Top tips for appointing new associate firms

If, like me, you attended the International Trademark Association’s annual meeting in San Diego earlier this month, you were one of a record breaking 9,900 attendees, the majority of whom were there to build on existing relationships and attract new customers.

The event, which was the 137th annual meeting, is all about visibility and networking.

Added to the incredible attendee list was a sharp increase in the number of parties and receptions held. The Global Legal Post reported that the number of parties hosted by law firms increased by 64% compared to 2014 and was also higher than the number held in 2013.

The parties are fertile ground for catching up with old friends over a few much needed drinks after a long day of meetings, and connecting with potential customers and new foreign associates. It’s good to connect in an informal environment.

Whatever the intellectual property networking event, a new foreign associate firm may well be a good fit for your organisation, but have you taken a step back to fully understand your overall needs and assessed the performance of the incumbent firm before taking the plunge and appointing a new associate?

“Adopting a practical project management approach to review your global network will result in a consolidated and simplified preferred group."

Unless you are unhappy with the service from your current associate firm it is less disruptive to retain and improve existing relationships. But, a comparison exercise with its competitors every two years is good business practice, delivering a managed and consolidated preferred network.

Here are five questions to consider that will help support positive and long-term global relationships:

1. What are your business needs?

The associate firm must understand and deliver to your business, compliance and data protection needs, and be aligned with the overall business strategy. This requires effort and communication on both sides. Reviewing the biographies, capability and skills of the law firm and its people is a useful first step.

2. Is the foreign associate firm a good match?

If you are a boutique law firm delivering to a niche market, a similar sized boutique firm in your target territory that matches your customer value proposition could be a good fit. Maybe you require the services of a law firm with a large infrastructure, or likely it’s something in between. It will not be a one size fits all approach and appointing a law firm with similar business philosophies supports alignment.

3. Are its professional and official fees competitive?

The cheapest fee should not be the focus; however, the ability of the law firm to deliver cost reductions through technology solutions and efficient internal processes, resulting in the right level of service delivery, is a key consideration and increasingly a top requirement for general counsels and chief intellectual property officers.

Yes, official fees are fixed; however, most companies do not pay in the foreign associate’s local currency, leading to official fees generally being converted from local currency into Euros, pound sterling or US dollars.

The exchange rates used when converting from local currency to client invoicing currency can over-inflate the end price and are often overlooked when undertaking a competitive review. The composition of all the fee elements collectively will provide a complete picture, enabling you to make an informed decision.

4. Are the fees fixed?

Agreeing on the complete fee structure and being clear on expectations from the start will avoid long and time consuming complaints as the relationship develops. The widely reported decline in hourly billing structures is due to a demand for budget clarity. Alternate fee arrangements leading to true lower fees can be achieved by close cooperation and agreement.

If the top line fee appears competitive yet additional charges are added for miscellaneous costs, this can reduce your competitiveness or, worse, lead to loss of margin through absorbed, unexpected charges that cannot be passed on. One US firm was able to reduce its tail spend by $175,000 by eliminating additional charges from its legal network.

5. Are they responsive?

Communication with law firms is central. Responsiveness to instructions, queries and urgent requests directly correlates to your customers’ levels of satisfaction so the importance of this cannot be under-estimated. Your foreign associates should be seeking feedback from you on satisfaction levels and where they can improve, leading to a true partnership.

All this can be agreed through the implementation of simple yet effective service level agreements.

In conclusion, adopting a practical project management approach to review your global network will result in a consolidated and simplified preferred group. It entrenches long-term relationships, improved customer service and reduced costs.

With the continued use of competitive bidding and request for proposals, isn’t it time you reviewed the composition of your global network?

Christine Jennings is the founder and managing director of  IP Preferential. She can be contacted at: cjennings@ippreferential.com