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Intangible Business, one of the world’s leading intellectual property (IP) experts, has today published exclusive research into how lawyers use valuations – a pivotal but previously relatively unknown market. This is the first time the usage of valuations in cases such as acquisitions, flotations and disputes has been researched. Over 50 leading lawyers, specialising in corporate, litigation and IP were surveyed from over 40 of the UK’s biggest firms. Key findings include:

• IP is the business asset which is most frequently seen valued, by 68% of lawyers
• The average typical claim recovery is 54%
• 98% of lawyers find valuations significant or very significant to disputes

The report, ‘Valuation in Practice’, sheds light on how valuations are used in the legal industry, what is valued, how important they are and how valuation providers can improve. IP often underpins business value. For example, when Cadbury reported its £38m acquisition of Green & Black’s, 84% of the deal was attributed to intangible assets. However, this research found that goodwill was seen valued most frequently, yet the least understood and the least valued by a specialist firm. This presents an opportunity for lawyers to improve their level of service to clients and uncover hidden value.

In addition, the report highlights a number of positive elements; valuations are the most useful part of the service provided and require the least improvement; 65% of lawyers think the significance of IP in disputes will increase; and 75% of lawyers think the significance of IP in non-contentious issues will increase in the future.

Thayne Forbes, joint managing director of Intangible Business, says: “The majority of business value is often in the IP, so it is encouraging that lawyers see IP valued so frequently. What is also encouraging is that 65% of lawyers see this increasing in the future.” Forbes added: “However, claim recovery rates are still low, IP is seen to occupy only 34% on average of most deal values, and although goodwill is seen valued more than any other type of IP it is the least understood. With more use of specialist IP valuation firms this should change, boosting overall value to the client.”