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this important topic.
A brief visit to any well-supplied library or Internet book site shows that
the topic of intellectual property continues to receive considerable attention.
This comes as no surprise, as innovative protected intellectual property can
be a real source of competitive advantage in a services firm. Reading options
include a variety of practice-oriented and socioeconomic perspectives in-
cluding local, state, and federal legislation with its current interpretation as
well as accounting for and the use of economic valuation for intellectual
property. Chapter 19 touches on this subject as well and has links to associ-
ated resources for additional study.


Understanding Intellectual Property 4
The origins of U.S. intellectual property law are traceable to the constitu-
tional convention of 1787 and the first draft of the constitution. The ration-
ale for this constitutional emphasis is the notion that the formation of a
prosperous society is, to a large extent, dependent on the ability of individu-
als to protect their rights in intellectual discoveries.
Four classifications of a firm™s intangible assets include rights that arise
from: (1) contractual agreements; (2) relationships with its workforce, cus-
tomers, and distributors; (3) undefined intangibles such as goodwill; and
(4) intellectual property. Smith and Parr state that intangible assets “. . .
typically appear last in the development of a business and disappear first in
its demise.”5
154 The Front Office: Driving Sales and Growth

The types of intellectual property are: patents, trademarks, copyright,
and know-how. Each of these types is brief ly outlined next. Readers in need
of a more comprehensive treatment are referred to texts similar to those
listed in the notes section at the end of this chapter.

Patent
• Right to exclude others from making, using, or selling
• Types (utility, plant, design, animal)
• Granted by the federal government

Trademark
• Types (trademark, service mark, collective marks, certification marks)
• Valid as long as the mark is actively used and protected
• May be registered (federal-interstate, state-intrastate)

Copyright
• Idea-expression dichotomy. Copyright law is based on the notion that
the expression of ideas is subject to protection, but the underlying idea
cannot be protected.
• Establishing ownership”employees. A “work made for hire” is owned
by the employer. Best to use written agreements for both employees and
independent contractors to reduce likelihood of ownership disputes.
• Federal protection only.
• Benefits of registration”provides public notice. It establishes a validity
of claim that is a prerequisite to bringing an infringement action. Creates
a record with the customs service.

Know-How
• Types (trade secrets, proprietary technology, and other information
used in the course of business such as customer lists, sales information,
business methods, and financial forecasts).
• Primarily subject to state jurisdiction.
• No statutory time limits on protection. Information that has not been
protected by patent, trademark, or copyright, but its protection is still
vital to the firm™s success and, if known to competitors, would provide
them with an advantage.
• Protection is through physical measures and written agreements.
• Computer software can be protected with patents or copyrights or may
be retained as part of a firm™s know-how.

Though some authors recognize a difference and distinguish between
intellectual capital and intellectual property, the names are often used
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Service Line and Intellectual Property Creation

interchangeably. Smith and Parr8 define intellectual capital as a combination
of human capital, intangible assets, and intellectual property. Within the
context of this definition, the remainder of this discussion focuses exclu-
sively on intellectual property.

Protecting Intellectual Property
Protecting intellectual property should be seen as a bidirectional process
that involves not only the protection of a person™s own property but also en-
sures that the person is not infringing on the rights of others.6
As shown in Exhibit 6.1, the protection of intellectual property is summa-
rized in four key activities: identify, raise awareness, protect, and monitor.
For each of these activities, a list of suggested strategies and steps follows.

IDENTIFY INTELLECTUAL PROPERTY. The emphasis of this activity is
defining what constitutes the firm™s intellectual property. Proactive identifi-
cation can help reduce the time and effort needed to later assert the firm™s
rights. Periodic audits can be used to inventory intellectual property with
special emphasis placed on computer data security. Consideration should be
given to obtaining outside assistance such as legal counsel. Chapter 19 covers
this topic as well.

RAISE AWARENESS. A key concern is the adequate demonstration of the
firm™s intent to protect its intellectual property.7 Intent can be a forceful in-
dication of the firm™s desire to assert its rights and may be demonstrated
with organizational attention in the form of oversight, policies, procedures,
and education. Periodic reviews and legal counsel are recommended, as
statutory changes can be frequent. Oversight is optimally provided by a com-
mittee of senior members from all areas of the firm including operations,
human resources, accounting, legal, sales, and marketing. Established firm
policies and procedures help to define and codify firm stances on informa-
tion confidentiality, Internet usage, ownership rights, and employee/contrac-
tor agreements such as nonsolicitation, nondisclosure, and noncompetition.
Employees should be educated on the proper use and protection of intellec-
tual assets. Also, Walsh recommends the firm validate that employee/
contractor agreements are appropriate for the work assignment, governing
jurisdiction and effects on existing agreements after business reorganizations
such as mergers and acquisitions. The firm should consider adopting em-
ployee exit processes that collect confidential and proprietary information
and use this opportunity to remind the individual of ongoing obligations.10

PROTECT AGAINST INFRINGEMENT. Once intellectual property has
been identified, it should be assessed for the optimal method of protection
(patent, trademark, copyright, and know-how). For property that is deemed
156 The Front Office: Driving Sales and Growth

suitable for know-how protection, one option is to control access. Trade se-
crets may be marked as confidential. The firm should consider obtaining in-
surance coverage for possible infringement claims made against the firm.

MONITOR. The final and perhaps most essential activity is to monitor the
behavior of your own staff as well as the actions of others. The firm™s staff
should be encouraged to review periodicals, marketing literature, web sites,
and other sources to check for infringement. Retaining legal counsel may
be required when infringement is perceived. The firm™s goal is to maintain
diligence in its practices and meet its secrecy objectives by demonstrating
an intention to protect its intellectual property and then backing its intent
with action.

Other Aids to Understanding Intellectual Property
In addition to intellectual property texts such as those discussed earlier, nu-
merous journals and texts address intellectual property issues. Topics recently
addressed by the Intellectual Property and Technology Law Journal 8 include:

• International developments such as foreign recognition of and coopera-
tion in protecting property rights and the links between international
property piracy and terrorism
• Effects of mergers on intellectual property rights
• Noteworthy court rulings that impact both the defense and assertion of
property rights
• Economic valuation of intellectual property
• Practice aid such as a sample agreement designed to help organizations
protect their intellectual property when working with contractors

Along with topical advice and guidance, various sources9 discuss contem-
porary as well as competing views on the current state and future direction
of intellectual property. Opinions range from the all-for-free knowledge ad-
vocates to those who argue for market rules to dictate ownership rights. The
interested reader is encouraged to explore the diversity of intellectual prop-
erty readings.


Summary
The professional services firm™s ability to increase and protect its knowledge
should be considered of paramount importance to its continued existence. In
a tangible way, its clients are paying the firm for the skilled use of knowledge.
As such, effort that is expended to create service lines, develop intellectual
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Service Line and Intellectual Property Creation

property, and subsequently protect it is inevitable. As Sherlock Holmes
points out, the skillful worker focuses on relevant knowledge, listens to oth-
ers™ troubles, provides enlightenment, and then pockets a fee. As Einstein
notes, the best firms will be sure that they have effective ways of “finding”
the information that they need when they need it.

RESOURCES
A list of suggested work steps for new service offering creation is provided on the
accompanying CD-ROM.
The US Patent and Trademark office provides a variety of on-line resources, includ-
ing search capabilities at http://www.uspto.gov.
The copyright office of the Library of Congress provides information, frequently
asked questions regarding registration for copyrighted works and is found at
http://www.copyright.gov.


NOTES
1. Sir Arthur Conan Doyle, The Original Illustrated “Strand” Sherlock Homes
(Great Britain: Wordsworth Editions, 1989), p. 15.
2. Gordon V. Smith and Russell L. Parr, Valuation of Intellectual Property and In-
tangible Assets (New York: John Wiley & Sons, 2000), p. 10.
3. Philip Kotler, Marketing Management. (Upper Saddle River: NJ: Prentice-Hall,
2000), p. 27.
4. Except where noted, material for this section has been adapted from Smith and
Parr. See note 2.
5. See note 2, p. 15.
6. Deborah E. Bouchoux, Protecting Your Company™s Intellectual Property: A
Practical Guide to Trademarks, Copyrights, Patents & Trade Secrets (New York:
AMACOM, 2001), p. 14.
7. Marguerite S. Walsh, “The Ten Top Reasons Employers Lose Trade Secret
Cases”And How To Prevent Them,” in Intellectual Property & Technology
Law Journal (New York: Aspen Law & Business, 2003), pp. 1“ 4.
8. Technology and Proprietary Rights Group of Weil, Gotshal & Manges LLP, ed.,
Intellectual Property & Technology Law Journal (New York: Aspen Law & Busi-
ness, 2000).
9. Jennifer Peloso, ed., Intellectual Property (New York: H.W. Wilson, 2003).
7
Proposal and Reference
Management
TIM BOURGEOIS


Services are invisible.Services are just promises that somebody will do something.How do you
sell that?
”Harry Beckwith, Selling the Invisible1




This chapter addresses the role of proposals in the professional services firm
business development cycle and how to manage the proposal development
process most effectively. When viewed as a stand-alone document, the pro-
posal is a straightforward item that can be 50 percent to 80 percent standard-
ized across most prospects, depending on the specific nature of the services
being pitched. However, when viewed as a component of a business develop-
ment process, the proposal and all of the steps that lead to it and follow its
submission are a complex system of interdependent actions that, when suc-
cessfully applied, lead to regular and predictable new business generation.
To that end, this chapter addresses:

• The role of the proposal: How proposals are used in the business devel-
opment process.
• Presenting proposals: Many sales processes begin with an opportunity
to provide an overview of your firm, which is essentially a phase one
proposal.
• Written proposals: The basics and nuances of developing a formal, writ-
ten proposal.
• Pricing and negotiating: How to price projects and negotiate effec-
tively once the proposal has been submitted.

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Proposal and Reference Management

• Follow-up and closing: How to manage the follow-up process and close
new business.
• Managing the proposal process: If not managed properly, firms can
waste hundreds or thousands of valuable hours on futile business devel-
opment activities.
• Complementary documents: Many related documents are used before,
during, and after the proposal submission.
• Keys to success: How to optimize your firm™s proposal development
process.

This chapter is organized similarly to the professional services business
development process outlined in Chapter 5: prospect identification, generat-
ing genuine prospect interest, identifying a specific need and solution, deliv-
ering a proposal, and managing the postsubmission process. This chapter also
consistently advocates a systems-based approach to managing the proposal
development process. Too often, professional services firms suffocate and
squander their precious resources because of ineffective business develop-
ment practices that involve virtually meaningless proposal submissions in sit-
uations where the likelihood of success is remote. This chapter provides a
foundation for avoiding that pitfall and creating a sound business develop-
ment system for your organization.


Why This Topic Is Important
Depending on the source you use, 50 percent to 90 percent of the $7 trillion
U.S. economy is service based. Manufacturing jobs continue to transition
offshore, and the United States has evolved into a mostly knowledge-based
economy. For example, IBM overhauled itself over the past 10 years and now
derives more than half of its $89 billion in sales directly through services ac-
tivities. Name a well-respected large company”GE, Citigroup, Wal-Mart,
and so on”and you can bet the organization has integrated an aggressive
services-based strategy into its plan over the past decade.
The service sector is booming, and that™s great news for anyone with a
knowledge-based offering. The bad news is that it™s very competitive. Harris
InfoSource estimates there are more than four million services firms in the
United States with 25 or more employees or 10 or more professional services

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