17 May 2018
Should you engage a BigLaw or boutique intellectual property (IP) firm to help you with patent prosecution? Many businesses base their decision on cost, according to Law360:
- When choosing outside legal counsel, 41 percent prioritize cost-effectiveness.
- Of those dissatisfied with their legal counsel, 48 percent cite cost of services rendered as the reason why.
But while important, cost isn’t the only key factor at play. Different law firms have different operating models — and your priority should be to hire the team that best fits your needs.
If you’ve researched your options, you already know there are lots of different types of firms that offer patent drafting and prosecution services. Firms vary in size, focus, experience, location, etc.
People often ask me about the difference between hiring a big firm (a so-called “BigLaw” firm with hundreds of lawyers) versus hiring a small firm (called a “boutique” firm, which is usually a small team of lawyers), because I’ve worked at both types of firms.
So let’s take an in-depth look at the factors you should consider when hiring outside counsel for patent prosecution work. (To keep things focused, we won’t be diving into other areas of IP, such as litigation.)
BIGLAW VS. BOUTIQUE IP FIRMS: 9 FACTORS TO CONSIDER BEFORE HIRING
Painting with a broad brush, we’ve put together a list of key differences between BigLaw and boutique IP firms. Of course every firm is different, and you’ll find many exceptions to every generalization.
And of course I’m biased because I run a boutique firm, but the list of factors below is based on well-documented trends in the legal industry — and supplemented by our team’s observations over many years of industry experience.
BigLaw IP groups hold general expertise across a range of IP matters and often other non-IP areas of law. They’re a one-stop shop for anything IP-related: On top of patent prosecution, they’ll also handle trade secret disputes, licensing, copyrights, trademarks, as well as litigation of IP and non-IP matters.
Boutique IP firms typically specialize in a more focused niche area of law, and sometimes serve only a specific client profile. For example, my firm (Henry Patent Law Firm) handles only patent prosecution and IP agreements for tech companies.
2. COST: BILLABLE RATES
Generally speaking, boutique IP firms have lower billable rates than BigLaw IP firms. And the pricing disparity is only getting bigger: According to Law360, overall rates at BigLaw firms have recently surged 7.5 percent, while small firms have increased their rates by just 2.3 percent.
With lower billable rates at a boutique firm, you’ll obviously enjoy cost savings — and your attorney will also be able to add significantly more value for a reasonable price.
However, BigLaw firms typically offer discounts to high-volume clients. So if you’re looking to spend millions per year, you might be able to get competitive pricing from a BigLaw firm.
3. COST: FLEXIBILITY
In a lot of ways, law firms are just like any other business. Like a big corporation, BigLaw firms tend to have less flexibility in their cost and billing structure because, among other things, exceptions and special deals require administrative processes and layers of approval.
BigLaw firms will be flexible when they have to for their important clients — for example, by offering volume-based discounts to big clients. But if you’re not a big client, you probably don’t have the leverage to get a discount, or any other special deal for that matter.
By contrast, boutique firms are nimbler and more motivated to accommodate the types of clients that wouldn’t get a discount from BigLaw. Boutique firms often have more flexibility to introduce innovative fee structures tailored to their clients’ needs.
4. INVOLVEMENT OF SENIOR ATTORNEYS
Your patent application will be stronger if it’s drafted by someone with considerable experiencein your field.
But the stereotypical BigLaw firms will typically assign the bulk of your case to junior team members, and have the senior attorney sign off on the end product. As a result, you could be paying premium rates for work produced by an inexperienced team member.
Conversely, at boutique firms, the senior attorneys will be more involved in the process of writing your patent applications. Many boutique firms have smaller teams of experienced professionals that personally handle each patent application.
5. ATTORNEY ASSIGNMENTS
BigLaw firms typically have a deep bench of professionals and a seemingly infinite capacity for new work, which means they’re always available to do a project on short notice.
But beware: When you engage a BigLaw firm to prepare a new patent application, there’s a chance it’ll be randomly assigned to the next available attorney. If it’s a busy time, that attorney might not be the best person to handle your case. And you might not even know who’s actually drafting your patent application.
Boutique firms typically don’t have an inventory of lawyers ready to pick up projects on a moment’s notice. On one hand, smaller firms can’t always handle huge projects as quickly as BigLaw because they tend to have a measured work capacity.
On the other hand, with a boutique firm, you always know who’s drafting your patent applications — and you can be sure that your work is assigned to a person who’s a good fit.
6. MANPOWER TO SCALE WITH YOUR BUSINESS
If you’re a fast-growing startup, it may make sense to hire a firm that can scale their services as your business matures. BigLaw firms are more likely to have the infrastructure to accommodate new and increasingly complex requests.
And if you’re pursuing international patent protection, some BigLaw firms will even have offices in other countries, allowing you to retain the same firm when “nationalizing” your applications.
Still, keep in mind that you may have different experiences working with different teams within the same firm.
7. RESEARCH NETWORKS
BigLaw firms are commonly perceived to have stronger research capabilities because they can tap into their extensive internal networks for specialized knowledge.
But today, tech-savvy lawyers don’t need the resources of a BigLaw firm to conduct thorough research. Many boutiques have established a robust information infrastructure by investing in legal software, cloud-based solutions, and even outsourcing companies.
And there’s often very little legal research required for patent prosecution, so this shouldn’t be a significant factor if that’s what you’re hiring for.
8. CLIENT RELATIONSHIPS
Because BigLaw teams have large caseloads, it can be difficult for the attorneys to spend time developing a relationship with each client. According to a report by LexisNexis, 40 percent of those surveyed felt that senior partners only understood their business at a superficial level.
In addition, the team working on your case may change over time thanks to associate churn — and high turnover negatively impacts efficiency.
By contrast, the teams at boutique firms often collaborate closely to share knowledge. And because fewer people are handling each case, you’ll have more opportunities to interact with every team member.
9. CLIENT SERVICE
If you’re a startup working with a BigLaw team, it’s highly unlikely that the work you’re providing is a major source of income for the firm. As such, you might not receive the same level of attention as a significant client.
Conversely, you don’t have to be the biggest client at a boutique to receive personalized service.
HOW BIG IS YOUR BUSINESS?
Generally speaking, BigLaw and boutique IP firms are better suited to serve businesses of different sizes.
If you’re IBM, you probably need the resources of at least one BigLaw firm at your disposal: You’ll be a major client, which means you can use high-volume work as leverage in negotiating price discounts. You’ll also be well-positioned to fully exploit their internal network.
But if you’re a small or medium-sized business, a smaller firm can typically handle your needs more efficiently. And you’ll be a more significant client to them — meaning that you’ll get more personalized service from the senior team members, and you’ll also enjoy the firm’s best rates.
PRIORITIZE HIRING THE RIGHT TEAM — NOT THE FIRM
In a past life, while working for a BigLaw IP firm, I received calls from many smaller companies looking for help with patent prosecution. I’d typically suggest that they find a smaller firm to serve them if possible.
But sometimes, they would still hire me because they couldn’t find another attorney who had the right technical expertise or who shared their strategic vision for developing their patent portfolio, etc. And the relationship worked very well — even though I was working at a BigLaw firm.
Ultimately, you’re really hiring a team from a firm (whether BigLaw or boutique) to work on your case. So prioritize hiring a team that values you as a client and can adequately serve your needs.
WHY HIRE HENRY PATENT LAW FIRM?
I started Henry Patent Law Firm because I wanted to serve tech startups and other exciting tech companies and knew that BigLaw was not the optimal place to do that.
At Henry Patent Law Firm, our attorneys combine BigLaw experience with a boutique approach, and we’re passionate about helping growing tech companies take their business to the next level. If you think we could be a good fit for your needs, we’d love to hear from you!
Michael K. Henry, Ph.D.
Michael K. Henry, Ph.D., is a principal and the firm’s founding member. He specializes in creating comprehensive, growth-oriented IP strategies for early-stage tech companies.