Patent attorney clients are notoriously ‘sticky’ – it is well-known that they rarely change service providers. Indeed, out of a sample of 279,035 live applications and patents managed by Australian and New Zealand patent attorneys as of early 2019, only 3,854 (1.4%) were transferred away from those attorneys over the past 16 months or so. Of these. the overwhelming majority (3,813) were transferred to a different attorney/firm, with responsibility for the remainder (230) being taken over by non-attorneys – mostly the owners of the patents/applications. (In the remainder of this article I am going to use the term ‘cases’ to refer collectively to both pending applications and granted patents.)
Within my sample of active cases, 62% are handled by firms in listed groups, 34% by privately-held practices, and 4% by non-attorneys. Taking into account the fact that listed group firms have nearly twice as many cases to ‘lose’, I found no evidence that clients are any more likely to transfer work from firms in listed groups to privately-held firms than they are to transfer in the other direction. The flow in both directions was approximately 0.6% of the size of the respective available pools of cases. Looking at domestic (i.e. Australian and New Zealand owned) cases in isolation, there was a net flow from listed group firms to privately held firms. At the same time, however, clients of listed group firms were less likely to transfer their cases away than clients of privately held firms.
Overall, privately-held firms appear to be the most likely to lose clients, collectively seeing around one in 50 cases transferred away during the period that I have analysed. In comparison, publicly-listed firms saw just under one in 100 cases transferred away over the same time. However, the largest source of ‘churn’ was transfers between firms within the privately-held sector, with 1,344 cases in this category. This resulted in privately-held firms also being the most likely to win clients away from their competitors, collectively acquiring nearly one in 40 active cases from other firms. Publicly-listed firms acquired just one in every 140 of the active cases in their care from competitors over the period analysed.
Patent attorneys generally seem to have a fractious relationship with the kinds of applicants that are inclined to ‘go it alone’. This is perhaps not surprising, given that a major reason for applicants to choose self-representation is to save on costs, and that fees are a leading cause of disputes between patent attorneys and clients. Frankly, most of these clients are best avoided, since they are often more trouble than they are worth (the clients might well say the same of the patent attorneys to whose fees they object). Privately-held firms (which include all the smaller practices) are the most likely to acquire cases from self-represented applicants (220 over the period analysed), and they are also the most likely to part ways with clients in favour of self-representation (185 cases). Listed-group firms (which include many of the largest practices) appear to have far less contact with these types of clients, collectively gaining and losing just 67 and 45 cases, respectively, over the same period.
Looking at individual firms, big ‘winners’ from transfers of cases include RnB IP, Wrays, and FPA Patent Attorneys, while the greatest net losses were experienced by firms including Cotters Patent & Trade Mark Attorneys, Pizzeys, FB Rice, Griffith Hack. For the major firms, however, gains and losses due to transfers of existing cases represent a very small proportion of overall business.