The Curious Case of Patent Jobs

An article in my SSRN feed caught my eye this week: Where Have All the Patent Lawyers Gone? Long Time Passing... by Kenneth L. Port, Lucas Hjelle, and Molly Rose Litman (William Mitchell; Schwegman, Lundberg and Woessner; William Mitchell student).

The paper makes a pretty bold assertion - that the number of new patent lawyers is going to drop by 50% in the next three years. This is not necessarily surprising - after all, new law student enrollments are dropping. But not by 50%. Further, their prediction is not just conjecture or fancy econometrics - they look at the number of LSAT takers qualified to take the patent bar, and find that only 600 in the whole country were so qualified this year. Given that about 80% of qualified law students actually enter the patent bar, the numbers are looking to be south of 500 in 2018. By comparison, the number hovered between 800 and 1200 between 2003 and 2014.  So that's that. Then why is this a curious case?

There are two curiosities. Both are discussed in the paper, with the first more at length than the second. First, given growth in women in science and engineering, we should have been weeing more women patent lawyers and applicants. But, in fact, the paper finds that the percentage of men has been roughly stable. This means that, for whatever reason, women have not been as drawn to patent prosecution (you need not have a special degree to be a patent litigator, though it makes it harder to get that first job). It is unclear why a higher percentage of qualified women than men are turning away law school as an option.

This is tied to the second curiosity: patent law is one area where employment prospects are good* and are expected to remain so. The draft Article shows the growing number of patents, and despite patent reform that has reduced the value of patenting some, the number of applications continue to grow and have almost always been tied to growth in population as much as anything else.

In other words, there are jobs for patent lawyers, and we should expect growth or at least a less rapid decline in patent bar eligible students. I wish we had more students, because every year we have requests from employers that we can't fill. Of course, there's more competition for engineers now, too, so it's possible that young science and engineering grads can earn more on the open market. I don't know the answer to that.This site shows average starting engineering salaries at about $100k. Starting salaries for patent prosecutors is $75K to $95K with upper ranges in the $150K or more area for some, and more for prosecutor/litigator combos (which is most big firms). The long term upside may be much higher for lawyers, especially because that first job is easier to get.

Some critics will surely say that it's the crushing debt that holds people back, but if it is, then that's perception over reality. My experience is that math, science, and engineering folks do better on the LSAT, which means better scholarships somewhere, and ranking means just a little bit less if your very specialized career field is in demand - remember, we are talking about 500 students nationwide.

This leads us back to the curious case of women engineers. Given the many stories I read about how women engineers are mistreated in the workplace, I would think that an alternative career with time flexibility that is also potentially lucrative (though not without its own gender biases and glass ceilings) would be something to consider. Or at least to consider in equal proportions to undergraduate populations.

 

*I'll add a caveat here that it's harder to get a patent job in bio these days without a PhD, though most of my bio patent students were also employed by nine months after graduation.

 

Comments

[anon123]

But the students with the undergraduate degrees necessary to become patent lawyers have more opportunities outside of law, and are evidently considering them more attractive.

[Michael Risch]

anon123- that they are finding them more attractive is obvious. The part that fuels this post is that I'm not convinced that there are more or better opportunities outside of law. I showed some salary numbers, and they weren't all that different to start (and I think the lawyer numbers I report are low), and I think the long term upside for lawyers is much higher. Further, as the number drops, there will be fewer people to fill spots, which should drive up salaries. But I could be wrong, which is why I wonder about it - I'm happy to see data on it.

[Jimbino]

A degeed physicist, I was solicited by law firms in SF and DC before I even enrolled in law school. At the time I was earning so much as a freelance software engineer that I couldn't accept their offers. The truth is that software engineering on a contract basis is more lucrative, and less miserable, than working in law. As a result, I worked as a contract software engineer for decades, averaging some 38 weeks of (unpaid) vacation per year.

I once made the mistake of interviewing for a patent associate position for an Austin law firm. They were talking 2400 billable hours per year. It seems to me that you have to be over your head in childsupport payments to work so much.

[Michael Risch]

On the one hand, if you were being recruited before law school, I wonder if your freelancing income was an outlier. On the other hand, there's something to be said about not billing 2400 hours, and there is good money to be made, especially in software.

But there was plenty of money to be made in software during 2003-2007, and yet the rate of new patent lawyers grew. And there are lots of engineering fields that aren't software where such demand (and paydays) are not as prevalent.

I'm not saying one view or the other is right; I'm just saying that as patent litigation BOOMED beginning in 2009 and patenting has continued to grow, I'm hard pressed to see what changed in the non-law economy that made it so much more attractive, other than folks being down on law school generally.

[anecdata]

Interesting post and article. I am just speculating from prior experience in IP, but my recollection is that larger firms were jettisoning prosecution work a few years back because it is not nearly as lucrative as litigation--higher overhead for specialized support staff and much harder to recover for hours worked. Moreover, for very large firms that impose inflexible billing rate structures, it has been hard to keep bread-and-butter work from mid-size and small clients. Many boutique IP firms also hit major financial trouble during the downturn and some very esteemed ones folded (for example, Penny & Edmonds). So perhaps part of the issue is not lack of demand for patent work, but a lack of high-prestige, high-paying jobs that might attract qualified applicants to go to law school. In my experience, the most highly sought after candidates at the big and/or prestigious firms tended to have engineering or physical science PhDs (with some life scientists thrown in). Surely, others without those credentials still get great jobs, but perhaps at places that serve different market segments or sectors. If law seems like an uncertain bet for whatever reason, I would not find it in the least bit surprising that PhD-prepared scientists would elect to stay in science or business. Final comment - the markets for patent work are very discipline specific and regionally contingent. For example, Philadelphia firms used to see a lot of work from big pharma, but that has waned along with the industry's profile in the region. Coupled with the fact that many law schools have a regional profile, I think this makes for a very complicated problem. Among other things, I'm not certain that firms or clients see all patent-barred attorneys as interchangeable. For instance, (and excluding outlier polymaths) I would not hire a mechanical engineer to work on a composition patent for a pharmaceutical compound or a chemist to work on a software patent.

[anon]

patent prosecution is highly commoditized AND systemized work. It is very much like working on an assembly line. Electronic billing has tied each step in the patent process to a billing code with a fixed time and price. Most tasks are under an hour, many under ten minutes. So the attorney spends all day,every day completing small tasks, entering the codes to bill the task, and moving to the next task, 50 hours a week, every week. So patent law wants smart, ambitious and creative people, but the job is managed like patent lawyers are clerks. It may make sense that a smart young female engineer or scientist esp. with PhD level training and creativity says "no thank you".

[Michael Risch]

Thanks for the thoughtful comments, all. I tend to agree about pure prosecution work. There's a reason I never tried to become bar qualified.

But that science background is practically a requirement for entry level patent litigation, which IS paying more, and IS NOT piecemeal, and IS (or at least was) booming.

Perhaps there's just been more lateral hiring or redeployment within firms from other waning areas.

[Ted]

There is a glut of patent lawyers. There is also a significantly easier way to qualify (one that does not involve a staggering $150,000 debt): become a patent agent.

Outside of chemical engineering or electrical engineering, a job search for someone with 2-3 grated experience will take at least 9 months. That doesn't exactly suggest a dearth of patent lawyers. If you have a soft science BS degree, physics, chemistry, biology etc you may never get a first job.

[Michael Risch]

Ted - can you point me to the data on the hiring or the debt loads of patent lawyer graduates? As I note in the main post, I'm skeptical of the crushing debt argument given tuition discounting and scholarships for high LSATs.

As for overpopulation of patent lawyers, it would be helpful to review. The article estimates how much busier current patent lawyers will be if patent applications grow but patent lawyer rolls do not.

Lack of hiring is not consistent with what I've seen (outside of bio), but I'm skeptical of relying on my own intuitions as well. We heard from a physics major in these comments who was highly recruited, but that was a while ago.

For what it's worth, the article discusses patent agent trends as well. I don't get the sense that there's the upside of litigation work for those folks, so I suppose it depends in part on whether one wants the litigation type of lifestyle.

[Michael Risch]

I guess I should add on the debt load - it may not matter if there really is such a debt load, so long as applicants believe there is one!

[anon]

If this data is true, then this may be a sudden development or developing situation. The patent office keeps track of the number of applicants sitting for the registration exam http://www.uspto.gov/ip/boards/oed/exam/past/results/index.jsp
The data is current to 2014 and there is no drop off that matches the drop off in applicants to law school. The number of 2014 exam takers is (within expected deviation) the same as the numbers in 2005, 2006, 2007, 2010, 2011 and 2013. The patent office exam data suggests there has been a very consistent supply of patent agents/attorneys for the last 10 years, including last year, with a few bump ups in that supply from time to time. By the way, it also shows a pretty low pass rate on the exam!

[[M][@][c][K]]

It is fair to say that intellectual property may well be overpopulated at this point. Moreover, the level of STEM qualification that firms are looking for has been steadily rising, so that a BSc, BA (in STEM), or BEng is often not enough, with MSc, PhDs and other higher qualifications becoming increasingly common.

Another issue is that all STEM subjects are not equal in patent law - a civil engineering degree might allow you to qualify as a patent attorney, but it won't get you much work. Biochemistry and genetics graduates are popular right now, EE and Physics less so. Moreover, I think a lot of IP practices are concerned by recent Supreme Court decisions like Alice, Octane Fitness and others - certainly they have had a huge impact on the value of software patents.

Perhaps a bigger problem for IP law is the one that tends to attach to any "hot" area of legal practice. Washington DC is full of marginally employed ERISA specialists, former regulatory rate filing lawyers (remember when the Interstate Commerce Commission, Federal Maritime Commission and Civil Aeronautics Board, etc. were lucrative areas of practice.) Legal practice areas that are "hot" tend to get overpopulated, often with many outright grifters - everyone wants to have an IP department, until they don't.

[ipesq.]

I'm one of those rare, I'd say unicorns even, that was able to get an entry level IP litigation job without having a science background. I'm lucky that my boss was willing to take a chance on me. However, I work at a plaintiff side boutique ("small") firm and my pay is way under market. Since I have a couple years experience now, I have been looking for "greener pastures." To this point, I have found it impossible to lateral without having a science background. The market is that saturated. I know of lawyers with science backgrounds who would kill to even have my way underpaid position.

[Michael Risch]

anon - I think that's right, though I think they note the biggest drops in years out, not years past. But I note two things about the data: 1. it includes patent agents, which may be more stable, and 2. the high failure rate may mean that people retrying will keep the new patent lawyer rolls stable even if "new lawyers" decrease.

M-k - thoughtful comments, and I think generally on point, but still just anecdotal, as are ipesq's. If it's true, for example, that ipesq is an outlier without the science degree (as was I, by the way), then you would think the science degree should help. But you both seem to be saying not so much. I'm still on the fence and looking for actual data, which may just not be there (not that I've looked hard for it). Maybe the study authors can tackle that question next.

[[M][@][c][K]]

Michael:

The vast bulk of my practice is IP and technology law, albeit on the international side (both in private practice and as a GC.) What I have observed is relentless pressure on the cost of patent filing, a lot of competition for IP work, and after several decades, IP litigation that is flatish. New case law really is having an impact on the rate of patent cases being filed - some solid data is here:

http://www.corpcounsel.com/id=1202672763594/Fewer-Patent-Litigation-Filings-So-Far-in-2014?slreturn=20150120131915

Octane fitness can be expected to have a serious impact on troll litigation, which had risen to about ½ of all patent litigation, possibly more depending on how you count trolls, since the quality of their patents assertions would leave many exposed to attorney's fees under the Octane Fitness standard. What we are observing is a flight to quality in patent filings too - which will have an effect on large scale businesses which have been churning out thousands of dubious patents. Pretty well every IP practitioner I know thinks that IP is on the edge of major change.

[Michael Risch]

M-K - I agree with you on all of that. Indeed, I study the litigation trends for a living. I personally think Alice will have a greater effect than Octane Fitness, but it's definitely a 1-2 punch.

And so it may be rational for students to consider all this. But are they? Or is it a general law school malaise? Even if litigation is dropping, do we really expect demand to drop faster than other law jobs (which appear to be rising)?

On a side note, I'm not so down on IP generally - as the US economy moves to more information, IP becomes more important than ever. That said, as more people want to do it (or shift to it), it's harder to break in. I don't know, though, if there's a greater than average reduction of all IP students, or just patent bar eligible.

[[M][@][c][K]]

Alice is having a big impact, but that was because of the number of software patents and the extent of the troll litigation based on the. Octane Fitness is a broader decision, and I have defended a bunch of troll cases where attorneys' fees would most certainly have been mandated by Octane Fitness had it come down earlier. Remember Octane Fitness applies to all patent cases, not just software.

Inter alia, the other unknown quantity is the Unified Patent Court, assuming Godot now arrives and is in fact workable (and if you have read the proposed procedural rules, eek!)

[MR note: I don't want to take the comment thread in a whole other direction, so just noting here that Alice win rates are higher than post-Octane fee motions. I don't see it as a panacea, but we can have that discussion offline, if you'd like!]

[[M][@][c][K]]

MR there is not much point in going into it, but our decided impression is that patent holders are being much more cautious about filing litigation, which may be a good thing. Certainly, until last week I had not seen a seriously bull-shit case in a while (but yes I just saw one.)

[MR Note: Fair enough, and I agree that suit filing behavior is changing]

[[M][@][c][K]]

One thing I would mention is that there does seem to be a proportion of STEM students that we run into looking for internships while in undergraduate who are fairly clear that they plan on becoming patent attorneys when they graduate with their degree in STEM. This was in the past rather unusual.

I would note that the paths are complex - in the US the patent bar is a one off exam for which you can take a prep course - pass and you get your number. In most of the rest of the world patent attorney is a different career track to lawyer - though the EPO is becoming more liberal about what lawyers can do at the EPO. It takes years, a traineeship/apprenticeship/pupillage and multiple rounds of exams to qualify.

It is not unusual in the US to have both a number (i.e., a patent office number) and be a lawyer. By contrast in say the UK I think there are a total of six solicitors that are also patent attorneys and I don't think any are European patent attorneys - I can't think of any German Patent Attorney/Rechtsanwalt, no Benrishi/Bengoshi or anyone in France or the Netherlands who combined both (though I do know law firms which include patent attorneys and solicitors and bengoshi-benrishi.)

[Kevin]

Seems like a no-brainer to me. Kids get STEM degrees because they don't want to be lawyers . . . ever. I am sorry that is so hard for you lawyers to believe.