The recent hullabaloo regarding Sarah Palin’s “gold plated” wardrobe from Saks and Neiman Marcus got me thinking about how many companies select patent law firms. This may seem like a non-sequitur, but bear with me. . .
Those responsible for dressing Gov. Palin apparently believed that the large expenditures at Saks and Neiman Marcus automatically translated into value for the Republican ticket by allowing her to be viewed as more “Vice Presidential” than she would otherwise been considered. Notwithstanding the high cost of her new wardrobe, as reported in the New York Times, her overall “look” remains the same as when she campaigned for and served as Governor of Alaska: business-appropriate jackets, feminine skirts and high heels. The response to this wardrobe makeover by a major fashion commentator: “Honey, I could have dressed you for a lot less than that.” From this comment, as well as the continuing backlash about the cost, it appears that the expense of Gov. Palin’s wardrobe does not directly correlate with the value provided to the McCain-Palin presidential ticket.
Not dissimilarly, when I review patent portfolios for clients for valuation and strategy analysis, I often think to myself “you paid WHAT for this patent?!” All too often, otherwise smart business professionals effectively engage in “magical thinking” by assuming that the act of throwing money at a high end patent firm will translate into creating business value. Of course, these same professionals would not believe that the mere act of spending of money will result in value creation in other areas of their business. So why do they do this in the patent realm?I believe that the information costs associated with vetting and selecting patent legal services make it difficult for busy business professionals to make informed decisions in their company’s patent matters. Without legal training or substantive business experience in patent matters, the vast majority of business managers likely do not believe themselves to be capable of directing strategic decisions about their company’s patent portfolio. They therefore cannot rationally make the decision to identify a low cost, but otherwise excellent, patent law firm to work on their patent matters. For lack of any other means by which to select counsel, they assume that company value will be increased if they hire the patent law firm equivalent of Saks and Neiman Marcus, even when they could have obtained the same patent “look” by hiring a much less expensive law firm.
Fortunately, there is a solution to the patent law firm information cost problem. The emerging speciality of intellectual property (“IP”) business strategists can provide business professionals with the information necessary to make educated and more cost appropriate selection of patent legal counsel. An IP business strategist can effectively operate as a business professional’s “personal shopper” in selecting patent counsel and in assisting in managing patent legal expenses. In this role, the business IP strategist can obtain the right patent “look” for a company by knowing where to shop for legal services.
This is not to say that the business IP strategist would never select the Saks or Neiman Marcus equivalent of a patent law firm. Situations certainly exist where the cost of such a patent firm would be justified, such as in a so-called “bet the company” invention or litigation. However, as a “personal shopper” for patents, an IP business strategist can allow a business professional to make an informed decision about the appropriateness of such higher costs.
Moreover, the IP business strategist also understands the profit margins associated with patent law firms and, as such, will be better able to negotiate a discount with the law firm. That is, the patent “personal shopper” can help a business professional to obtain Saks and Neiman Marcus quality at a “sale price.” And, who doesn’t love to get a high quality product at a discount?
A “personal shopper” for patents will not necessarily result in reduction of a company’s costs, however, I can virtually guarantee that the quality and overall value of the patent portfolio will increase. Also, it is highly likely that the cost savings enabled by a company’s engagement of an IP business strategist will cover the cost of hiring this specialist. As more companies become aware that legal cost does not necessarily equate with patent value, the more IP business strategists will be seen as a useful way to improve the way one obtains patent legal services.