Review of the UK Private Practice Intellectual Property
Sector, February/March 2011.
By Pete Fellows, Director, Fellows and Associates
It has been six months since my last review of the UK
intellectual property market (click here for that). Whilst most of the predictions from August
2010 still hold true there are some trends that I thought I should pay
attention to in this update. Even more
so last year, I believe that career progression (or lack thereof) will be a key
factor in driving recruitment in 2011 and 2012.
How firms and companies address this issue, will be a defining component
in staffing the IP sector.
1) Things Continue To Improve
Growth was steady in the latter part of 2010 but
surprisingly reached its zenith on the run up to Christmas. It was one of the busiest Decembers I have
had in recent memory and this activity has carried through into this year.
There are a number of firms that were very lean last year as
a result of slowing down recruitment; now that their work load has increased,
new requirements for staff have gathered pace.
The movement in the market has fuelled more vacancies as Attorneys leave
one firm for another, creating a gap.
However, it is still not easy to persuade Attorneys to move jobs as the
recession and its impact are still in the collective consciousness of potential
candidates. I expect these fears to ease
in 2011 – as Attorneys see their peers moving roles successfully, it will
hopefully encourage them to follow suit.
2) Newly Or Recently Qualified Patent Attorneys Have
Numerous Options
A consequence of what appears to be an increase in work and
too few fee-earners for many firms, is that training entry-level or part
qualified attorneys can be an issue.
Therefore, the most productive attorney to hire at the moment, in the
opinion of many practices, is someone who is newly qualified. This is because the requirement to train is
minimal and firms do not have to worry about career progression to partnership
for quite some time. A newly qualified
attorney can get on with the work more or less from day one, thus solving the
issue of too much work for too few people.
There are of course other ways of solving this problem, for example,
candidates with any number of years of post-qualified experience, who do not
aspire to partnership. However the
political impact of bringing in an expensive fee-earner to a role not
necessarily clearly defined (because it is a simple reaction to better market
conditions) needs to be very carefully managed.
The fear of getting this wrong can be a deterrent to proceeding in this
manner.
Some firms simply like the idea of having career orientated
newly qualified attorneys without necessarily being able to offer the career
options likely to attract them. However,
practices with an approach more in tune with the desires of applicants might
just succeed in filling their requirements and hence being more competitive
ahead of their rivals.
3) Career Progression Opportunities Will Drive The Market
The economy is expected to grow in 2011 and hence attorneys
will begin to feel that moving jobs is a less risky proposition than it was for
most of last year. There is real potential
for snapping up some of these risk-embracing attorneys for the more
meritocratic amongst the private practices.
There is some chatter amongst Fellows and Associates’ sources about a
number of firms that, at the moment, can offer limited or no prospect of career
progression beyond Associate. For the
firms that can, there is undoubted opportunity.
Attorneys might be willing to consider a pay cut for a better long term
future and it is not inconceivable that if you successfully hire one fee-earner
from a competitor it may lead to other recruits from the same source,
particularly if you can more obviously deliver on career aspirations. For the firms that can offer very little,
beware the headhunters. Sorry.
4) Salaries Will Increase In 2011
A lack of career progression opportunities for attorneys in
some practices could mean that the only option for staff retention is to pay
people off. This will result in a more
rapid increase in salaries offered which will be compounded when firms with both
a less competitive pay structure and a lack of a career progression plan start
to lose people en masse, further driving salary inflation.
For at least the last 18 months, salaries have been fairly
stagnant, but there has been recent increased demand in electronics and to a
lesser extent, biotechnology as firms’ workloads have started to pick up. This
demand has already begun to inflate salaries in these areas and I expect this
to continue throughout 2011.
5) It Is Becoming A Candidate Driven Market (For
Electronics/Biotechnology)
We have a huge volume of requirements in the former and have
noticed an increase in requirements in the latter. There has been some salary inflation in
electronics already and the demand for newly/recently qualified candidates is
particularly fierce. For the first time
in quite a long time I expect that firms may recruit ahead of their
requirements and take the chance that new work will materialise. In electronics in particular, the power
balance is with the candidate and good attorneys should be able to obtain
interviews with a number of firms when considering a move. From a corporate perspective, I expect
electronics to buck the trend in terms of in-house work such that there may be
an increase in the number of opportunities available this year.
6) Getting The Recruitment Process Right Will Be Very
Important
A poor recruitment climate has meant that firms and
companies have been less than exemplary in their treatment of applicants. Waiting a long time between interviews,
pushing for lower salary demands, numerous meetings/hoops to jump through
before selection and various other less than ideal processes (from a candidate
perspective) have all been relatively abundant.
In 2011, firms may have to be more attentive, and certainly more
organised, in order not to lose excellent candidates to their competitors. As the market becomes candidate driven once
again, firms are more likely to lose choice candidates through simply not making
a decision quickly enough. Perhaps more
importantly, poor peer perception, as more people attend interviews during
2011, will make it much more difficult for these firms to recruit in the future
if the candidate experience is poor.
Managing expectations and giving good feedback to candidates and their
recruitment consultants will be very important.
Naturally, recruiters will evangelise more readily about firms they have
a good experience with as suppliers and this can have a positive impact on a
firm’s brand from a resourcing perspective.
A closer working relationship with recruiters in a candidate driven
market can ensure that they sell your firm effectively and understand why you
offer an attractive work environment.
7) ‘With Following’ – A More In Demand Request, But Is It
Achievable?
For quite a few private practices, 2011 may be a year for
expansion, perhaps to grow to where they were before the recession or, learning
from their mistakes; diversifying their business model for greater financial
security. As a consequence, I expect an
increase in firms requesting client following to facilitate a hire. Quick expansion is paramount but some firms
do not necessarily have the work to justify numerous new recruits. The problem with this strategy is that in a
number of instances these firms are not prepared to offer the partnership
position that someone with a client following would likely be attracted
to. In addition, firms may have to
navigate politics amongst a potentially disgruntled work force in order to
incorporate someone at a senior level.
It might be difficult to justify to existing staff the benefits of
recruiting someone who is taking ‘one of their partnership positions’. What constitutes a client following also
needs to be clearly defined. There is
merit, for example, in hiring a well-connected attorney who cannot guarantee
work but should, through their contacts, be likely to deliver it. A remuneration package predicated on new work
brought to a firm over an attorney’s first few years may be a novel way of
managing the risk of a high initial financial outlay. This may ultimately prove more successful
than trying to incorporate the clients of a new hire into a potentially new
business model and different charging structure.
8) Expect Some Market Consolidation
In the last two years some practices have been less
successful than in the preceding period and are at risk of losing attorneys
more quickly than a sinking ship finds itself short of rats. Profits are down and equity partners are
reluctant to relinquish their earning potential by increasing their number at
the expense of losing associates. The
remedy might be acquisition or merger.
Mergers are certainly afoot; we have heard rumours of a few. I would expect that there will be some
similarities to the accountancy profession 15-20 years ago with a number of
firms consolidating to form a number of larger practices whilst at the same
time there will be a number of new sole practitioner/small practices launched
by attorneys frustrated by their current firms or are themselves casualties of
an acquisition strategy they do not agree with.
9) The Death Of A Career In-House
Well not quite. But
there have been some well publicised announcements over the last year affecting
the life of the in house Patent or Trade Mark Attorney. There are fewer options and hence getting a
job in house can be much more difficult as there will be much more competition
for places amongst candidates. If you
are lucky enough to achieve a position in house then you really need to
consider your longer term career. In my opinion,
unless you are prepared for a career that is international and will at some
point require you to relocate, perhaps more than once, the long term future is
limited. As with private practice,
positions for part qualified attorneys will be increasingly tough to find
in-house due to the issues of finding qualified staff with time to conduct the
training. Possibly defying this trend
may be electronics; I do not think jobs will be abundant but there may be an
increase in opportunities in-house in comparison with 2010 for attorneys with
this technical background.
10) More Law Firms Will Try Patent Prosecution And There
Will Be More Failures
In 2010 there have been more casualties in the greater legal
market’s experimentation with patent prosecution departments. As yet, I’m not convinced that anyone has got
this exactly right and there are still considerable issues in terms of the way
that patent attorneys are seen by solicitors within a law firm. There are advantages for the Patent Attorney
in joining a law firm, particularly in relation to the broader base of skills
one might be able to retain and the often high levels of remuneration. However, billing targets tend to be more
challenging and there can be issues in relation to how Patent Attorneys are
perceived by their peers in other departments.
Although it’s now legally possible, I still have my doubts as to the
feasibility of Patent Attorneys becoming fully fledged Partners within law
firms. What is potentially more
interesting is solicitors joining firms of Patent and Trade Mark Attorneys –
how that might change the IP market in the UK over the next few years could
have a big or an entirely insignificant impact (or somewhere in between), only
time will tell. Yes it is comfortable on
my fence, thank you.
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. Our Management Consultancy
division helps firms develop a business strategy (such as managing financial
performance), introduce firms to merger opportunities and help develop a small
firm acquisition strategy.
Comments, queries and rebuttals can be sent to
[email protected].
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