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When client-adviser relationships go sour ...



Kingsley Egbuonu, London


The second part of our IP STARS research, based on a survey of 1,200 in-house practitioners, looks at what causes relationships to go wrong

What do the following have in common? (a) missing deadlines; (b) unethical business practice or activities; (c) failing to deliver services on terms agreed; (d) little or no transparency in billing and costs; and (e) failing to manage costs. The answer is that these were identified as the main reasons for a breakdown in a relationship with an outside adviser by the 1,200 in-house practitioners surveyed in IP STARS annual research.

Normally clients are the ultimate decision makers on the steps taken by their external IP adviser or agent. Those doing filing and prosecution work may well be reassured that only 33% of respondents strongly agreed that obtaining an IP right with little value can affect the relationship. But litigators should seriously consider alternative dispute settlement options such as mediation and negotiation, as 55% strongly agree this can affect a relationship.

IP Stars chart 2On the flip side, the majority disagree that lack of social interaction with in-house counsel (23%) and cultural differences (20%) affect a client relationship. Most firms socialise and interact with their clients in different ways to nurture relationships, and will surely continue to do so, but should note that only 19% strongly agreed that this helps and 59% are neutral.

To complement this question we asked in-house counsel to tell us what would make them terminate the services of an external IP adviser or agent (see box). Again, issues around costs and billing feature heavily in the comments, so were conflict of interest, insufficient communication and loss of key contacts or partners.

In a competitive market, and one where clients are demanding more for their money, external advisers must continue to demonstrate exceptional client care to minimise the risk of client relationship breakdown, deliver results at reasonable costs and add value in order to differentiate themselves. All of this culminates in a positive, demonstrable reputation which can be used to win new work.

Ending relationship – the comments

•    "Abusive billing practices or subject matter incompetency."

•    "Excessive delays in communicating. Overcharging fees or repeated errors in billing."

•    "Ethically slippery."

•    "[Not respecting] matters addressed in our business Code of Conduct that we expect of ourselves and our business partners."

•    "If because of their advice the situation ends up being more expensive than settlement in the very beginning."

•    "Poor conflicts protocol."

•    "Failing to give feedback and information on the progress of work."

•    "Loss of key contact or significant change in team."

•    "No longer adding value."

•    "Failure to take responsibility for and proactively communicate a mistake."

•    "Not listening or respecting our needs."

•    "Disappointing results."

•    "Forwarding cases to another person in the firm without informing client."

•    "Lack of cooperation and help with options to manage costs, for example insisting on sending hard copies of correspondence at extra expense when we have asked only to receive emails."

Billing – the comments

•    "Fixed monthly fee for standard work is great" (General counsel in an entertainment company in Australia)

•    "I do like fixed rates for pre-litigation tasks such as cease and desist letters" (Attorney in a food industry company based in the US)

•    "Fixed fee for routine work and hourly fee for tricky issues including complex applications and prosecution" (Head of IP in an automotive industry company based in France)

•    "Hourly billing is more clear to see the time spent on each topic" (CEO of a technology company based in Sweden)

•    "Hourly billing subject to prior estimates and regular updates" (General counsel in a financial service industry company based in the US)

•    "Where fixed fee is not available, we prefer cost transparency by quote and cost reporting" (Senior legal counsel in a technology company based in Australia)

•    "Will love to work with a firm who are flexible on capped fee arrangement or other models like contingency fee" (Vice president of IP in a pharmaceutical company based in India)

•    "With respect to filing applications and dealing with intermediate work during examination, a fixed-fee system is desirable. With respect to lawsuits and proposal for countermeasures against illegal copies, a fixed-fee system is also desirable, but hourly billing is acceptable depending on circumstances" (IP manager in an engineering company based in Japan)

What in-house counsel want

Also read the  first part of this article which revealed what in-house counsel care about the most when selecting external IP advisers or agents.


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