they trusted the approach to casework and litigation strategies, respondents said the main reason they fired external counsel was a loss of trust.
The European IP director for a manufacturing company explains that he lost two cases with a previous law firm, but that that loss was not the core reason his company decided to stop working with them.
“I didn’t like the way the lawyers approached the case and they weren’t responsive,” he said. “I had to chase after them to know what was going on.”
The director of IP for a California fintech company says he also had communication issues with past firms, but that the main reason he decided to switch services was poor service.
“We’ve changed firms in the past because they changed staff and didn’t tell us. Ultimately it was about the poor quality of work and the unrealistic billing that didn’t match said quality.
“We do not make a habit of switching firms because it is a lot of work for us. But sometimes we have to,” he says.
Sources say part of their selection criteria for choosing a firm is whether partners have relevant case work experience in a specific field. Misrepresenting expertise and experience during the pitch is another way respondents say firms lose end up losing their business.
“The main reason I would sack a firm is if the quality of service was not what was promised. Another might be that they gave disappointing results or didn’t listen to us,” says the senior IP lawyer at a US based pharma innovator company.
He tells Patent Strategy that a firm may make the pitch with a well-respected partner and then pass the work on to a junior associate. The lack of transparency created when a firm passes work on to associates can erode the trust a business needs to feel.
“You leave when you see a lot of bad habits, such as when you only see the partner but the associate is clearly doing all the work, or the partner took half the work from the associate and put his name on it,” says the chief counsel for IP at a European life sciences company.
“We want to build a relationship with the person doing the work and we want to make sure that the culture of the firm doesn’t push the junior associates out the door. It’s a red flag to see associates leave.”
The head of patent affairs at a Germany-based pharma company also cites poor quality of work and mishandling of a case as key reasons he has left a firm’s services in the past. Because pharmaceutical companies rely on a few essential patents to protect their products, getting the very best counsel is essential to their business models.
“We’ve switched before when the quality of work was far lower than what we expected. The partner made the deal and then gave the work to a less experienced associate who wasn’t as knowledgeable of the field,” he says.
Fortunately for law firms, in-house lawyers understand that not every case can be won. The head of IP at a Switzerland-based pharma company says he’s never left a firm solely because it lost a case. He explains that he would only switch firms if its lawyers lost the case because of sheer incompetence.
“We know we won’t win every case and that is not something we necessarily hold against the firm. We’d only fire them if, after review of the case, it came to light the firm had not really served our company well,” he says.
Diversity and social responsibility
Survey respondents said diversity plays an important role in their hiring decision, with more than a third (35%) reporting that racial and gender diversity is important or very important. More than a fifth of survey takers (21%) said diversity was only slightly important; although 40% said it was not important at all.
The manufacturing firm European IP director explains that while he does not particularly look for diversity when making a hiring decision, it is a red flag for him if the partners all look the same.
“I already work in a multinational company with people of different backgrounds, and I expect outside counsel to follow similar hiring practices. I wouldn’t hire a firm made up of dinosaurs; but diversity isn’t something I especially look for,” he says.
Other in-house lawyers also say that because diversity is one of their core corporate values, they expect any firm they hire to be a reflection of those standards. Diverse teams lead to diverse decision making, which can be a real advantage for a firm that relies on original decision-making in a competitive environment.
The fintech IP director says the law firm he hires should also understand his diverse customer base in addition to being a reflection of his company’s values on diversity.
“The population we serve to empower financially is diverse. Our work is diverse. This is an important aspect of our work. We want a firm with true diversity. Walk the walk,” he explains.
The IP lawyer at the pharma innovator company agrees, and adds that diversity shouldn’t be a matter of having nice words in a company’s manifesto to win business. He says firms should hire from a diverse candidate pool so they can guarantee that they get creative thinkers who can help solve the most complicated problems.
He says: “Diversity just brings different experiences and ideas to decision making. This is especially true for complicated cases that have never been tried before and you need the spark of creativity.”
Ian Hiscock, head of IP oncology at Novartis in Switzerland, tells Patent Strategy that his company looks for diversity in its external counsel because it enhances creative thinking, innovation and problem solving.
He says: “We apply this commitment in our hiring choices as a way to improve diversity and inclusion in the legal ecosystem. We recognise that unless we take an active interest in the inclusion agenda of the law firms that we use, improvement to diversity and inclusion in the legal industry is likely to be slow.”
For the general counsel and head of IP at an energy company in the UK, diversity is not just about gender and race; it is also about background and experience. “Different genders and perspectives bring a wealth of variables that wouldn't be on the table if you didn’t have that. I also think of diversity as a matter of age and qualification,” she says.
“You'll have an old crusty partner, but sometimes there is nothing better than a hungry associate who is ambitious that will catch something the others didn't spot.”
She gives executive boardrooms as an example of why diversity is essential to a company. If a board is made up of the same types of people, the company’s decision-making will suffer. The same goes for legal advice.
“This lack of diversity is an indictment of the legal industry and shows you how they are not keeping up with the research around this, or people's experience of making informed decisions and taking informed advice. Getting informed advice is critical,” she says.
Other respondents say racial and gender diversity is not as important as competence. The IP director of a European medical device company says he looks for the best representation he can find, but that diversity has the additional value of making firms more creative.
“Race and gender are not important, but expertise is. It doesn’t matter who is there, but old fashioned counsel do things in the same way to how they have been done for the past 30 years. They aren’t very flexible in their thinking,” he adds.
A firm’s social responsibility policy can also be an important factor in the hiring decision. Half of respondents reported that the social responsibility policy was either important or very important to their hiring decisions. Only a fifth of lawyers said that it was not important at all.
“It reflects well on a firm if they can do some pro bono work,” says the assistant chief IP counsel at a US-based engineering company. “It is not the deciding factor, but I would appreciate it if firms would talk about their social responsibility programmes. It does work in their favour.”
The pharma head of patent affairs agrees that a social responsibility policy is a nice thing for a firm to have, but that it isn’t necessarily the first thing he looks for in a law firm. A good policy can, however, be one small contributing factor that would make him choose one firm over another.
“If there are two law firms that are exactly the same and the only difference is the social responsibility policy, it would be the deciding factor, but it’s not something I look at first,” he says.
How to woo business
When asked what one thing a firm could do to win their business, in-house lawyers told Patent Strategy that they look primarily for a solid record of success in their company’s sector, and good people they can build a working relationship with.
The senior IP lawyer at the pharma innovator company says his decision is all about who he can trust to best represent the needs of his company:“It is important to develop a working relationship with us. But one thing that underlines our decision is the quality of service provided by the firm,” he explains.
Putting your best foot forward is another piece of advice from the German head of patent affairs. He explains that firms should present their record to potential client as proof of their expertise in the sector: “I could be won over if you have experience in a field, and if you’ve already won a similar case for a client. That is something I would give a lot of weight.”
A good piece of advice respondents gave to win and keep their business is to be honest. This includes honesty in a firm’s strengths as well as its weaknesses, and honesty in billing and in who is doing the work.
Like any other part of life, trust is the bedrock to building a good relationship.