The law firm practice landscape

As well as surveying corporate trademark professionals, we polled counsel in law firms across the world to gauge workload trends, optimism levels with respect to future work and shifts in the type of activity they are undertaking for clients.

In last year’s survey, a significant majority of respondents reported that both their trademark work and income was on the rise and that trend continued this year. This naturally follows on from the previous update, in which we noted that corporate counsel are sending an increased amount of work to law firms.

Specifically, trademark-related work was at a nine-year high and – following a small dip in 2018 – trademark practice income was back at the 2017 level. This has also played into team size, with 51% reporting that the firm’s trademark practice had grown in personnel numbers (itself a seven-year high). In terms of income, almost one-third reported that fee levels had increased over the past year, with one-third expecting further increases. In short, there is more work among respondents, generating more income, than has been the case in almost a decade.

As to why there is an uptick in work, a variety of reasons were cited. These ranged from increasingly competitive markets for clients (“who increasingly use intellectual property” to protect their businesses) and brands entering new markets to increased counterfeiting threats and an upswing in new businesses focused on developing their brands. Meanwhile, one boutique practitioner observed: “Smaller companies have grown in size and larger companies are looking to spend less on portfolio management – so they are increasingly coming to our smaller firm.”

For some, the positive trend has resulted from internal review, with one respondent observing: “The clearer strategies and fee arrangements we now have in place, together with increased liaison with clients on budgets, have led to the increases [in work and revenue].” Others pointed to the successful cross-selling of services across practice areas, improved social media and marketing activities, and new hires bringing business from their previous firms.

Of course, not all firms are flourishing and even those experiencing a rise in fortunes have to be mindful of the price sensitivity of clients – one practitioner pointed out: “It is just not possible to charge high rates to clients in intellectual property except for specific matters for which the client is really ready to invest.”

Instead, many clients seek, from the outset, a commitment to spend levels, with one lawyer noting that “more clients have asked for initial assessments of their ‘chances of success’ (ie, a priori advice) to be included with the reporting of any bad-faith applications, without any additional charges”. Another respondent concurred, adding: “Because clients are more cost conscious, they often require estimates and sometimes uncharged preliminary advice. Some clients have a financial risk policy, which induces reporting requests which are time consuming and difficult to charge.”

Over the past year, has your trademark-related workload:

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Over the past year, has your firm’s trademark practice income:

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Over the past year, has the size of your firm’s trademark practice in terms of personnel:

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Interestingly, though, the client focus for that spend appears to be shifting slowly towards core services. While 62.3% of law firm practitioners stated that clients are demanding additional levels of service and support, this is at the lowest level for five years.

One thing that is helping firms to remain competitive is the harnessing of new technologies. One senior legal expert observed: “We can now offer more competitive fees thanks to effective e-filing and work procedural arrangements, IT applications and a stronger professional team who can handle work more effectively and in a short time.” Technology was frequently cited as a driver of efficiencies and as tech develops, and clients remain focused on value, this need will likely continue.

As to the enforcement work with which external counsel is tasked and threats to their clients’ brands, the picture is largely unchanged year on year – with counterfeits (particularly online) the most prevalent threat. However, in terms of additional areas where clients are seeking advice, topics around privacy, data protection and cybersecurity were frequently cited. In many instances, a broad practice that is able to tap into emerging areas of brand risk is clearly paying off.

Over the past year, have you changed your fee structure for a significant portion of your revenue?

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Currently, what percentage of your revenue comes from the following fee structures:

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Over the past year, have your fee levels:

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Have clients demanded additional levels of service/support over the past year:

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In the next 12 months, how do you expect your trademark fee levels to change?

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Has your client base changed its enforcement strategy in the past year?

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On a scale of 1 to 5, how would you rate these issues in terms of the threat that they pose to your clients’ trademark portfolio/brand(s)? (With 5 being a significant threat and 1 being no threat)

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