Which Metrics Matter When Evaluating Outside Counsel?

in-house evaluating outside counsel

The age of big data is here to stay, and there is so much information out there to access, sift through, and organize to accomplish our goals. As a company evaluating your legal partnerships, how do you know which metrics provide the most insight?

Modern IP professionals rely on analytics to make strategic, data-driven decisions, and everyone approaches the wealth of data out there differently. By starting conversations now that help your in-house team decide what leads to a valuable outside counsel relationship, you can establish processes that find the best possible IP firms to support your future business goals

How do you measure the success of your outside counsel? Ultimately, it comes down to cost and value. 


How to Identify Firm Cost

Cost is easier to define than value. You have the standard USPTO fees for each type of office action. You also can estimate legal fees based on past experience with outside counsel. And now, with the data provided by analytics platforms like Juristat, you can refine your formula to include benchmark firm metrics that represent the average cost of their patent prosecution.

For example, you can identify the average number of appeals, interviews, amendments, and RCEs for each firm. By multiplying those averages with the related USPTO fees and adding them together, you have an idea of how expensive a typical prosecution can be for each firm. 

When assessing cost, remember to bring in metrics uniquely important to your department! If you want to avoid firms that rely on extensions, costing your company more money and time, make sure to include the average number of extensions after a final rejection in your calculations. 

When looking for these representative benchmarks, make sure to limit your review to applications in relevant technology centers or USPC classes. By segmenting your search, you can compare outside counsel based on their performance for similar applications, ranking the legal teams who can best support your company’s most critical innovations.


How to Identify Firm Value

Firm value is a more complicated concept, but you can take a page from firm marketing and see how they are using data to quantify ROI in their sales pitches.

For example, a quick and straightforward way to uncover value is by looking at each firm's average number of office actions in combination with their expected allowance rate.

First, take into consideration the initial preparation and filing of an application. For example, based on the AIPLA’s 2015 Report of the Economic Survey, you can assume that the cost of a relatively complex application dealing with computers or electronics is $10,000. And based on your own industry experience, you can estimate the average cost of an office action. 

Using analytics, you can assign a dollar value to each competing outside counsel by comparing just their average OA track record. Then, by incorporating the allowance rate of each firm, you can calculate which firm will cost the least (based on their average number of OAs) with the highest chance of patent issuance (based on firm allowance rate). 

You can, of course, dive a little deeper into the actual substance of each application. For example, how many independent claims are lost from publishing to issuance? Or, maybe you want to see how many applications prosecuted by a particular firm receive forward citations from competitor applications. These citations demonstrate a firm’s ability to ensure broad claim scope while also adding value to your portfolio through licensing opportunities. Again, there are many ways to define value, and these are just a few metrics to get you started.


By incorporating patent analytics into your evaluation process, you can be very sure that you will find a team of attorneys who add value to your IP assets without draining your budget. Data is still a new tool to many legal teams, and it will take some time to become familiar and structure an approach that accomplishes exactly what you need and want. But putting that time in now will ensure effective outside counsel partnerships, more issued patents for your company, and a more prosperous and innovative working environment.

Want to get started? Our recent webinar, How Leading In-House Teams Evaluate Outside Counsel Performance, covers all of this information and more, including a step-by-step walkthrough on how to create a scorecard analyzing the performance of outside counsel. Take a look at the possibilities and then schedule a demo to see other ways Juristat Patent Analytics can assist your team.

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