Patent News 9

The Relentess Trend to Smaller Firms and Solo Practice

Patent News 9 - A Little Economic Philosophy

I am an unabashed Libertarian when it comes to economics. If you are not hang in here with me.

I had a wonderful career in a big business. And I owe much to that experience. A big company can give you many growth experiences. But I also later really enjoyed the life of a start-up company. In the final analysis though I believe that the heart of all viable economic systems is in small business. Small business is the major provider of jobs. Peter Drucker wrote not long ago that if you lumped the Fortune 500 companies together and looked at the employee count it has been dropping for decades. So where has the growth of jobs in the American economy come from? It is in small business. Not medium or large but small.

Another statistic I recently saw was that the top job provider is most economies around the world is businesses with less than 10 employees. Businesses with 10 or more but less than 20 employees comes in second, and those with 20 or more but less than 50 employees comes in third. Think about that.

One of the things that bothers me in watching (only occasionally) the economic pundits on the nightly news is their total focus on large companies and their hand-wringing worries when any large company slows in growth, loses any profitability, or horrors, has a layoff.

A fundamental fact of the U.S. economy that these pundits seemed to have missed for the last 40 years is that the U.S. economy has been steadily strengthening by transitioning the work force from big companies to mid-size and small companies - with an emphasis on small ones.

The fact of job losses in big companies is not news. It is an economic necessity for survival. The survivors have learned that it is most efficient to define what they do best and staff for that, then outsource the rest. When they outsource new jobs are created elsewhere. the work gets done more effectively, national productivity goes up, and everyone in the economy benefits.

I can already hear your objection. "But you are missing the human element - what about those workers in the large companies who just lost their job - it's not fair?"

We can talk about what you mean by fair later, but if you want to participate in the greatest economy in the world you have to be prepared to change not only jobs but careers multiple times. It is the nature of the beast.

Statists and technocrats want a planned economy in which everyone stays in the same safe jobs. Several hundred years of real experience shows that those types of economies maximize human misery. 

What does this have to do with patents?

Recent data on new registrants at the US Patent Office are backing this trend. This is data on the new patent agents (and attorneys) who have just passed the bar exam of the US Patent Office.

Examining the data from October of 2007 through June of 2008, about 42% of the total new agents/attorneys described themselves as unaffiliated with any organization. Therefore it assumed they will begin practice, or are already sole practitioners.

This percentage has been slowly growing over the years. The remainder are with law firms or corporations - mostly law firms.

In recent months (March - May 2009) these numbers have shifted to a majority of new registered patent agents and attorneys now being unaffiliated. This of course is bound to be related to the economic tailspin we are in.

My hunch though is that we will continue to see more patent agents and attorneys going solo or into very small firms. Once you are in that kind of practice and have developed a solid client list it would be rather numbing to go into a large law firm and its bureaucracy. (In my opinion).

An if you are a small businessperson looking for patent help?

Go with the small firm or solo practitioner. The service and attention will be much better. (Also my personal opinion).


Patent News 9 - Transitioning to Smaller
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Mike Ervin
Mike Ervin - Cost Effective Small Business Patent Protection.

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