IP litigation work for law firms has been lagging this year not just because companies have a decreased appetite for big-ticket lawsuits in general and because they are increasingly turning to less expensive third-party providers for discovery review and other tasks, but also because companies are taking more patent disputes to the Patent Trial and Appeal Board, according to Kent Zimmermann, a law firm management consultant at Zeughauser Group.
"The IP market is uneven at best, and it's a little soft, according to many firms, including for the sought-after higher-rate IP litigation," he
Firms may be tempted to provide services in all areas of IP law, but many firms will be more competitive if they make tough decisions now about what type of IP work they want to be known for and then prioritize their time and money to double-down in those chosen areas, according to Zimmermann
"Clients do not find it credible when a firm positions itself as the best at everything," he
Better performing firms tend to prioritize investment in higher-rate geographies and areas of practice, including investing as much as possible in matters where results are more important than price, according to Zimmermann
"IP is a tale of two cities," he
"You've got some work, often prosecution, that can be rate pressured and perceived in many cases as commoditizing by a lot of clients, and then you have other work, notably high-stakes patent litigation, that is widely perceived as highly sought-after and sometimes determinative of a company's success."
Firms that are busy have generally invested in developing a reputation for being the best or among the best at high-stakes patent litigation, such as Ropes & Gray LLP
, Orrick Herrington & Sutcliffe LLP
, Kirkland & Ellis LLP
, WilmerHale and Sidley Austin LLP
, according to Zimmermann
"The key is how you define your market, which can be defined broadly to mean an industry section, geography, practice area or some combination," he
"Once firms choose how to define their market, then they need to build the breadth and depth to be preeminent in those practice areas, industries and/or geographies."
When firms pinpoint the areas of expertise they plan to offer, they should keep all options on the table to achieve their objectives, including growing by laterals, groups and combinations with other firms, if doing so helps them reach their strategic vision for the future, according to Zimmermann
It also may require counseling out chronically underproductive lawyers and shedding chronically underperforming offices and practices.
"There are firms with too many attorneys and not enough work that are going to have to right-size to get stronger," he
"Firms need very strong talent," Zimmermann