This week on IPWatchdog Unleashed, I spoke again with Fran Cruz, Senior Vice President of IP Solutions for Juristat. Our conversation was about a topic that should be top of mind for every patent prosecution firm, every in-house IP department, and every legal operations professional trying to make sense of the current market for patent related legal work. Where is patent prosecution work going, when does work move from firm to firm, when it move where is it moving, and what will firms have to do to win—or keep—the patent preparation and prosecution work?

The Market Question: Where Is Patent Prosecution Work Going?

The conversation started with a thesis that I expected the data to confirm. As I said to Fran, “this is the era of the boutique.” That was my instinct going into the discussion at least. IP boutiques, after all, ought to have the advantage in a market where in-house teams are under sustained cost pressure but still need serious technical and legal capability. A well-run boutique can often deliver high-quality prosecution at a much lower price point than a full-service Am Law 100 or Am Law 200 firm. That does not mean large firms cannot do the work well. But the economics are different, and in a flat-fee prosecution environment, the legacy cost structure of large general-service firms is becoming increasingly difficult to defend.

Fran’s data, however, told a more nuanced story. She looked at top patent-filing assignees and compared prosecution-volume trends across IP boutiques and Am Law firms. The most important takeaway was not a simple “boutiques are winning” headline. As Fran put it, “the dominant pattern is actually more towards stability.” In other words, large patent filers are not wholesale abandoning one category of firm for another. They are consolidating work around the firms already inside their ecosystem that are producing the best results.

Client Consolidation Is the Real Market Movement

The battle is not merely patent boutique versus Big Law. The real contest is performance versus underperformance inside existing outside counsel rosters. Companies that already favor boutiques are often sending more work to boutiques. Companies that are already Am Law-heavy may continue to move more work to Am Law firms. But in both cases, the decision point is becoming more rigorous and more quantitative.

Fran explained that in-house teams are now under substantial pressure to reduce patent budgets, often in the range of 10% to 20%. That pressure shows up in multiple ways: aggressive maintenance-fee pruning, reduced outside counsel spend, pressure on flat fees, and a move away from sprawling outside counsel rosters. The old model—fifteen firms receiving work largely because they always have—is not the future. In-house teams are increasingly asking which firms deliver the best results in the specific technology areas that matter most to the business.

Metrics Beyond the Allowance Rate Matter

A generic allowance-rate comparison is not enough. A firm with a strong overall allowance rate may not be the right answer for a software company dealing with Section 101 issues, or a life sciences company prosecuting claims in a strategically indispensable platform technology. The relevant question is more granular: in this CPC class, before these examiners, on these rejection types, with these business constraints, who delivers the strongest outcome at the best cost?

As I pointed out during our conversation, top-level metrics can be misleading. Some art units are high-allowance environments. Others are brutal. Some patents are mission-critical assets. Others are defensive filings, employee-recognition filings, or portfolio fillers. Treating all prosecution work as though it has the same strategic value is a mistake. Treating all “quality” as though it has the same business importance is an even bigger mistake.

Patent attorneys like to believe quality matters in every case, above all else. It does not. Quality matters when the client needs quality. Speed matters when the client needs speed. Cost matters when the client needs cost control. The sophisticated firm understands the difference and has the conversation early. The unsophisticated firm assumes every client wants the same thing and then wonders why work starts moving elsewhere.

The Two-Office-Action Warning Sign

One of the most striking parts of Fran’s analysis involved prosecution efficiency. The data suggested a meaningful threshold around two office actions. Firms that regularly required more than two office actions to reach allowance were at greater risk of losing volume. That does not mean every application can or should be resolved within two office actions. Patent prosecution is not assembly-line work, and complex inventions sometimes require longer engagement with the Office. But the trend is unmistakable: companies are watching efficiency metrics closely and if you are consistently over two office actions you will lose work, at least when you work for the top 50 filers that Fran looked at in this study.

We constantly hear that corporate clients of all sizes are willing to pay less and less, so it was and still remains surprising given the constant cost pressures that there hasn’t been a whole-scale abandonment of Am Law first for patent preparation and prosecution. But perhaps what Fran has uncovered explains some of the intense cost pressure facing the patent preparation and prosecution industry. Specifically, it would appear corporate clients know they need to spend and they do not want junk patents, but they also do not want waste. They do not want endless prosecution drift. They do not want outside counsel reflexively arguing without amending or reflexively amending without strategy. They want compact prosecution that moves the ball forward. They want outside counsel who understand when a case is worth fighting for and when it is time to stop throwing good money after bad.

Quality Alone Is Not a Business Development Strategy

Fran made the point directly: “quality alone is not enough.” That sentence should be taped to the monitor of every patent prosecution partner who thinks technical excellence, standing alone, will keep the work. In this market, quality must be paired with cost efficiency, responsiveness, and a clear articulation of value. Firms need to show clients not only that they can obtain patents, but that they can obtain the right patents, faster, with fewer unnecessary procedural steps, and with a prosecution strategy aligned to business objectives.

This is where data and AI enter the picture in a practical way. Fran described how Juristat data can now be pushed into tools like Claude, ChatGPT, and Copilot to help firms identify target assignees, evaluate prosecution performance, model cost savings, and build pitch decks in minutes. This is the future of business development for patent firms, and it will require changes. Patent firms have historically struggled with sales because many lawyers do not think of themselves as salespeople. But the market no longer rewards generic credentials and soft relationship pitches. It rewards insight.

The Best Pitch Teaches the Client Something

The best pitch today is not, “We would like to tell you about our firm.” To be frank, once you’ve reached the institutional threshold to have the capacity to do the work needed nobody cares about the firm—firms and fungible. The best pitch goes something like this: “We analyzed your portfolio and found three places where you are spending more than you need to, getting fewer patents than you should, or underperforming in a technology area that matters to your business.” That type of opening salvo provokes a very different conversation.

I also explained that AI is useful not because it is magic, but because it is good at language, compression, and iteration. Lawyers are wordy, which leads to unnecessarily long pitch decks and emails that do not focus on what clients want to hear. Business development copy written by lawyers often reads like it was drafted for the purpose of not saying anything memorable. AI can help sharpen that. It can stress-test whether the message lands, and what message you are actually sending. It can help translate prosecution metrics into business language that a chief IP counsel, general counsel, or legal operations executive will be able to absorb—using language that reaches them and breaks through.

The broader business development lesson is straightforward. Firms need to teach clients something they do not already know. In-house teams are busy, understaffed, and under pressure. Many do not have time to mine their own portfolios for hidden inefficiencies let alone know how they compare with major competitors and emerging threats. Outside counsel that can surface those insights become strategic partners. Outside counsel that merely ask for work become noise that is easy to tune out.

The Bottom Line: Prove Why You Belong

The bottom line from our conversation is that patent prosecution is becoming more operationalized, more data-driven, and less forgiving. Firms that already have major clients cannot assume those relationships are permanent. Firms trying to break in cannot assume a good reputation will be enough. The winners will be those that combine prosecution competence with data fluency, business judgment, targeted messaging, and the ability to demonstrate value in terms clients actually care about.

For in-house teams, the mandate is equally clear: know what you value, measure what matters, and avoid turning efficiency metrics into blunt instruments. For outside counsel, the mandate is even clearer: understand where you fit, prove why you belong, and stop pitching like it is 2015. The prosecution market is not collapsing, but it is evolving. And those who can prove they are the “best bang for your buck” firm will have the inside track.

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