What corporations want: industry knowledge

New data shows that external advisors who can demonstrate proven experience in solving sector-specific problems are much more likely to attract new clients than their colleagues.

According to a survey of nearly 29,000 in-house advisors managing IP+ and its sister brands IFLR+ and ITR+, in-house IP advisors highly value external advisors who can demonstrate a deep understanding of a client’s industry.

Of those who responded to the survey, 96% said that the industry expertise of a potential external advisor was important or very important to them. For respondents to the “IP+ Management” survey, the results are identical.

It’s understandable why industry knowledge is a must for a corporate advisor.

As the general counsel of a U.S. manufacturing company noted, the company wants its external advisors to help it grow by connecting them with other organizations, and this is only possible if the external advisor has a strong contact base in the relevant industry.

Industry knowledge trumps many other factors when vetting a new company, said a Seattle-based legal consultant for a food and beverage company.

“An external advisor who knows the market and speaks the same business language would be quite beneficial to the internal team.”

In-house IP counsel outside the United States also has a similar approach to sector knowledge.

Pankaj Aseri, Novartis’ director of anti-counterfeit medicines for India and Southeast Asia, noted that understanding the ins and outs of regulation is a big deal in the pharmaceutical world.

“Having an advisor who already knows his stuff saves us time, ensures we’re always on the right side of the law, and allows us to focus on our innovative work for patients.

“As we are always pushing the boundaries in healthcare, having advisors who connect with our industry means we can stay ahead while remaining compliant. It’s like having a trusted guide who knows all the shortcuts on a challenging journey,” he said.

Internal advisors clearly believe that industry knowledge is a critical factor when selecting a new business, so practitioners looking to acquire new business must work to acquire the necessary expertise.

Regional

Industry knowledge is very high on the priority lists of internal advisors in all regions when hiring external advisors.

Nearly all respondents in the Americas, APAC and EMEA said a potential external advisor’s industry expertise would influence their hiring decision.

Advisors in the APAC region showed the greatest interest in whether their external advisors had strong industry expertise, with 97% of respondents rating it as important or very important.

Countries in the Americas were not far behind, with 96% rating it as important, followed by EMEA (95%).

Across the regions surveyed, the Governing IP+ study revealed that internal advisors prefer sector knowledge, regardless of where they are based.

Of those who rated industry knowledge as important or very important, Americans came first, with 97% preferring such expertise. EMEA and APAC follow closely behind with 96% and 95% respectively.

Overall, high percentage points across the board indicate that IP advisors in all regions value industry expertise similarly.

Across all brands, the Asia-Pacific region had the highest average score of 91.8%, with the Americas following closely behind at 91.6%. The EMEA region came in last place with an average score of 90.8%.

Global revenues

The study, conducted across income brackets, found that the interest in sector knowledge remains approximately the same across companies with different earning potential.

Companies with the highest revenues showed the greatest interest in the industry knowledge of an external advisor – 96% of survey participants answered that it was important or very important to them.

Corporations in all other revenue segments showed similar levels of interest, with 95% of respondents in each category preferring industry knowledge.

Data shows that external advisors with significant industry expertise are in high demand across corporations.

The “Managing IP+” study showed similar results to the broader study.

Companies from the two highest revenue brackets showed the greatest interest in industry knowledge.

Among companies with revenues between $500 million and $4.99 billion and those with revenues exceeding $5 billion, 97% and 96% of respondents, respectively, rated industry knowledge as important or very important.

On the other hand, companies in the two lowest-earning segments showed slightly lower but similar levels of interest, with 95% highlighting this option as something they would consider.

The high percentage points in all cases demonstrate that most companies, regardless of their earnings power, highly value whether a potential external advisor has industry-related expertise.

Overall, companies across all revenue segments had fairly similar average performance across all brands. The best places were taken by companies from the bottom two earnings brackets, with an average result of 90.9%.

Industry

From the industry perspective, the following sectors expressed the greatest interest in the industry knowledge of a potential advisor: energy and public utilities, and real estate and construction – 98% of respondents described it as important or very important.

The financial services sector also highly values ​​industry knowledge – 97% of participants described it as important.

Over 90% of respondents from almost all industries rated industry knowledge as important or very important, meaning that external advisors with this knowledge are attractive to most internal advisors, regardless of where they work.

Overall, across all brands, the energy and utilities industry expressed the greatest interest, with an average score of 94%. The financial services sector was not far behind at 93.3%.

Exercise area

When it comes to practice areas, life sciences advisors seem most concerned about whether their external advisors have strong industry knowledge, with 97% of respondents saying this is important or very important.

In-house advisors in all other practice areas also showed very high levels of interest, ranging from 93% to 96%.

In terms of average results, participants in the life sciences study showed the greatest interest – 95.9%.

Methodology

As part of our primary research with in-house counsel, we ask them to evaluate a number of characteristics and their importance in their decision-making when selecting outside counsel.

We aggregated responses from our 2022 and 2023 practice area-specific surveys and then analyzed the results in this series of reports. The data highlights the extent to which in-house counsel’s views on these attributes vary across industries, regions, revenue sizes and practice areas.

In total, over two years, we analyzed responses from over 25,000 respondents involved in internal consulting.

To read the previous installment of What Corporations Want, click here.