How Big Law Hurts Startups

Many inventors and entrepreneurs like to tout their relationship with a Big Law Firm.  It is too bad they do not know how the sausage gets made. 

Touting that Big Law wrote your patents is not a badge of quality

I review countless patents for startup companies and talk to lots of entrepreneurs. One of the things I hear a lot is that some big firm did their patents.

When asked why, they often say that it gives their early investors confidence that the most expensive law firm in the country wrote their patents. Supposedly, this is a badge of quality.

I am reviewing their patents to see if we can use the assets as collateral, and lots of these patents from Big Law are absolutely awful.

The reason is that the entrepreneur talks to the partner, but the work is done by the first year associate in a windowless back room.

Once I pull up the file history of their patent, I can see that someone with a very high registration number filed all the papers. A high registration number means that person has recently passed the patent bar exam and is just starting out.

You see the effects in many places. The writing is twisted and convoluted, meaning that the newly minted attorney did not fully understand the invention.

Big Law cannot service small clients efficiently

In many cases, the attorney who writes the patent is hidden from the client.

The partner might do a disclosure interview with the inventor to get the details of the invention. Typically, these are taped. The partner’s notes and the tape are given to the first year associate and told to write a patent application.

The partner has done countless patent disclosure meetings in the past and probably knows the technology pretty well. This comes from experience. The partner might not know that they are skipping over a lot of basic information that the first year associate has never seen.

Nevertheless, the partner cannot spend any time on the case because there isn’t enough budget, so they do a quick disclosure and give the recording to the associate.

The associate typically does not have experience in the industry and has never written a patent application before (or has only written a few).

They are left on their own to try to figure out the technical aspects and cobble together something that the client will like. The best way to do this is to obfuscate everything in legalese and play “hide the ball.”

The client is not an expert in patents and does not realize that dense, incomprehensible legalese is not the mark of an expert – it is the mark of an amateur. However, the client is terrified of the bill if they push back and demand a better patent, so they take whatever they get.

Fast forward a few years and the client is asking me if we can do a loan using the patent. The claims are a mile long, completely undetectable, and the specification is a complete mess. I can tell that it was written by a novice. But it came from Big Law.

Big Law needs to train their low level associates

The economics of Big Law means your work is being used to train low level associates.

Big Law is all about churning work through the machine.  In general, partners bring in the work, then feed it to the associates.  The partner is the client-facing person and gets paid a percentage of the billings, but the real work is done in the windowless back room.

Big Law makes most of their money with Big Clients.  The Big Clients often are smart enough to tell the partner that they want to vet every attorney who touches their work.  When I did a lot of patent work for Microsoft, they wanted to run every attorney through a qualification process, and if they found out someone who was not qualified by them was working on their matters, the entire law firm was fired.

So, how does a first year associate get any work to do?  It is from the small clients – especially when the small clients want to “save money.”  If you think your work is being done by the big partner in the Big Law Firm, you are mistaken.  The partner may “review” the work, but it is essentially the chum that they use to train their associates who are too unqualified to work for the firm’s real clients.

What about small firms?  Some are fantastic, where you talk to the actual person who is doing your work, and they are small, nimble, and have great customer service.  In many cases, the attorneys have exceptional experience and can be a big value.

On the other hand, you might run across a small firm with virtually no real-world experience.

How to find a good attorney?  Use the process in this blog post entitled “How to Find a Good Attorney.”