Review of the UK Private Practice Intellectual Property Sector, August 2010.
By Pete Fellows, Director, Fellows and Associates
As a recruiter, I am often asked by my clients for a perspective on the current trends in the IP sector. I have certainly spotted a few interesting developments of late so thought it might be worth committing to (virtual) paper. Below are ten hypotheses on current and future market conditions. All is simply my opinion but I do feel I have an insight that offers a different and complementary perspective to other commentators. This article is concerned largely with the UK private practice market.
1) Things Are Getting Better
If the amount of work that a recruitment company has could be considered an indicator of market conditions then there is cause for positivity. We are currently extremely busy and are aware that more firms are now recruiting again (mostly and ideally via Fellows and Associates but we have also heard of new roles with the less enlightened amongst the profession). The firms now recruiting include some that made redundancies or cut back recruitment budgets last year. Competition for candidates is going to get more intense which could push up salaries in the coming year.
2) An Economic Downturn With Inconsistent Consequences
The impact of the economic downturn on the UK IP sector was rather curious. For most of 2009 and some of 2010 the patent and trade mark firms were split into broadly three camps:
A) Suffered badly, made redundancies, lost work that could not be replaced.
B) Suffered a little bit, cut back on new hiring but did not reduce the workforce at all.
C) Recession. What recession? A few of our clients actually continued to grow throughout 2009 and 2010 perhaps based on a foundation of strong entrepreneurial principles and a good direct client base.
This could have an impact on recruitment in 2011 with firms that are perceived to have managed the recession well enjoying employer brand benefits when attracting new hires.
3) Attorneys Are Now More Willing To Move
My feeling is that a number of the attorneys one might want to hire have been sticking with the devil they know. Now that there is more security in the market attorneys are more willing to take a chance and move positions. What remains very difficult however is persuading attorneys to move job AND location. Recruiting for offices outside London remains extremely difficult. Therefore, if you are considering a move many of the best and most lucrative opportunities are not where one might think and if you are prepared to move to other regions of the UK one can potentially achieve better employment circumstances (i.e. higher remuneration, partnership prospects, etc.).
4) Firms Are More Willing To Recruit
We are nowhere near the heady days of 2007 but firms are more willing to take a chance on a new hire. In 2009 many firms would only recruit if there was an undeniable and unavoidable prerogative. In the second half of 2010, it appears that whilst there are still commercial hoops to jump through to justify recruitment, more firms are willing to staff ahead of their requirements or take a chance on someone with potential. For jobseekers, I would remain hesitant of a blanket approach to applications either directly or via a recruiter – this rarely works and can give a wrong impression – but there may now be some merit in informed, targeted speculative applications.
5) An Increase In Mixed Partnerships And The Rise Of The IP Boutique Law Firm
There have been some recent and well publicised failures but a prosecution department is still a desirable commodity for a number of law firms. We know of law firms both increasing or establishing trade mark prosecution departments as well as some flirting with patent attorneys. The other interesting trend is firms of patent attorneys considering a broader offering by hiring solicitors. There are, of course, patent and trademark firms that have benefitted from an associated successful legal practice for a number of years but we expect more firms to consider this strategy as there will be little value on reciprocity if many law firms are competing for the same prosecution business.
The emergence of the one stop shop IP service provider might be a significant trend over the next few years particularly if both law firms and patent and trade mark firms can find a way to accommodate new Partners of an alien discipline in a way that is commercially viable and attractive to new recruits.
6) Salaries Will Increase In 2011
Salaries in 2010 are broadly at the same level as they were in 2008. But with what appears to be a change in economic circumstance and certainly much more competition now for good candidates, my prediction is that they will rise quite quickly in 2011. There has already been some evidence of this from offers we have received for candidates over the last few months.
7) It Is Increasingly Imperative To Consider Longer Term Prospects For Existing Staff
The unpreparedness for economic realities of some practices has exposed the frailties of their Partners in making sound commercial decisions. A need for new blood with entrepreneurial know how has become a massively in demand commodity. However, the issue with attorneys that think commercially is that they understand their value in the market. Firms without a well considered progression plan could lose vitally important Associates and Salaried/Fixed Share Equity Partners at a time when retaining them could be key to survival. There are numerous fantastic opportunities for attorneys with commercial acumen and even more for those with a client following (irrespective of restrictive covenants) and hence hanging on to them will become increasingly difficult if a regime’s career ladder is not well structured.
8) Recruiting Part Qualified Attorneys Is Going To Get More Difficult
My impression is that graduate intake suffered in 2008, 2009 and 2010. If far less people entered the profession than has normally been the case then recruiting a good part qualified attorney; and in a few years time, newly qualified attorney, will be extremely difficult. Firms may have to compromise on experience levels by recruiting more graduates or cost by recruiting more qualified attorneys. One potential benefit of market conditions is that the range of choice and quality of graduates is better than ever before. It’s outside our usual remit but we recently ran a graduate recruitment project for a client (perhaps because they were concerned about being overwhelmed by response) and were astonished by the extremely high quality of response. A 1st class degree and a PhD became the minimum criteria for selection.
9) Expect Shortages In Biotechnology Especially
There have been very few jobs in the biotechnology space over the last year or two and as a result many candidates have stayed in their current positions rather than risk a move. This nervousness has meant that for recruiting firms it is extremely difficult to find biotechnology candidates and yet for attorneys as not many are moving, new opportunities are scarce. There have also been very few entirely new roles created (rather than recruit to replace) because of the difficulties in the biotechnology sector as a whole which has further exacerbated the stasis. There are then few jobs but also very few candidates to fill them. Success for hiring firms might come by making a splash via a marketing campaign rather than relying on usual candidate supply channels. Attorneys looking for a new role should be patient and consider each position on its own merits as it is less likely that one will be able to compare and contrast a range of concurrent, suitable options.
10) New Firms Abound
2010 has been the year for flying solo with an amazing array of new firms entering the market. Yorkshire in particular has been a hotbed for this kind of activity but there are examples across the UK. I also expect that given the successes and failures amongst the established firms in 2009/10 to see perhaps one or two acquisitions/mergers in the coming year. Opportunities abound for firms wishing to expand their reach by a sound acquisition strategy.
Comments, queries, rebuttals can be sent to [email protected].
Pete Fellows is the Managing Director of Fellows and Associates. Fellows and Associates are a recruitment and management consultancy specialising in the recruitment of patent attorneys, trade mark attorneys and IP lawyers. We also introduce firms to merger opportunities and can help develop a small firm acquisition strategy.
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