IP law firms: time to wake up
Unless IP law firms realise that it’s time to “wake up and do something”, a large part of the IP industry as we know it will soon be gone, says Volker Spitz, chief executive officer of Brandstock, an IP service provider.
Spitz says that the way organisations manage their IP has changed “completely” over recent years, and traditional law firms must adapt—or risk becoming redundant.
The main factor behind this transformation is the injection of private equity into the IP market, which investors have increasingly seen as an available target over the past decade, he suggests.
But, over the last three years in particular, the influence of private equity in the IP market has been particularly “massive”, according to Spitz.
Investments have increased from millions of dollars to billions, while at the same time, there is more pressure than ever before to produce fast and large returns for the investor, he explains.
This cash injection has resulted in a “shift from traditional IP law firms to private equity-owned service providers”, explains Spitz.
Now, the IP market is “totally dominated” by these service providers, whereas once upon a time the IP law firms had a stronghold.
“Traditional IP firms are struggling with this development,” says Spitz. “They have a hard time coping with what’s happening.”
Back to basics
To understand why the change is so huge and how firms need to adapt to survive, it’s necessary to go back to the beginning.
Previously, the IP market was dominated by law firms.
Simply put, attorneys came together and focused on a couple of areas, such as patent renewal or trademark filing, Spitz says. Service providers were few and far between. But after the IP market was tapped as an available target about ten years ago, people started to invest, and the landscape is now very different.
Private equity investors have continued to look at more traditional sections of law firm businesses that were initially left alone, such as trademark searches and filings, explains Spitz.
“The only piece left alone now is litigation,” he warns, as everything else in the IP market is up for acquisition.
Alongside the investments are the “young, small startups that are popping up in the IP industry”, Spitz says.
He adds that young companies are entering the IP market with “disruptive solutions and great ideas”, using technology to provide solutions to IP management.
Investors have now expanded their field of activity “tremendously” into nearly all forms of the IP business, Spitz claims, and this cash boost tends to be accompanied by the added benefit of a technological makeover.
As such, private equity-owned service providers often have a modern, cost-effective, and customer-friendly platform to work from.
