"Our lives have changed on the back of internationalisation, on the back of technology," said Joanne Hon, vice president and head of Asia business development for outsourcing company CPA Global.
Hon, who moderated the session, cited a statistic from Forrester Research stating that the global market for outsourcing is expected to reach $1 trillion by 2020.
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Joanne Hon |
Legal outsourcing is expected to grow by 40% annually until 2020 and a majority of that growth will be from the IP sector, she said.
John Hanssen, managing director of legal - Asia-Pacific for DuPont, and Emmanuelle Prono, assistant general counsel for Techtronic Industries, shared their experiences during the session.
DuPont is a US science company that covers 13 different industries from seeds and agriculture to polymers and materials.
Hanssen said that the move to outsource began in 1992 when the company resolved to slim down the number of legal providers it has from more than 300 to, at present, fewer than 50.
"The decision was to systematically start thinking about legal as a business unit that could generate revenue," he said.
Hanssen said that DuPont outsourced support work for its US litigation, including document collation, issue logs and cataloguing, which had previously been done by law firms. "This has been very successful for us," he said.
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John Hanssen |
He added that it was important to move work to where it could be done most efficiently, which in the case of DuPont could mean moving work within the company but to another location, or to outsource to another company: " Can we make use of outsourcing companies' economies of scale? Or do we have such a large volume that we make use of own internal economies of scale?"
Hanssen said the outsourcing companies often have "a narrower subset of work and a narrower subset of skills that can really drive efficiencies in those processes much more than a full-function legal organisation can."
DuPont has also outsourced some renewal work, patent proofreading and translation work. But the company's experience of expanding to higher end work such as freedom-to-operate searches, patent landscaping and even drafting "has not been universally positive", he said.
Techtronic Industries is a Hong Kong-based maker of heavy tools that was founded in 1985 and listed on the Hong Kong stock exchange in 1991. Since then the company has acquired a number of business, including Hoover. Prono said that, during these acquisitions, the company has had to outsource the assignment process for the patents and trade marks it was acquiring because of the volume of paperwork.
She also said that the renewal and maintenance of IP and the use of investigators to help with IP enforcement in China were other areas where the company had outsourced work.
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Emmanuelle Prono |
Prono said that it was vital to consider whether the work was suitable to be outsourced and how it might free up employees to take on other tasks.
Prono and Hanssen agreed that time saved was an important benefit but differed over the cost benefit. Hanssen said that outsourcing could reduce costs by 25% to 40%, while Prono said that Techtronic had not yet seen such savings.
But outsourcing does not come without risks. Hanssen cited language, education and communication issues, data security and the high turnover rates at outsourcing companies as reasons to be cautious.
Hanssen said that DuPont prefers to train a captive team within an outsourcing provider but said that the high attrition rate can make this a frustrating process: "These people are in high demand and therefore fairly mobile," he said.
Both speakers stressed the importance of maintaining internal expertise. "Even if an activity is outsourced, try to keep a certain part of that IP activity in-house," said Prono.
Hanssen said that his company maintains internal expertise "with close connection to that outsourcing process" so that in the event the vendor needs to be changed, "we don't lose capability in the process".
Hanssen added that building a strong relationship with the outsourcing company was vital: "If you develop the right communications and reward processes for the firms, it enables them to focus on the aspects of the work for which we've built in the rewards for them and ultimately generates a better return for the law firm too."
While IP outsourcing typically refers to lower value work, Hanssen said the relationship can develop. "To achieve the greatest value from this, you want to keep testing that notion, you want to keep seeing just how far up the chain you can push this whilst still maintaining the quality and responsiveness and liability, because clearly the further up the chain you can push that kind of outsourcing activity, the greater potential for savings."
The seventh Asia-Pacific IP Forum was organised by Managing IP magazine and sister publication asialaw.com. CPA Global was one of the sponsors of the event, which took place at the Kowloon Sheraton Hotel in Hong Kong on September 1 and 2 and was attended by over 200 people.
