Most lawyers use valuations of one form or another. Research by Intangible Business carried out in May 2008 from leading UK lawyers, found that 98% and 97% of lawyers involved in disputes and non-contentious projects respectively find valuations either significant or very significant to their cases.

However, only 52% of lawyers claim they receive adequate support from valuers. 37% say they receive adequate support sometimes and 11% say they do not receive adequate support. Clearly, the use of valuation experts needs to be improved. If it was improved, the typical result could be much improved.

Below are five of the top findings coming out of our research, into how the use of valuation experts could be improved:

1. Use a specialist valuation expert for each asset class
Who else but an estate agent or surveyor would you use to value a house? Well, valuations from specialists, such as surveyors, are only seen to be used for land & buildings by 81% of lawyers, with accountants seen used for the rest. Specialist intellectual property valuers are only seen used by 69% of lawyers for IP valuations. This falls to only 51% when valuations of goodwill are seen.

2. Use an expert with industry knowledge and research capability
Lawyers named industry knowledge as the service provided by valuation experts as the one most needing improvement, by 29% of them. Accountants are often the default choice of valuer but can often omit valuable industry-specific, or research based knowledge.

3. Insist on thorough market research
All robust valuations should be underpinned by thorough market research, whether comparable transactions, customer perceptions or market data. However, market research was identified as the least useful service provided by valuation experts, by 57% of lawyers. As market research often supports valuations, this should be one of the most useful.

4. Focus on the deliverable: the written report
The valuation itself is found the most useful service and the one requiring the least improvement. However, the way the valuation is generally presented – in a written report – is the second most useful service (by 84% of lawyers) and also the service requiring the second most improvement (28% of lawyers). This clearly identifies the importance of the written report and importance of making sure it is delivered with sufficient quality and clarity.

5. Use valuations more frequently
Although valuations are seen and used frequently across the board by lawyers, their use is not at all common within individual case types. For instance, business, IP or share valuations are not used more than 50% of the time in any type of dispute. For M&A disputes they are only used 47% of the time, insolvency 45% and IP infringement only 9%. Use of valuations increases in non-contentious issues although its use is still markedly low; licensing only 63% of the time, IP management 44% and IP protection 41%. The value of what is in dispute or being dealt with should always be known to enable the response to be tailored appropriately.

Appling these five points is likely to result in a more useful valuation which should help achieve the client objectives better.

Find out more in our report, Valuation in Practice, below.