• Coates’ new IP boutique, Coates IP, officially opened its doors last month
  • New boutique removes billable hours structure; aims to rethink traditional firm approach
  • Contends that flexible work environment can better accommodate in-house client needs

“I’ve had people tell me I’m crazy for doing it,” Stephen Coates quips when asked why he has moved from the comforts of an in-house role to the challenges of a law firm start-up.  However, as he tells WTR, he is now looking to leverage his corporate experience to create a new kind of law firm offering – for clients and colleagues.

Coates is best known for his time as senior counsel at Amazon and head of counsel for trademarks, domain names and marketing for Twitter. However, last month he launched Coates IP in a bid to create a boutique offering that will open up avenues for him and his colleagues to lead richer, more balanced lives, while still servicing clients, than other firms might provide. Step one was to revise what success looks like.

Coates notes that, while law firms tend to measure success by wins, win rates, billable hours, and expenditures, “in-house counsel looks at things very differently. They look at successes, but they’re also looking at success over time”.

For firms to adopt an approach more akin to that of their in-house clients, Coates believes a proactive, less profit-minded attitude is more beneficial than a reactive one. That may be a message that wouldn’t be welcomed in the traditional law firm environment, but Coates goes on to explain how it can work in practice.

“I’m not saying that law firms are terrible, but it’s not intuitive for them”

An example of proactive v reactive outlooks can be seen in the approach taken to enforcement. During the mobile app store boom, Coates had to deal with a proliferation of infringing apps. Whereas Facebook took down 10,000 apps in two years, Coates chose to approach the developers and partner with them: “Being proactive with developers saved money, time, and built a relationship that got the results I needed. I found that the number of infringements was being reduced by 50% each year by tracking that progress.” For Coates, this typifies the difference between the outside and in-house approach: “I’m not saying that law firms are terrible, but it’s not intuitive for them and solving problems like that doesn’t necessarily bring in money year on year. Eliminating problems doesn’t suit their business model.”

Of course, implementing such an approach in a law firm environment will require a new way of billing and Coates notes that his organisation  is doing away with the billable hours model. In doing so, he contends, you also gain an additional advantage: you can offer a more flexible work schedule, which allows you to tap into a wider talent pool. For example, high quality attorneys who can’t work over 35 hours a week because they have children or a parent to look after can still make sure their talents are going to good use. Coates is included in that group, being keen to spend more time with his family than his previous positions allowed: “You’re offering them flexible opportunities to work so they can have a richer life and our clients can get the best talent that I can find to match their problems.”

He is also betting on the model being a boon to the retention of talent – Coates pointing to the high attrition rate in the first few years at big firms. “They have an incredibly robust process for hiring, but they’re not retaining people. It’s not like they’re not paying them, those firms pay incredibly well. It’s that people are miserable. I think that’s something that’s really wrong with the legal industry. That can be fixed by offering interesting work in flexible ways.”

While, to be successful, such a working environment requires both canny management and a team of people that can be trusted to work together efficiently and remotely, Coates adds that the model can also eliminate workplace ‘noise’: “There’s no partners squabbling over work, and no marketing of the client to different practice areas. I don’t want any of that. Reduce the friction and offer more flexibility to the clients.”

Clients can be incredibly, and understandably, demanding. Statements about flexible working are all well and good, but when a client has a problem, it will rightly demand high levels of attention. Coates is under no illusions about this and explains that, before pitching to a client, he scouts out a team full of likeminded people. Then if the client bites, he’s already got a potential team ready to go. “If it comes in, I’ll offer the jobs. And then they can work at home, up a mountain; I don’t care.”

“You have to be a hustler”

One of the chief concerns one might have making the move from in-house to founding a private practice is client acquisition. In short, you go from being prey to hunter. For Coates, the fundamental building block to success is visibility and contact with peers and colleagues – crucially, though, more meaningful contact. He notes: “Offering people help with their problems and mentoring them is key.” Spreading a brand through attending conferences like INTA is a good strategy, but better is to use such events as a platform: “I speak pretty often, so people know who you are.” Ultimately, he acknowledges, “you have to have the full rounded experience and be a rainmaker to bring in clients, be able to scale, and build the business up. You have to be hustler and get the brand out there”.

Coates believes his varied career – including law firm experience at Kilpatrick Townsend – gives him an edge (“If someone was just the IP counsel at Coke and just did soft drinks for 8-9 years and not have that diverse experience with law firms, it might be harder for them to convince clients that they’re the right person”). However, he acknowledges that, even with that experience, potential clients are reacting with scepticism to his move: “One potential client was very upfront, saying they’ll wait and see.”

Coates is undeterred. He knows the difficulties that arise when seeking to change things while in-house – even when a client’s current firm is unsatisfactory, it takes time to move. However, while he waits for many pieces to fall into place, he is enjoying his newfound freedom: “I have kids and want to spend more time with them. I don’t mind working hard; I get up at four or five in the morning and start working. It’s about flexibility. Today, I’ve got a hike planned at three pm.”