In-house intellectual property counsel are no strangers to what brand value brings to the table, so it’s perhaps unsurprising that they want to work with external advisers who can demonstrate a strong reputation.
According to a survey of over 28,000 in-house counsel across Managing IP+ and its sister brands including IFLR+ and ITR+, 89% of respondents ranked an external adviser’s reputation as important or very important while deciding whether to hire them.
While the results are slightly lower than average for in-house IP counsel specifically, at 85%, the score still suggests a strong preference for reputation among in-house IP counsel.
During a follow-up conversation, Joseph Kucera, director of IP strategy at IT company Pure Storage in the US, agreed with the findings and said the reputation of the law firms he works with was very important to him.
“When you are interviewing firms, everyone puts their best foot forward. But the reputation built over the years helps you know the reality,” he said.
The general counsel at another US-based company also flagged reputation as “extremely important”. However, he added that his characterisation of reputation could differ from that of others.
“In my mind, rankings secured by a firm have very little to do with actual reputation.
“But if the firms I already work within the US tell me that a non-US-based firm isn’t good, then I wouldn’t work with that non-US-based firm,” he explained.
However, he added that firm rankings have some value and that highly ranked firms often have more extensive networks and connections than non-ranked firms.
“The highly ranked firms may come in useful in growing our organisation by allowing us to build relationships that can help pull ourselves up.”
Cassandra Derham, head of IP at IT company Amadeus in France, said it's always nice to have heard of a firm but it's not the only decider because "a big reputation often means big charges".
Also, it can be hard to figure out whether a firm's reputation is based on its relationships with clients or success in court, Derham noted.
This can make it difficult for an in-house counsel to pick a firm based on reputation alone, she added.
While firms with a proven track record may come with a higher price tag, it’s clear that plenty of in-house counsel may be willing to pay that premium for the value on offer.
Regional
Among all three surveyed regions, counsel from the Americas seem to care most about the reputation of their prospective external advisers, with 92% of respondents flagging it as important or very important. APAC trailed right behind, at 90%, followed by EMEA at 88%.
In the IP STARS-specific survey, the Americas and APAC counsel showed equal interest in reputation, with 86% of participants marking it as important or very important. The percentage for the EMEA was slightly lower, at 84%.
Overall, across all brands, the Americas produced the highest mean score at 86.7%, with APAC trailing behind at 83.7%. EMEA received a slightly lower mean score of 82.9%.
The data suggests that counsel based in the Americas are more likely to opt for firms with a strong track record, even though they tend to be more expensive than their less-reputed peers.
Global revenue
In terms of revenue distribution, companies in the lowest earning bracket with less than $50 million in global revenues expressed the most interest in the reputation of external counsel, with 90% of the respondents saying it is important or very important.
Companies with $50 million to $499.9 million and those with over $5 billion in global revenues tied for second place, with 89% of respondents in both categories responding that reputation is important or very important.
Of those with $500 million to $4.99 billion in global revenues, 88% expressed an interest in reputation.
An average score of nearly 90% across the board suggests reputation is a high priority for all corporates irrespective of their earnings.
In the IP STARS survey, companies in the highest earning bracket showed the most interest in reputation, with 87% marking it as important or very important. This diverges from the findings of the broader survey across all brands, in which companies in the lowest financial segment had topped the relevant category.
Still, in the IP STARS survey, companies in the lowest financial segment secured the second position in terms of interest in reputation, with 85% finding it important or very important.
Overall, across all brands, companies with less than $50 million in global revenues received the highest mean score, at 84.6%.
Industry
From the perspective of industries surveyed, real estate and construction companies expressed more interest than others in reputation, with 91% saying they found it important or very important. Several other industries, including advanced manufacturing, financial services, professional services, and telecoms showed a high interest, at 90%.
A 90% or above score across most industries again demonstrates that the reputation of external lawyers is a high priority for in-house counsel irrespective of which field they work in.
The professional services sector led the groups that flagged reputation as very important, at 53%, with the consumer sector (51%) the next biggest backer.
Overall, across all brands, the professional services industry expressed the most interest with a mean score of 85.3%. It was followed by the consumer and the real estate and construction sectors with mean scores of 84.8% each.
Practice area
As far as practice areas are concerned, financial and corporate law and litigation lawyers seem to be most keen on reputation, with 90% of those respondents saying it is important or very important.
Tax participants also demonstrated a high level of interest, at 89%, followed by IP lawyers at 85%.
Overall, the data suggests financial and corporate, litigation and tax lawyers prioritise reputation more than their peers in IP and life sciences.
In terms of mean scores, litigation survey participants showed the highest interest, at 85.1%. The next biggest backer was financial and corporate law respondents, with a mean score of 84%. Tax respondents secured the third-best spot, at 83.5%, followed by life sciences, at 82.2%.
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.
