Recent report states, specialist professional service consulting house Beaton research +consulting reveals results of survey. The report is going to make uncomfortable reading for executives and practitioners. Side by side it will bring comfort to partners and practitioners at privately held firms, many of whom believes that their independence present an opportunity to differentiate services. The methodology of Beaton should be regarded ‘indicative’ rather than ‘representative’.
Not about this blog but to everyone who listens, perception is more important irrespective of commercial reality and that firms listed within group. Yet extremities of the report were surprising. The news is even worse for client’s perception of service impact of public ownership. It is really very important that the survey report reflects client’s perception, which may be different from reality. The Trans-Trasman IP Attorneys Board (TTIPAB). However, TTIPAB didn’t express any concern that the degree of awareness and understanding of listed group scenario among some clients and the stake-holding public more generally is limited.
Beaton sent its survey report to around 3000 Australian IP, which included domestic and international direct clients as well as foreign associates. The completed and returned by around 143 respondents. However in this case, Beaton does not claim to have applied rigorous standard of design. However, in this case Beaton does not claim to have applied rigorous standard of design. The report states that it is unknown whether the sample of users is itself representative. , There is some reason to believe that this might be the case at least for the foreign associates surveyed, since the majority would operate in jurisdictions in which listing is not a legally-available option. They might therefore not have had reason to turn their minds to the practicalities of establishing structures to preserve existing professional, ethical, and regulatory obligations, while at the same time being particularly aware of those obligations.
Accordingly, it was analyzed that more than 50% of the respondents, did not know whether the firm they used was public-listed or not. The group that has been more responsible in educating clients about the changed ownership appears to be, Qantm IP Ltd, which being the most recent, has had the time to do so. Also, unexpected is the emergence of publicly-listed group appears to have muddied the water more generally with majority od clients of privately owned firms being unable when asked, to positively identify the ownership of service provider.
My understanding is that all firms within the listed groups include statements on their web sites, in their email footers, in their terms of engagement, and on their standard letterhead identifying themselves as subsidiaries of their respective listed parent companies. I also understand that all three listed holding companies have obtained legal advice to the effect that this is sufficient to meet their obligations regarding disclosure of ownership. This may well be so, however in practice it does not seem that it is sufficient to clearly communicate the relevant information to clients.
It is a failure that results in business risk for firms within the listed groups, and for the listed holding companies themselves. Respondents to the Beaton survey are overwhelmingly negative about the consequences of Australian firms’ experiment with raising capital via public markets. They see it as compromising the cost, quality, value, and integrity of service provision, while failing to provide any compensating benefits to firms or their clients. At the same time, there is an opportunity for privately-held firms to capitalize on the mistrust and misunderstanding reflected in the survey results. To date, there has been a tendency for some private firms and individual attorneys to take the low road of spreading fear, uncertainty, and doubt, i.e. to try and scare clients away from firms in listed groups, rather than marketing the positives of independence. This is not only unseemly, particularly in such a small profession, but the Beaton survey results indicate that it is also unnecessary.