So last time I left you dear readers we were discussing the price at which a partner of patent attorney firm could sell their firm. In my mind, as I grew up in a more innocent era, it leaves me with the image of Scrooge McDuck diving into a swimming pool full of dollar bills. In this age of ApplePay and credit cards, that image doesn’t resonate any more and an image of Scrooge McDuck rolling around on his iPhone lacks the visceral impact. Damn you technology…
One of the consequences that avid observers of the profession will have noticed is that a number of partners who have sold their interest in a firm have subsequently retired or moved on. There is an argument that this is a tragic loss of expertise and experience and there is obviously some merit to that argument but, on balance, I consider the exit of the more senior partners and attorneys to be positive. Expertise and experience are one thing, but giving less experienced and hungry patent attorneys the opportunity to grow the business and take it from strength to strength is another.
But are there benefits to the business and the more junior staff? Let me tell you a story. Once upon a time I was a very junior partner in a mid-sized firm. There were a number of senior partners who, as part of the partnership deed, were entitled to an ongoing “salary” after retirement for consulting services. In effect, it was a substitute for superannuation which at the time the partnership deed was written was not well established. The “salary” had been removed as an option for more junior partners in the deed, so really the payments were now a special benefit only for the senior partners.
There was a bit (read, a lot) of resentment about this amongst the more junior partners which occasionally came to a head but in amongst the general furore about intergenerational equity (you can see the arguments reflected in all sorts of ways in this day and age), there was one comment of clarity from an outsider who used to be a partner of the firm. It was along the lines of “you’ll be repaid many times over for the amount you spend moving them on”.
And, it was true. Despite the loss of experience and expertise, this firm has now leapt ahead from its previous position and would now be regarded as one of the top tier firms in Australia.
Now, sure, listing patent attorney businesses and acquiring smaller firms is quite a drastic way of driving intergenerational change and making sure businesses grow and prosper! However, this process has managed to clear the way in a stagnant market where it was becoming apparent that partnerships that had their beginnings in an age of constant growth were ill equipped to deal with a market that had little growth prospects in the short to medium term (apart from Asia of course, that magical land, and the partnerships I am talking about had little prospect of making an impact there).
Reading back over what I have just written, I can see there’s a lot more to say on this topic, I’ll leave it for later. I think you get the gist.