What Corporates Want: recommendation
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What Corporates Want: recommendation

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A vast majority of corporates – especially smaller businesses – rely on a trusted referral when instructing external counsel, according to a survey of nearly 29,000 in-house counsel

In-house intellectual property counsel want their external advisers to come highly recommended by peers and other in-house professionals, as glowing work references usually translate into reliability and superior quality.

This is evident from a study covering nearly 29,000 in-house counsel across Managing IP+ and its sister brands IFLR+ and ITR+, which shows that recommendation factors considerably into in-house lawyers’ decisions to hire outside counsel.

Of those who responded to the survey, 78% said recommendation is important or very important to them. For Managing IP+ survey respondents specifically, the result is nearly identical, with 77% marking recommendation as significant.

Subsequent conversation with in-house counsel validates the findings of the research.

A senior IP attorney at an IT company in Europe said: “Recommendation is a really big push-up for a firm. It would mean that I’d at least have an initial discussion with the firm.

“If I find they have a reasonably diverse team, they will move further along the hiring process.”

Of course, ensuring that any partner firm is highly recommended isn’t a mere check-box exercise for in-house counsel.

Joseph Kucera, IP strategy director at tech company Pure Storage in the US, noted that checking referrals or recommendations doesn’t mean simply having conversations with those on the list of contacts a firm provides while making its pitch.

“It’s like someone asking you to call their mom for a referral,” he noted.

Kucera said what he’d do instead is purposely seek out which companies that firm may have worked for in the past by going through IP office records and then reach out to them for a chat.

But while it’s clear that recommendation does matter a lot, in-house counsel are picky about who that recommendation comes from.

Said one IP counsel at a personal care company in India: “Recommendation is very important to me. But I won’t ask it of just anyone, and I would do my own research to back up any recommendation.”

She added that an in-house counsel’s recommendation matters much more than one by a law firm.

“In-house counsel understand each other’s challenges and struggles better, so any recommendation coming from an in-house counsel would carry much more value.”

It’s clear that recommendations carry much weight, so law firms must maintain good relations with their existing and former clients if they want to receive high praise.

Regional

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Recommendation ranks moderately high on the priority lists of in-house counsel across all regions when hiring external advisers.

Over three-quarters of counsel in the Americas, APAC and EMEA said recommendation would factor into their decision to hire an external counsel.

Counsel from the Americas and APAC showed the most interest in whether their external advisers came with excellent reviews, with 80% of the respondents from both regions marking recommendation as important or very important.

Those in the EMEA weren’t far behind, with 77% of the respondents finding it significant.

The Managing IP+ survey results are more or less aligned with the findings of the broader survey across all brands.

Of those who found recommendation important or very important, the Americas came on top with 79%, followed by APAC with 78% and EMEA with 77%.

Overall, the similar percentage points indicate that in-house IP counsel across all regions find it easier to hire external advisers whom other in-house counsel or private practitioners have referred.

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Across all brands, APAC produced the highest mean score of 78.9%, with Americas trailing closely at 78%. EMEA was slightly behind, with a mean score of 75.9%.

Global revenue

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In terms of revenue distribution, companies in the lowest bracket showed the most interest in recommendation, with 81% of survey participants responding it was important or very important to them.

Corporates in the highest earning segment, on the other hand, showed the least interest in how highly recommended a potential partner firm is, with only 74% marking it as significant.

The data indicates that companies with more purchasing power may have better priorities than recommendation, such as the depth of their external counsel’s team and expertise, as revealed in a previous report.

The Managing IP+ survey revealed contrasting trends to the broader survey across all brands.

Companies in the highest revenue bracket expressed the most interest in recommendation, with 79% flagging it as important or very important.

On the other hand, corporates in the lowest earning segment showed the least interest, with only 76% marking it as significant.

The findings suggest that high-earning companies with IP-rich portfolios value whether a prospective external adviser has positive reviews much more than companies with more tax and corporate work.

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Overall, across all brands, companies in the lowest revenue bracket generated the highest mean score, at 79%.

Industry

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From an industry perspective, the technology sector expressed the most interest in recommendation, with 82% of respondents marking it as important or very important.

The professional services sector also highly values recommendation, with 81% of participants highlighting it as significant.

An average score of approximately 78% across all industries demonstrates that in-house counsel find external advisers that come highly recommended by peers attractive.

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Overall, across all brands, the technology industry expressed the most interest, with a mean score of 79.8%. The professional services sector wasn’t far behind, with a mean score of 78.9%.

Practice area

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As far as practice areas are concerned, litigation lawyers seem most keen on whether their external advisers are well recommended by industry peers, with 81% of respondents saying it is important or very important.

In-house counsel across all other practice areas also demonstrated moderately high levels of interest – between 74% and 78%.

Overall, the relatively similar scores suggest that in-house counsel, regardless of their area of expertise, pay close attention to how well recommended are the external legal teams representing them.

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In terms of mean scores, litigation survey participants showed the highest interest, at 78.9%.

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.

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Special Projects Editor Managing IP
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Sukanya manages the special projects published on Managing IP, including the IP Ones to Watch, 50 Most Influential People in IP and What Corporates Want. She also covers all IP-related issues in Asia including trademark, copyright, patent and design matters.
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