Pricing of Services: A Methodological Approach for Intellectual Property Practices
“Many professional services firms put more creativity, mind power and time into a brochure or an advertisement than thinking about pricing policies. This is a serious mistake, [as]pricing is how the firm captures the value it provides to the market place.”
Ronald Baker, Professional’s Guide to Value Pricing, 2001
The price, together with the client’s service experience with the firm, is one of the most important statements that an IP practice can make about its brand to its market and about its value proposition to its clients. It is therefore important that IP practices approach pricing from a strategic perspective. This article provides a structured roadmap for IP practices to develop their pricing approaches.
DUAL BUSINESS MODEL IN IP PRACTICES
Intellectual property practices typically house two separate businesses: IP prosecution and maintenance of IP rights
To provide true value to the client, an IP prosecution practice requires extensive technical, industry and legal expertise to effect, for instance, a valid patent application that is sufficiently specific to render an idea patentable while maintaining sufficient breadth to cover as many potential competing ideas as possible so as to protect the client’s business. The heavy intellectual lifting is done in this part of the business, and traditionally this work is charged on an hourly basis.