AIPF: How boutiques rode out the pandemic

When the COVID-19 pandemic engulfed the world in March 2020, boutique IP firms joined every other type of organisation around the world in scrambling to contend with unprecedented change.

As did the leaders at virtually every other firm, leaders of IP boutiques, overnight, had to start asking questions such as: “how do we protect our employees’ health and safety while ensuring continuity of service to our clients?”, and “even if we can operate our businesses fully remotely, will our clients keep enough work with us so that we can maintain our entire workforce?”.

Over the months that followed, IP boutiques worldwide proved that they were among the most well-positioned organisations to thrive in the lockdown economy. In fact, many IP boutiques have been able to mirror the good fortune of their high-tech clients and emerge from the first year of the pandemic stronger than they were at the outset.

Coincidentally, in the first week of March 2020, the Association of IP Firms (AIPF) held a long-planned webinar titled “Law Firms and the Day You Hope Will Never Come: Preparing for Disaster”. In the webinar, AIPF’s members learned about IT connectivity continuity, leadership succession planning, and firm crisis management, among other things.

Additional webinars and roundtables on topics such as “Responding to the Challenges of Covid-19”, “Managing Virtual Teams”, and “Pricing of Legal Services during Crises” were also held by member firms. While this programming helped IP boutiques learn from each other and prepare for change, the reality is that most IP boutiques were inherently better-positioned than typical general practice firms to weather the challenges unique to this pandemic.

A firm model ready for the way ahead

IP boutiques have been leading the charge in remote working for well over two decades. While big law firms and many traditional industries had continued to favour “face time” and formal office culture, many IP boutiques around the world had already followed the lead of their Silicon Valley-based and other high-tech clients in embracing remote working and virtual offices.

Since the early 2000s, the US Patent and Trademark Office (USPTO), European Patent Office, and others had fully implemented, and indeed encouraged, electronic business using electronic file wrappers, such as the USPTO’s PAIR system. In response, most boutique IP firms similarly migrated to fully electronic paperless workflows that eschewed not just paper, but also the attendant physical infrastructure, including file rooms of shelving and on-site paralegals.

As an example, one of AIPF’s member firms presented to the association years ago on the topic of “digital disruption” and how to operate fully virtually, years before most of us had ever heard of social distancing.

In addition, many IP boutiques have international networks of “foreign counsels” that afford them some visibility into global events and best practices from around the world. Throughout the pandemic, AIPF’s board members and committee members, many of whom hold leadership roles in their firms, have regularly dialled in from all over the world via videoconference to share about their respective countries’ and firms’ responses to the pandemic.

During those meetings, most leaders of IP boutiques reported unique country-level challenges, but at the firm-level, found that IP boutiques around the world shared remarkably similar, and manageable, issues. Firm leaders shared best practices on engaging, motivating, and growing their teams virtually.

Firms also shared tips on pivoting rapidly to adapt fee structures to the needs of clients that were hit hardest, while meeting the new demand for IP services that arose in growing fields such as financial services and gaming.

“One of AIPF’s member firms presented to the association years ago on the topic of “digital disruption” and how to operate fully virtually, years before most of us had ever heard of social distancing.” - Chris Agrawal, AIPF

Moreover, IP boutiques have always had the advantage of practice focus. While plentiful practice groups and legal specialities offer the benefits of cross-selling and having “something for everyone”, they also have the downside of complexity and competing interests.

Moving a multi-practice group law firm to staff members’ home offices was no doubt a more daunting task than moving a small firm of partners with similar practices and needs. For example, the average IP boutique reported relatively minimal challenges of needing only to confirm that their docketing and IP filing workflows could be translated to a home office environment.

By contrast, large general practice firms urgently required more robust e-litigation solutions, mail routing and forwarding systems, and court filing solutions, all of which involved new cost outlays at a time of significant financial uncertainty.

Finally, IP boutiques have been riding a years-long wave of hyper competition and commoditisation that has already led to increased efficiencies and downward price pressure. When the pandemic arrived in early 2020, some tech companies rushed to pause new IP work, prune parts of their existing IP portfolios, or even renegotiate their firms’ negotiated billing rates and fixed fees.

For better or worse, IP boutiques had already spent decades optimising their two largest costs: real estate and staff expenses. As a result, IP boutiques had business fundamentals primed for the pressure of urgent cost-cutting. Nevertheless, AIPF’s member firms shared with each other various techniques including offering clients temporary rate adjustments, deferring patent office and court due dates, and maximising collections through proactive and thoughtful accounts receivable practices.

By the summer of 2020, it became clear that many technology companies around the world were forging ahead with protecting their valuable IP, notwithstanding the ongoing pandemic. An April 2021 survey of AIPF’s members around the world revealed that patent and trademark work is now busier than ever and that our member firms are hiring and growing more than ever, even in the face of this tumultuous year.

IP boutiques report to have grown through work from existing clients, and by continuing to add new clients who are leaving large, general practice firms for better service and lower rates.

In hindsight, 2020 was a painful and challenging year but it also proved the sustainability of the boutique model. This was true especially for those IP firms fortunate to have a diversified clientele beyond those industries that were hit hardest, such as travel and healthcare.

Any discussion of the pandemic’s disparate impacts requires acknowledging the disproportionate impacts not only on certain technology sectors, but also on entire indigenous and marginalised populations and communities around the world.

And, while boutique firms have flourished as a whole, the pandemic has disproportionately impacted minorities and women in the legal industry. As a result, leaders of successful IP boutiques are left with the privilege and the mandate to continue fighting these inequalities that persist across the technology and legal industries.

Judging by their quick adaptation to thriving in the pandemic, the world’s IP boutiques remain equally as nimble and well-positioned for tackling these next challenges.

Chris Agrawal is president of the Association of IP Firms (“AIPF” www.aipf.com), and a partner at Bookoff McAndrews. He can be contacted at: cagrawal@bomcip.com