How to make money in the future
- In an increasingly competitive environment, practitioners will have to adapt to clients’ needs – like it or not
- One key to success will be developing value-added services and tools
- Communication with clients is also key, including managing expectations and knowing when to say no
Less work being outsourced by clients; many tasks that can be automated; greater competition from non-legal providers; and a rapidly changing business environment: it sounds like a cocktail of bad news for trademark practitioners. Faced with these threats, some might wonder “How will we continue to make a living?” Luckily, there are strategies they can adopt.
One will be to accept and adapt to clients’ systems. So far, law firms have struggled with this. Several trademark practitioners say that they do not like dealing with corporate billing systems, which are all too often unsuited to trademark work, riddled with bugs and inflexible. And firms have to buy licences for multiple systems if clients use different ones. In the future, there will be no excuses. The bigger clients will expect their outside counsel to use the systems they want – not just for billing, but also for portfolio management, auditing, document management, recording examples of trademark use and even prosecution. Such clients will increasingly be likely to have cloud-hosted sites which their outside advisers can access securely. “Clients that are still paper-based will spread more and more online and into the cloud,” says one in-house counsel.
The more successful and creative law firms will invest in developing such services themselves, as a service to clients and potentially for other counsel around the world to use. In the next decade, web portals are likely to become the primary means of communication between IP practitioners and their clients: they will be where instructions are sent, where progress on cases can be monitored and matters delegated, and where fees will be tracked. “Law firms will have to lead and put data in the cloud,” as one in-house counsel says.
It goes without saying that these portals will have to be comprehensive and secure. But they will also need to be user-friendly: the future in-house counsel will be someone who has grown up with Facebook and Amazon, and who is used to accessing them on their phone wherever they are. They will expect similar accessibility and functionality in their professional life, with functions such as task lists, deadlines, instant messaging and chats. “The legal industry has been slow to adopt new technology so far. We’re anticipating a rapid shift in that,” as one servicer provider says. But there’s also a catch, as one former in-house counsel points out: “The better the system you have, the easier it might be for the client to transfer.” In that context, law firms will need to think more carefully about providing for minimum terms for clients, as well as termination clauses.
To develop and maintain such complex systems, firms will make more use of outsourcing and offshoring. Baker McKenzie, which offers end-to-end trademark services to big clients, has been a pioneer in this respect: it now has about 250 staff in its team in Manila, the Philippines, as well as 30 IP paralegals in Belfast, Northern Ireland. Other firms will develop standalone companies offering non-legal services to clients (and other law firms). For example, Ladas & Parry has set up a company, Principium Strategies, that provides domain and trademark watching services. Its latest trademark research product, Lightship, was launched in May 2018 with 10 years of trademark application data in English and the option to set up automated queries. One person who has already trialled it believes it could transform trademark work. For some firms, alternative structures will also become more common, such as Keystone Law or K2IP in the United Kingdom, or Potomac Law Group or Atrium (a new firm for start-up companies) in the United States, particularly if they cater to millennial work expectations; these are discussed in more depth in our patent practice report.
Whatever the model, good communication will be key. Email could eventually go the way of the fax. And that applies to everything that law firms do: pitches, quotes, advice and client communications. The thousands of newsletters that law firms send out by email (and which few people read) will gradually decline. In their place will be smartphone apps, blogs and social media accounts. Trademark practitioners will have to put aside their reservations about Twitter, Instagram and the new apps that emerge and find a way to embrace them – as that is where they will find their current and future clients.
The future of billing
There is lots of talk about the decline of the billable hour in legal work. In this respect at least, trademark practitioners may be ahead of the game. Much routine trademark work is already charged on a fixed-fee basis, with hourly billing reserved for the more complex tasks such as big litigation.
However, trademark practitioners may have to adapt as the actual cost of routine work falls. In jurisdictions without substantive examination, it is possible that the cost to the IP office of examining a trademark falls to virtually zero (as all of the formalities can be checked by computer). For political reasons, offices may not choose to reduce fees to this extent (and may even increase them, as some Middle East jurisdictions have recently done), but any cuts will put more pressure on firms to reduce their fees too. “Trademarks used to need a gatekeeper in each country, in what was effectively an administrative role. Now people are not prepared to pay lawyers for that data,” says one practitioner.
For simple tasks, clients will want simple solutions – and bills that reflect them. “I want all that data in a database where I can run a report, with the renewal dates over 10 years so I can plan the budget. One of our outside counsel was using an Excel spreadsheet and it didn’t even have the renewal dates on!” says one in-house counsel. “I want a job to be done without 15 people having to touch it,” comments another. The keys to keeping clients happy will be efficiency, reporting and transparency.
It may sound easy but, as one former in-house counsel notes, it has the potential to turn the traditional trademark business on its head: “The old model was that you gave advice for free and charged fees for services. Now it’s the other way around: the services are virtually free, but you need to persuade clients to pay for the advice!”