Category Archives: Legal practice

Legal fees: what is the right level of charge?

expensiveAccording to some who would consult for professional services firms, at least a third of your clients should be complaining about the fees they are asked to pay; if this isn’t happening, you aren’t charging enough. Statements of this kind capture one’s attention, which is what the financial services salesman wants to do. But is there any substance in the argument? Should one be striving to achieve what might be called an equilibrium of dissatisfaction among one’s clients?

In IP Draughts’ view, remarks of this kind should be treated with extreme caution. People don’t always complain; they just don’t instruct you on the next matter. If the fees are known to be high, you may not get instructed in the first place. Complaining mid-transaction or mid-litigation may be thought unwise, if it results in a loss of care and attention from the service provider, or necessitates a change of pilot, mid-stream. Many complaints about legal fees are not about the rates per se, which are usually known in advance, but about over-egged time recording by associates and trainees, which the responsible partner has been too busy, careless or venial to correct. If the issue gets as far as a formal complaint, the relationship may be in severe jeopardy.

Over the years, IP Draughts has advised clients many times on other lawyers’ fees. Sometimes, a quiet word in the ear of the senior lawyer concerned is enough to address the issue. Sometimes, a better process is needed for discussing bills in advance of their being submitted. Sometimes, discretion is the better part of valour. Many years ago, a well-known City law firm advised one of IP Draughts’ clients, a publicly listed biotech company, on a major research collaboration agreement. IP Draughts was asked to assist the CEO with his review of the fees that the firm charged.

can't affordThe first point to note was that fees were rounded up or down to the nearest £2,500. At the time, most of IP Draughts’ invoices were for less than this amount, so a rounding of this magnitude would have resulted in either a free or very expensive service, depending on which way the rounding went!

Secondly, the partner had spent nearly a week drafting the agreement, which seemed ludicrous, both in terms of the time spent and the fact that a senior partner had done the drafting at very expensive rates.

Thirdly, an associate in the firm’s competition department had recorded 8 hours to review the agreement from a competition standpoint. This was a breathtaking amount of time for something that should have taken an experienced competition lawyer (or at least one who knew about IP) no more than a couple of hours.

IP Draughts advised the client to focus on the main drafting time and partner rates, and not to waste powder on the competition law charge. And to consider using a less expensive firm next time. Subsequently, the company appointed a mid-tier London firm to be their corporate lawyers. The previous firm had been a self-indulgent luxury.

For some major public companies, perhaps they need, or think they need, to use a major City firm for large transactions. And perhaps in that situation they are more inclined to complain about fees than switch firms. So, maybe the consultant’s claim, that at least a third clients should complain, works in that situation. IP Draughts recalls a major company CEO commenting publicly some years ago about the fees charged by Slaughter and May. They provide a very good service and charge fully for that level of service, was his diplomatic way of putting it.

cheapIP Draughts looks at the subject rather differently. He prefers to get, and does get, comments from clients that his firm provides a very good service and very good value for money. That doesn’t mean we’re cheap! Marketing experts say one should never claim to be cheap, as the word has the wrong associations. By comparison with High Street firms, we are expensive. Reassuringly expensive, perhaps. By comparison with large IP and commercial firms in London, perhaps we are cheap good value. You decide.

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Interpreting an expenses policy

expensesAt our recent partners’ meeting, Mr Pettifog was in a lather about an expenses policy. He is a committee member of an international grouping of lawyers, known as Societe des Avocats du Droit d’Oeuvres, or SADDO for short. SADDO is an agency of the United Nations, and Mr Pettifog is frequently absent from the UK on official SADDO business.

SADDO has a generous expenses policy, or so Mr Pettifog thought. However, his recent claim for reimbursement of expenses when he was on a jolly important cultural mission to Milan has been turned down. This has meant that Mr Pettfog is out-of-pocket to the tune of several thousand Euros for 5-star hotel accommodation, bottles of champagne, chauffered limousines, and so on. Not to mention tickets for the opera for himself and several members of the Milan Bar. Having failed to recover these expenses from SADDO, he has tried to claim them from our firm, but our expenses clerk and archivist, Deirdre Sprocket, rejected his claim on the grounds that the expenses were not incurred on firm business. Hence his fury.

After he calmed down a little, he asked the firm’s junior partner, Dominic d’Aubusson, if he would start an action in the English High Court for judicial review of the SADDO policy, on the basis that SADDO is a quasi-governmental agency and therefore subject to judicial review. In particular, Mr Pettifog objected to the following terms in the FAQs sections of the policy:

  1.  Question: When there are two claimants sharing a room, may the individual allowances be added together? Answer: Where two people are required to stay overnight on business and wish to share a room, claims should be made in the spirit of the policy. Claims for shared rooms should not exceed the maximum reimbursement allowance for overnight accommodation for a single member. [It seems that Mr Pettifog and his friend and fellow committee member, Edmund Longshanks QC, decided - towards the end of a very good meal at Il Luogo di Aimo e Nadia - to book a room together in Milan that cost roughly twice the amount of the hotel allowance for individual committee members. They can't understand why this wouldn't be allowed, as it cost SADDO no more than if they booked separate rooms. Mr Pettifog wants Dominic to run the argument that this refusal is based on a policy of discrimination against homosexuals, while avoiding any suggestion that he is, in fact, a homosexual.]
  2. la scalaQuestion: Can members claim for taxi journeys to collect paperwork from an office that is not their usual place of work to take to a SADDO meeting? Answer: If this is an irregular occurrence this detour en route to a SADDO meeting can be claimed. If this becomes a regular occurrence, then the costs cannot be claimed as regular occurrences may mean it becomes a commuting journey. In order to avoid this, it is respectfully suggested that members look at different methods of collecting papers. [Mr Pettifog is of the view that Teatro alla Scala, Milan, counts as his office for this purpose, in that he had left a copy of some confidential client papers in the crush bar several nights earlier and came back to collect them. Therefore, he should be able to claim for taxi journeys to and from La Scala. Surprisingly, it seems that the Secretariat of SADDO disagrees with this interpretation of the rules.]
  3. Question: Are members entitled to claims taxi fares to and from the restaurant where they are taking their evening meal? Answer: Costs will only be reimbursed if the taxi journey was milano-transportation-maptaken home / back to their hotel late at night when there is either no public transport or it would be unreasonable to expect someone to use it. [Mr Pettifog wishes Dom to argue that it would be completely unreasonable to take public transport after an evening on SADDO business entertaining foreign dignitaries. He feels it would leave a very poor impression with said foreign dignitaries. Apparently the SADDO Secretariat is suggesting that he could have caught a Metropolitan Line train from Duomo station, very near La Scala, which would have taken him directly to his hotel.]

Readers who have experience of interpreting expenses policies, or of actions for judicial review, are invited to comment on whether Mr Pettifog’s action is likely to succeed.

 

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Is it career-limiting to practise IP law?

This provocative thought is prompted by considering the careers of two prominent lawyers and judges, and comparing them with those of specialist IP judges. IP lawyers who become judges seem to reach a glass ceiling at appeal court level.

Baron Neuberger of Abbotsbury

Lord Neuberger, before he became President of the Supreme Court

Lord Neuberger, before he became President of the Supreme Court

IP Draughts calls as his first witness Lord Neuberger, the current President of the UK Supreme Court. Lord Neuberger has the necessary skill-set to have been a successful IP barrister, and in fact he has been involved in judging some of the leading UK patent cases of recent years. His scientific aptitude is demonstrated by a chemistry degree from Cambridge, while his clarity of thinking and writing can be seen in his judgments and speeches. When IP Draughts ran Lord Neuberger’s judgment in the recent patent case of Virgin Airways v Zodiac through the BlaBla Meter, he scored 0.15, which is a phenomenally good score. Instead, fate took David Neuberger to Falcon Chambers, a set specialising in property law.

A few years ago, IP Draughts sought advice from specialist insolvency counsel on behalf of a university client. The question was whether patents could be assigned to a spin-out company on terms that enabled an automatic reversion of the patents if the spin-out company went into liquidation.  This is a notoriously difficult objective to achieve. Counsel’s best line of argument – an assignment of a determinable interest – relied for authority on comments from Neuberger J in a non-IP case, Money Markets v London Stock Exchange [2002] 1 WLR 1150, where he said:

It does appear well established that an interest granted on the basis that is inherently limited on insolvency is recognised by the court. In other words, a determinable interest, that is an interest with a limitation until insolvency, is valid, see the discussions in Snell’s Equity, Underwood and Hayton, and Professor Goode’s book and the passage quoted above from Fry LJ in Ex p Barter, ex p Black, ex p Walker (1884) 26 Ch D 510 at 519–520. It must, I think, follow that an interest granted on the basis that it is inherently limited on some other event is effective, even if that event occurs on or after an insolvency.

A full discussion of this legal issue must wait for another day. IP Draughts’ general point is that Lord Neuberger’s stellar career has intersected with IP at various places, but he has not been a specialist IP barrister. Might his career have been more limited if he had practised at the IP bar? Would he have become Master of the Rolls and then President of the Supreme Court? Based on the precedents of specialist IP judges, IP Draughts wonders.

Viscount Alverstone of Southampton

Lord Alverstone

Lord Alverstone

IP Draughts’ second witness may be less familiar to present-day lawyers: Lord Alverstone, who was Lord Chief Justice from 1900 to 1913. His witness statement takes the form of a book of memoirs, titled Memories of Bar and Bench, published in 1914. Some years ago, IP Draughts’ friend Edmund Longshanks QC gave IP Draughts a second-hand copy of this book. Before his elevation to the Bench, Lord Alverstone’s name had been Richard Webster. Webster had a very successful career as a barrister, appearing in most of the leading patent cases of the day, and taking instructions from clients as diverse as Lord Kelvin, Thomas Edison and Florence Nightingale (and from leading firms of solicitors such as Linklaters). The summit of his career as a barrister was being appointed Attorney General, at which point he had to turn his hand to prosecuting criminal cases, including that of the famous murderer, Dr Crippen.

Dr Crippen

Dr Crippen

In his book, Lord Alverstone emphasised the importance to his career of not allowing himself to be typecast as a patent barrister. He maintained a broad commercial practice before becoming Attorney General. For instance, he handled many railway compensation cases (compensating landowners whose land was taken over by the railways) and was leading counsel in a Board of Trade enquiry into the Tay Bridge disaster.

Admittedly the world was less specialised in the late nineteenth century than it is today. But the lesson that IP Draughts takes from these two examples is that if you focus predominantly on IP law, you may find there are some natural limits to your judicial career, no matter how talented you are. IP judges in the UK seem to get no further than the Court of Appeal, while the summit of US IP judges’ careers may be to become Chief Judge of the US Court of Appeals for the Federal Circuit. It would be interesting to see a specialist IP judge in the Supreme Court of either jurisdiction.

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Equality and diversity in intellectual property

work partyThe Law Society of England and Wales has an Intellectual Property Working Party (IPWP), of which IP Draughts is a member. After several years’ campaigning, the IPWP has recently been upgraded to become a committee of the Law Society. While this has some major advantages in terms of influence and access to Law Society resources, it also means that we are now subject to more Law Society rules.

Yesterday, IP Draughts received an email from the Law Society, telling him that he had to complete an online, interactive training programme in “equality and diversity”, taking about an hour, as a pre-condition of being allowed to serve on this new committee.

IP Draughts took the programme yesterday evening. It was slightly more entertaining than he had feared. Students were required to match nationalities with characteristics, to demonstrate lazy prejudice. He enjoyed pairing up Scotsmen with the characteristic “sunny personality”, and Italians with the characteristic “coldly logical”. This wasn’t playing the game, though. More seriously, he got a couple of questions wrong in the online exam at the end of the course. Note to self: peer bullying is harrassment and not victimisation for the purposes of equality legislation. Giving an employee an unfair assessment, with the result that their performance deteriorates, is a self-fulfilling prophecy. No marks are given for calling this a vicious circle.

The vocab of the equality community is tiresome; the underlying objective is worthwhile. As a quasi-public body, the Law Society feels it has to be at the cutting edge of best practice in this field. All solicitors’ firms in England and Wales now have to conduct an annual survey of staff, to determine how equal and diverse the firm is. The most distinctive aspect of IP Draughts’ firm seems to be the number of its lawyers, IP Draughts included, who were the first generation of their family to attend university. This is not a measure of diversity that is commonly discussed. It seems to be easier to make assumptions about a professional firm based on race or gender, or whether its members attended private schools.

working partyThe equality procedures that some organisations follow, with the best of intentions, can seem like mindless bureacracy. When the IPWP recruited new members a year or so ago, the names on the application forms were removed by Law Society officials, presumably so that the interview panel could not be adversely influenced by a foreign-sounding name. However, this had the ludicrous result that with one applicant, who was attending the interview by phone, we had to call a mobile phone number without knowing who to ask for. It took a while for us to establish that we had the right person (“Hello? Hello? Who are you? Who are you? etc). Even for applicants who attended the interview in person (in a basement room of the Law Society that had once been a prison cell – wonderful atmosphere!), it was ridiculous having all the data about them and their career other than their name. The sense of the ridiculous was compounded when we later discovered that the Law Society did not follow this procedure when recruiting its own staff.

Coming back to the online course, some of its teaching should be obvious to anyone who is experienced in contract drafting and negotiation. Saying that someone “is an invalid” carries a loaded meaning that is absent in the phrase “has a disability”. The loaded meaning is in two parts: first, it confers a status on the person (“is”) rather than just describing an attribute (“has”); and secondly, it uses a word – invalid – that has secondary and pejorative meanings. If readers will forgive an earthy analogy from the world of IP licensing, in negotiations it is usually more productive to say that a comment is bullshit than to call the person who made the comment a bullshitter.

shadDigressing slightly, in his childhood IP Draughts was puzzled and slightly shocked by a line from the classic Cole Porter song, “Let’s do it – let’s fall in love”. The line went “folks in Siam do it, think of Siamese twins”. Cole Porter’s acidic wit took few hostages.  Later in the same song, after exhausting nationalities, he turns to different types of fish. Only recently has IP Draughts come to understand the line “why ask if shad do it, waiter bring me shad roe”. Shad is not often on the menu in English restaurants. Nor are its eggs.

IP Draughts’ sense is that the people who practise IP law in the UK are not representative of the population as a whole, but this is not due to any direct discrimination against people who have what the legislation calls “protected characteristics” – race, gender, age, etc. Perhaps there was a clubby, public (ie private) school atmosphere a couple of generations ago, but that is no longer the case, at least in IP Draughts’ experience. Perhaps the influx of scientists into the profession has helped to make it more diverse. The distinctive character of the IP profession may be based, at least in part, on the expectation of very high educational qualifications among its practitioners, which tends to favour some groups over others. More could be done to encourage disadvantaged groups to aspire to become commercial lawyers while still at school. Some of the largest City firms are involved in initiatives in this area.

Fortunately, IP Draughts’ main prejudices (we all have them, what counts is how we deal with them) are not protected characteristics, at least for now. Hopefully, the time will never come when it is illegal to discriminate against someone who “doesn’t give a shit”, and in favour of someone who tries their best.

 

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