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The intellectuals’ property Barristers only leave 8 New Square to join the judiciary or – in one instance – climb mountains. Legal Business examines whether its success as an IP powerhouse answers the Bar’s increasingly vocal critics CAMILLA SUTTON
BARRISTERS RARELY GET GOOD press – they’re accused of charging extortionate fees, often for relatively short bursts of work. Solicitors, meanwhile, are making a claim on advocacy, the QC system is in crisis, and at the other end of the scale, Telegraph correspondent Harry Mount waxes lyrical in a new book about the hellishness of pupillage. All told, talk of the Bar’s malaise is regularly hitting the headlines. Indeed, just as this piece was going to press, Legal Business was sent an anonymous letter that included the line: ‘How can a QC who got the call in 2002 (after several attempts) justify a fee of £80,000 for a hearing lasting one day, on a straightforward point of law?’ The anger vented encapsulates the fundamental issue that follows all high-earning professionals – the provision of value. If a set of chambers
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> doesn’t offer it, solicitor advocates are ready to pounce. Talk about pressure. To test if and how the Bar can provide value for a client’s money, Legal Business turned to 8 New Square, a set of intellectual property specialists. Contrary to many prevailing perceptions, the results show how efficiency and legal expertise can actually be far more focused at leading chambers than at some larger solicitors’ firms: transparency of hourly chargeout rates, for one (see box on p46, ‘IP performance’).
Money talks As in any other business, commercial vibrancy is the essential factor. A glance at 8 New Square’s figures confirms some reasons to stay loyal: between the beginning of March 2003 and the end of February this year, the set’s 23 barristers billed fees totalling £7.85m. (It takes 101 fee-earners at top IP solicitors Bristows to bill £18.1m, according to the LB100.) What’s more, 8 New Square figures are growing fast: in the last six months alone, £5m has been billed. Individually, the most sought-after tenants – most solicitors instantly think of the legendary David Kitchin QC – are knocking on the door of the £1m-a-year club, commanding hourly rates of up to £600. Even the most junior juniors are billing six-figure sums. 8 New Square is one of three sets that dominate the IP Bar in this country.
HISTORY 8 New Square began life over a hundred years ago as 5 Fig Tree Court. The set began to specialise in patents during the first decade of the 20th century, and by 1930 its reputation for expertise in intellectual property law had been established. In 1941, 5 Fig Tree Court was damaged in the Blitz, and those who were still in practice withdrew to 1 Gray’s Inn Square. In 1945, chambers moved again to 8 King’s Bench Walk, and then once more in 1957, to Francis Taylor Building. Finally, in 1993, chambers found its present home. Compared to its two closest rivals, Three New Square and 11 South Square, 8 New Square is the largest, housing 23 practising intellectual property barristers. The set also boasts a number of prominent former members including Lord Justice Jacob, Mr Justice Laddie, His Honour Judge Michael Fysh (who presides over the Patents County Court), and door tenant William Cornish QC, professor of law at Cambridge University.
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During 2003, the set appeared in 35 reported IP cases before the Patents Court, Court of Appeal, House of Lords and European Court of Justice. It has at least one member of chambers appearing in over 80% of the hearings and applications that are listed in the Patents Court up to March 2005. Yes, the barristers are bright, that’s a given – they have the edge though, because almost every single one is a science as well as a law graduate. ‘It means the technical side is covered,’ explains head of chambers, Mark Platts-Mills QC. ‘Often, much to their surprise, we can talk the same language as the experts that we examine and cross-examine.’ The set itself, a grade-1 listed building in the heart of Lincoln’s Inn, feels like a rabbit warren. Traditional panelled walls encase legal tomes, plush carpets are underfoot and period features abound. There is still an ancient safe built into the walls where confidential documents would be locked up overnight. Make no mistake though, this set is not old-fashioned. In fact, the clerks’ room has won two recent design awards, and was described in the 2003 Digital Office Collection, a competition organised by The Times, as ‘a cutting-edge work space with state-of-the-art technology’. The barristers are supported by a team of seven clerks, plus a discreet retinue of cleaners and caterers. The chambers’ administrator, Henrietta Kingsbury, deals with the accounts before they are audited by Place Campbell, a firm of accountants widely used by London’s barristers.
MARK PLATTS-MILLS QC, HEAD OF CHAMBERS With a twinkle in his eye, Mark Platts-Mills QC grins broadly and recalls the first time he was on his feet. It was a plea in mitigation, in Camberwell. ‘I was representing some rogue,’ he says mischievously, ‘and my opposition made a point of rather embarrassingly remarking that a word I’d used didn’t actually exist. “It’s dissociate, not disassociate,” she whispered loudly. Looking back though, I don’t mind at all, as the barrister in question went on to become Lady Justice Heather Hallett.’
All this doesn’t come cheap. The combination of prime location, specialist accountants and the high ratio of one clerk to just over three barristers leads to hefty expenses. Last year they came in at £1.28m. The expense budget projected for this year will increase to £1.36m – a modest rise in comparison to the projected growth in fee income. The powers that be at Lincoln’s Inn have raised rent to a breathtaking £54 per square foot which, together with rates and service charges, will amount to £450,000. Individual contributions are calculated by dividing the square
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it,’ he says emphatically, ‘unless the client absolutely insists. If necessary, we will make a second booking, but they know it’s at their own risk, and we’ll always make sure an alternative arrangement is in place.’ The flip side of reserving someone’s diary at the risk of a case settling is that members of chambers are expensive, especially at the top end. ‘At 8 New Square, you get what you pay for,’ remarks Taylor Wessing healthcare IP partner Mark Hodgson. Following a review at the beginning of
‘Often, much to their surprise, we can talk the same language as the experts that we examine and cross-examine.’ Mark Platts-Mills QC footage of each barrister’s room into this total. The remainder of the budget is spent on staff salaries. Overall, each tenant contributes between 16% and 17% of their gross income to expenses.
Management structure With a set of chambers, where each member is essentially self-employed, a cohesive management structure is imperative. Issues such as strategy, employment, marketing, accounting and IT all need to be addressed, but clerks are busy clerking and advocates are busy advocating. At 8 New Square, John Call, senior clerk of 27 years and a member of the Legal Practice Management Association, takes day-to-day responsibility for chambers’ management. He reports to a management committee that meets four times a year and is made up of five barristers who range in experience from the head of chambers to Lindsay Lane, a junior of eight years’ call. The committee is answerable to the annual chambers meeting. The key, obviously, is to make sure instructing solicitors keep coming back. Various initiatives have been implemented to minimise complaints from the other side of the profession. For a start, short of breaking it down into six-minute units, billing at 8 New Square is particularly transparent. Although time sheets are now a requirement of the Bar Council in case fees are challenged, their level of detail relates directly to their degree of usefulness. In chambers, members are increasingly encouraged to give more information, describing what exactly the work product was and which aspect they were working on. ‘Matter X: two days’ prep’ is no longer acceptable. The time it takes for written work to be turned around is also paramount. ‘If a solicitor has asked for a realistic time estimate, you can’t make a promise and then let them down,’ says senior junior
James Mellor (who would probably have taken silk by now had the system not been suspended). His assertion isn’t empty: for administrative purposes, chambers is split into four groups, and the clerks have a system of tracking deadlines through an individual’s work in progress report. Prep time is written into the diary. Granted, penalty clauses aren’t in place if deadlines are missed but, as Mellor points out: ‘It’s perfectly reasonable for a solicitor to hold you to a deadline. If, despite the clerks tracking it, you still miss it, in this market, the penalty is that the solicitor won’t instruct you again.’
Single-booked In such a niche practice area as IP, Chinese walls are a real issue, as it’s common for a number of barristers from the same set to be working on all sides of a dispute. Direct faxes and e-mails have all but eliminated the possibility of documents ending up in the wrong place but, more importantly, 8 New Square has a formal arrangement whereby the clerks, irrespective of whom they usually work with, split into two separate teams in the event of multiple instructions on the same case. ‘That way,’ explains senior junior Richard Meade, ‘you can plan conferences and without notice applications without fear of your tactics leaking to the other side.’ Double booking is a subject that John Call feels strongly about. ‘Our policy is never to do
JOHN CALL, SENIOR CLERK John Call became a clerk at the age of 16. He was a junior clerk at a common law set for two years before moving to 6 Pump Court (latterly 3 New Square). At the age of 24, he moved again to what is now 8 New Square. At 27, he was appointed senior clerk, and has been running the clerks’ room for 27 years – exactly half of his life. A man with a quiet, unassuming manner, he knows every twist and turn of the legal IP market and is totally dedicated to the chambers.
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> January, the eight silks (or equivalent) command hourly rates of between £300 and £600. The six senior juniors charge between £220 and £300 an hour, whilst the five middle juniors (called between 1995 and 1997) charge between £140 and £180, and the four youngest members of chambers, with up to four years’ call, cost a very reasonable £80-£125. However, as every litigator knows, much depends on the individual circumstances of the case. Media and entertainment work tends to fall towards the lower end of the price bracket, with technical patent disputes demanding higher fees. Robert Anderson, head of international intellectual property at Lovells, is pragmatic. ‘They’re not cheap, but then none of these chambers are,’ he says. ‘In the type of cases we’d instruct
IP PERFORMANCE: 8 NEW SQUARE’S PRICE LIST Pupil
Five years’ call
Ten years’ call
20 years’ call
Chargeout rates
£0
£125 p/h
£180 p/h
£330 p/h
Fees billed
£0
£170,000
£235,000
£680,000
Overheads
£0
£30,000
£40,000
£115,000
£20,000 (£10,000 guaranteed earnings, £10,000 award)
£140,000
£195,000
£565,000
Gross earnings
None of the top six IP solicitors firms contacted was able to provide comparable chargeout rate information
them on, you don’t go shopping on the basis of price. We look for someone who is intellectually able – someone who understands the technology and is capable of examining expert witnesses.’
Two strands
IONA BERKELEY, A STAR JUNIOR Iona read Biological Sciences at Trinity College, Oxford. ‘It was only in my third year that I started to think about a possible career,’ she admits. ‘I wanted to be a lawyer, in particular an advocate, but loved my science and wanted to use it. The IP bar seemed like the perfect fusion of the two.’
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Anderson continues: ‘We’re still very happy to use the junior bar. More and more often, there is a sharing of tasks between us and them.’ The junior members of chambers are happy to blur the traditional distinction between barristers and solicitors. The point, it seems, is to be part of a team. If it’s in the client’s best interests for a junior to be involved in the discovery process, then so be it. If a second opinion is required on correspondence or draft documents, fine. At a few days’ notice last year, 8 New Square junior James Abrahams found himself being whisked off to India for two weeks to see if a factory infringed a patent. Site inspections – bring them on. It seems that no job is too big, small or exotic. The juniors’ desire to be, frankly, more useful doesn’t spring from the threat of inhouse advocacy. ‘As part of a specialist set, to be honest, I
haven’t seen a dramatic rise in solicitor advocacy,’ remarks Iona Berkeley. ‘I’ve only faced one solicitor advocate since I joined chambers four years ago.’ The niche firms bear this out. ‘A lot of our work is high profile and high value,’ says Simmons & Simmons IP partner Jeremy Morton. ‘Clients like GlaxoSmithKline and LG Electronics want a crack team and they want to win. We’re very happy to work with counsel, and line someone up at an early stage. We have one partner and three assistants who are qualified solicitor advocates, but at the moment we deal with relatively small applications and trademark oppositions inhouse. One day we’ll consider running our own cases, but not quite yet.’ Bristows IP partner Edward Nodder adds: ‘It’s my gut feeling that solicitor advocates will take work away from the bottom of chambers in the future. They’re keen and as good as the juniors. But there won’t ever be a substitute at the top end.’ The younger juniors predominantly receive instructions from the UK’s smaller law firms – so the likes of Lovells’ investments in solicitor advocacy does not hit the workflow. The vast majority of law firms don’t have armies of in-house advocates, and don’t aspire to. Some instructions come from commercial litigation firms that have no specialist intellectual property departments. Under those circumstances, the experience that the junior barristers have gleaned from their years in chambers is invaluable and cheap at the price. ‘There will be more
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competition we face from other sets of chambers.’ ‘It’s about different styles and skills,’ adds Berkeley. ‘Part of a solicitor’s job is to put together the best team for the case. From the client’s perspective, that can be a solicitor advocate or a barrister. Our aim is to provide a wide choice of trial and advocacy expertise so that solicitors keep coming back to use our service. If we maintain high standards, I hope we’ll continue to be valued by them.’
Value system
JAMES MELLOR, SILK STANDARD ‘I’m certainly curious to see what will happen with the silk review. There’s this perception that barristers’ fees go up when they take silk. They go up because they’re gaining experience. If they’re no good they won’t be able to sustain the fees. There’s a misconception about the whole process. Barristers do work in a competitive and transparent environment. There’s so much information about us available to firms, whether it’s through how the judges describe us in their judgments or through the directories.’
solicitor advocates in good time,’ comments Jonathan Hill, the youngest tenant and therefore the one with most to lose, ‘but I don’t see them as any different from the
Joining a law firm as an in-house set certainly doesn’t appeal at 8 New Square. ‘Our group dynamic would change. Even though we work together, we’re all independently minded,’ says Platts-Mills. John Baldwin QC remains unconvinced by the prospect of becoming an in-house trial lawyer, ‘I’d be reluctant to join the American ethos.’ The barristers don’t appear complacent, so much as genuinely happy to be doing what they’re doing, exactly where they’re doing it. Chambers’ growth is 100% organic – every tenant began their career through pupillage at 8 New Square, desperately hoping to be taken on. The idea of moving is incomprehensible. ‘The only circumstances under which I’d leave,’ says Mellor, ‘is to do something totally different and unrelated to the law.’ Which is exactly what junior tenant Nicholas Shea did when he left to travel the world and climb mountains in 1997.
For at least the last 20 years, patent and trademark agents have been allowed to contact chambers directly, but they only account for between 5%-6% of the total instructions received. The idea of competing with solicitors for direct access to clients meets with quizzically raised eyebrows, and Platts-Mills leaves little room for doubt on his view of ‘Bar Direct’. ‘Litigation needs solicitors,’ he says. ‘I see no prospect of these chambers conducting it. Our overheads would shoot up. We are advocates, and our preferred option is to work with solicitors rather than compete with them for direct instructions.’ Potentially the greatest threat, at least to the IP bar, lurks in government legislation, not the solicitors’ firms that do or don’t instruct them. The European Commission’s proposal for a central European patent court was meant to be agreed upon by member states before 1 May 2004. To date, there hasn’t even been an agreement on which language to use, let alone to what degree the UK model should be used in conjunction with the continental system, which is less based on advocacy. ‘A hybrid UK-continental court could rely much more heavily on paper submissions,’ comments Taylor Wessing’s Hodgson. ‘Without the necessity for the skills required for examination and cross-examination, the role of the advocate will still exist, but it certainly won’t be as important.’ ‘Will we still be around in 20 years’ time?’ muses Baldwin. ‘We’ll still be offering a product the public want – a quality service delivered on time. We have been doing it for a long time and we will continue to do so. The bottom line is, we believe we can keep it going.’ Simmons’ Jeremy Morton adds: ‘There will always be these types of IP specialists. Whether they are to be found at the Bar or in solicitors’ firms is neither here nor there. We’ll always use them if they provide value to the team.’ LB camilla.sutton@legalease.co.uk
‘We only deal with relatively small applications and trademark oppositions in-house. One day we’ll consider running our own cases, but not quite yet.’ Jeremy Morton, Simmons & Simmons June 2004 Legal Business 47