What reaction should Patent Attorneys have to the Coronavirus UK Job Retention Scheme?
Covid-19 and the Intellectual Property Sector 30th March 2020. The Job Retention Scheme.
I have had a question from an anonymous patent attorney who submitted it via our website. She/he didn't leave a contact address so I have decided to reply publicly here to discuss what I have seen as the early reactions to Covid-19 in the UK intellectual property sector. I'm conscious that I don't want to reveal any confidences so I will speak as generally as I can but specifically where possible. Now on to the question:
Hi Pete. Please excuse the anonymous message.
I was wondering whether you were planning an article on the Coronavirus Job Retention Scheme in relation to patent attorneys?
I'm sure more of us than care to admit have it somewhere on our minds if we head for a significant downturn. In particular, do you think an off-the-record chat with, say, a friendly partner indicating that we would be prepared to volunteer if needed would be sensible or damaging? Too soon? Or helpful for both employee and employer?
My own (fortunate) situation is that the replacement income would comfortably cover outgoings and further career progress is not an aim, and so I don't have those concerns but I suspect others may. There has been no suggestion that it's an issue at the firm, but would not expect it to be brought up at this stage.
First of all to address the questioner directly, I don't think there is anything in your question that could not be used this way as the basis for an article, particularly in respect to revealing your identity but I am sorry if I have overstepped (I couldn't ask your permission). This article is focused on UK firms of patent and trade mark attorneys but I'm sure there are parallels with the legal sector more broadly.
For clarity for those of you reading this from outside of the UK the scheme referred to allows employers to 'furlough' employees for period of time (currently 3 months but this could be extended). This means that the employees who may otherwise have lost their jobs will not work and will receive 80% of their monthly salary (to a maximum of £2500) which will be reimbursed to their employers by the UK government. The employers can make up the shortfall in salary if they wish by paying the missing 20% or not. The advantage of the scheme for an employer is that it keeps good employees on the payroll ready for action when the Covid-19 situation abates but saves what could be onerous payroll costs in the meantime. This is particularly applicable to the hospitality sector but the scheme is widely available irrespective of sector. The disadvantage is that an employee can not work whilst furloughed so there is a balance between the benefit of reducing costs versus money lost that an employee might have generated whilst normally employed.
So far I’m not aware of any patent attorneys being furloughed and definitely not aware of any redundancies. I am aware of cutbacks such as reducing budgets (such as marketing, bonuses and pay rises) and freezing all recruitment etc. but nothing more than that. I think firms are conscious of messaging from a public relations perspective and I would not be surprised at all if any planned staff cutbacks prior to the crisis have now been put on hold because of the message it would send and the difficulty it could put employees into if they lost their jobs.
The uncertainty is problematic. At present we really don’t know how long governmental measures are going to last which makes planning difficult but the IP sector proved very resilient through the 2008 financial crash. Focusing too much on the potential negatives might cause a bit of unnecessary panic when the evidence at least for now is that most patent attorney firms are okay(ish). Many firms have been under resourced for a while, particularly in electronics/engineering so I believe that if work reduces that might well ease the burden on needing additional people but hopefully won’t go as far as redundancies being necessary.
I think there’s an opportunity for firms to be perceived as a bit of a ‘safe haven’ the various ways firms react to the crisis will be well remembered and firms that could, for example, grow their team during the crisis or immediately after could be a in position to take advantage. There were a few firms that came out of the ’08 crisis strong and their significant success since has in part being fuelled by recruiting good people earlier than anyone else.
The profession at present seems to be collectively holding its breath. So, to answer the questioner directly, I think it may well be too early to ask a Partner about the possibility of being furloughed. I am sure that all options have been discussed at a senior level at most firms, so if necessary it will be offered. But perception is certainly key, I doubt a firm would wish to be perceived as the only one that had furloughed its staff, so how the wider messaging was managed would be crucial.
There will be a significant impact on the IP sector more broadly though. As firms cutback in some areas service providers could very well be effected. For some, this might mean a significant uptake in work (software providers perhaps, setting up attorneys for home working within IP software systems) and for others quite the opposite.
There may be a lot less recruiters to speak to when all this is over. I think some IP recruiters will be very vulnerable, if all revenue dries up. At Fellows and Associates we're small and agile which helps a great deal and we have clients that operate outside the UK and who are still actively recruiting which gives us financial avenues not available to others. Recruiters can add value to firms even through this crisis though, from marketing to speaking to existing employees to put their minds at rest. We might have to figure out an unconventional fee structure but I'm sure it's possible. And, if current circumstances continue there will come a point when particular recruitment requirements can no longer be put on hold. If firms can time this well they may have the run of the market in terms of attracting the best talent when everyone else is still holding back.
If you have a question you would like me to address, drop me a line anonymously or otherwise. Likewise if you spot an interesting news article then let me know.