Technology is changing how in-house intellectual property counsel operate, with many using internal tools to automate patent drafting and to reduce the time spent on clearance searches.
It’s not surprising, therefore, that corporate counsel want the law firms they work with to be equally technology-savvy.
Managing IP and its sister brands IP STARS, IFLR1000, and ITR surveyed thousands of corporate counsel on whether the extent of law firms' technology use could influence their decisions to engage them.
Of the 28,272 corporate counsel who responded to the surveys across all brands, 44% said technology use is important to them, while 21% answered it is very important.
As far as the IP STARS survey is concerned, the results are above average. Nearly half (48%) of the surveyed in-house counsel indicated technology use is important, with 24% highlighting it as very important.
During follow-up conversations, in-house counsel said how a law firm employs technology to improve efficiency, how optimised its internal systems are, and how quickly it can offer practical advice using those systems can influence its appeal.
Arindom Hazarika, senior trademarks and brand protection counsel for South Asia and Africa at Western Digital, said “tech-savviness is a massive plus point” when determining a potential external counsel's suitability, even though it may not be the only deciding factor.
Many in-house counsel, including Hazarika, want to work with law firms with internal tech-based tools that put them ahead of the competition.
The IP counsel at a food and beverage company in Seattle said he wants to move towards making more data-based decisions, and he has found that only law firms with sophisticated tech-enabled databases can assist with them.
He said he likes firms that manage data efficiently, adding: “If I want investigation reports for the last five years, our external counsel should be able to share that promptly.”
Niall Trainor, managing IP attorney at Hasbro in London, is an outlier, however. He isn't too bothered about whether an external counsel employs sophisticated technology so long as he can get “the desired solution for the right price”.
Of course, as more law practices use technology to increase efficiency, the ability to offer IP solutions for competitive prices will inevitably come down to where a firm stands compared to its industry peers.
Therefore, whether IP counsel expressly demand it or not, technology adoption may not be optional for law firms in the long term.
Regional
From a regional perspective, nearly half of the respondents from each surveyed region said technology use factors into their decision to hire external counsel.
From the Americas, 46% of survey participants indicated that technology use is an important factor when deciding whether to engage an external counsel. The percentages for APAC and EMEA are slightly lower, standing at 44% and 43% respectively. For those who expressed that technology use is very important, the Americas again came on top with 24%, followed by APAC (22%) and EMEA (20%).
The data collated from the IP STARS in-house survey echoed the results of the one conducted across all research brands. Respondents in the Americas showed the most interest, with over half (51%) of them indicating technology use is important, and 25% saying it is very important. In the APAC region, the percentages are 49% and 22% respectively. EMEA showed a contrasting trend to APAC – with a higher percentage of survey participants who said technology is very important (25%), but a lower proportion (47%) who answered it is important.
Overall, across all surveyed brands, the Americas had the highest mean score of participants who saw technology use as very important at 72.3%, followed by APAC at 70.6% and EMEA at 68.8%.
Global revenue
The aggregated data across all brands also revealed that the revenue of a company may have a direct bearing on how likely it is to consider technology use before hiring external counsel.
To illustrate, 45% of the respondents at companies with $5 billion or more in revenue said technology use is important to them, followed by corporates with $500 million to $4.99 billion (44%), $50 million to $499.9 million (43%), and less than $50 million (42%). In other words, companies with higher revenues were more interested in technology use.
Of counsel at corporates with less than $50 million, 22% said technology use is very important to them. Corporates with $50 million to $499.9 million, and those with $5 billion or more, also revealed similar preferences at 21% and 20% respectively. There was a slight dip at 18% for corporates with $500 million to $4.99 billion in global revenues.
In the IP STARS in-house survey, companies with $500 million to $4.99 billion (48%) and $50 million to $499.9 million came on top, with 51% saying they found technology use by prospective external counsel important. This isn't aligned with what the broader survey across all research brands suggested, in which companies in the highest earning bracket showed the most interest. In contrast, in the IP STARS survey, companies in both the highest and the lowest revenue segments came at the bottom, with a score of 49% each.
Of those who said technology use is very important, companies with less than $50 million in global revenues led with a score of 25%. This is consistent with what the broader survey across all research brands revealed. Companies with $5 billion or more, $50 million to $499.9 million, and $500 million to $4.99 billion followed, at 24%, 23%, and 22% respectively.
The mean scores collated across all brands revealed most interest from survey participants at companies with less than $50 million in global revenue (70.1%), closely followed by those with $5 billion or more (69.7%), $50 million to $499.9 million (69.5%), and $500 million to $4.99 billion (68.6%).
Industry
Among the sectors surveyed, telecoms counsel seem to value technology use the most, with 49% of respondents saying it is important to them. Other counsel who showed similar preferences belonged to the advanced manufacturing (48%), automotive and transportation (46%), and consumer companies (46%) industries.
Corporates in technology (44%), professional services (44%), real estate (43%), power and utilities (42%), and financial services (41%) sectors also strongly indicated that technology use is an important factor that would play into their decision of hiring external counsel.
Overall, the telecoms, technology, and consumer sectors expressed high interest with mean scores of 72.9%, 72.6%, and 72.1%, respectively. The advanced manufacturing industry also showed significant interest with a mean score of 71.4%.
Practice area
As far as practice areas are concerned, IP lawyers seem to be most keen on technology use.
Across the brands surveyed, 48% of the IP survey participants said technology use is important, followed by 47% of litigation survey participants, 45% of tax survey respondents, and 43% of financial and corporate law participants.
The mean scores also showed a similar trend. IP counsel showed high interest with a mean score of 73.3%, followed by litigation (71.9%), tax (71.4%), and financial and corporate law (69%).
Methodology
Through our primary research with in-house counsel representatives, we ask them to rate a range of attributes and their importance in decision-making when selecting outside counsel.
We have aggregated the responses from our practice area-specific surveys in 2022 and 2023 and analysed the results in this report series. The data highlights the extent to which in-house counsels’ views on these attributes differ between industries, regions, revenue sizes and practice areas.
In total we have analysed responses from over 25,000 in-house counsel respondents over the two-year period.
To read the previous instalment of What Corporates Want, click here.
