As we mentioned last week, we’ve started monitoring quite a few more IP invoices from law firms. Most of our corporate clients focus on annuities, but with firms, it’s across the board and covers nearly every IP service. So, this week, we thought we would dig into what’s going on.
Changing Attitudes About IP Invoice Control Within Firms
E-billing and legal invoice control aren’t new concepts for corporate IP teams; most have had some type of system in place for years if not decades. Regarding IP firms, the story has typically been very different, with invoices from international associates and vendors like annuity providers facing comparatively less formal scrutiny. Based on discussions with firms worldwide, attitudes about invoice control within firms are changing – let’s look at the top three drivers of change.
A New Generation of Fixed Fee Agreements
Firms report receiving an increasing number of fixed-fee agreements that require fixed-fee arrangements with international associates. Some firms are even required to include international associate fees in their fixed fee rather than simply passing along an invoice. Either requires additional oversight to ensure billing aligns with a client’s billing arrangements.
Clients Are Demanding Transparency
Many IP firms use vendors for services like patent annuity payments. Cost-conscious clients are beginning to look into the details behind these invoices and are raising questions about currency costs and agent fees with their firms. We are seeing more and more firms begin controlling these types of invoices so that they aren’t on the defensive when the inevitable questions come in.
Sometimes, Funny Business Happens
Some firms report receiving discounts from international associates, only to discover that inflated official fees or additional unnecessary charges offset the discount. This is what we call the “Trifecta of Pain”. The firm has to divert resources to monitor these invoices, doesn’t realize the expected value of the discounts, and loses trust in one of its partners. Ouch.
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