Introducing... Griffith Hack Consulting
Introducing... Griffith Hack Consulting - Griffith Hack
| 7 September 2011 | ||||||||||
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| The German author and philosopher Goethe once said, “He who moves not forward, goes backward”. It’s an outlook shared by many business and thought leaders today, including the team at Griffith Hack. Initiatives over the past year demonstrate growth is high on the radar. Even allowing for the firm’s culture of innovation and unparalleled client service, the latest development is set to truly differentiate Griffith Hack from its competitors: a groundbreaking consultant arm with a service offering that is the first of its kind offered by an intellectual property (IP) firm in Australia. Called Griffith Hack Consulting (GHC), this service will significantly enhance Griffith Hack’s ability to assist companies that conduct R&D in Australia to access the various Government incentives and grants available, particularly the new research and development (R&D) tax credit program enacted in July this year. The firm has welcomed two R&D industry stalwarts – Tracey Murray and David Mason – to launch the GHC service nationally. The pair have extensive expertise in the area, with more than 35 years of combined R&D tax, tax and IP experience across a wide spectrum of government, commerce and professional services environments. | ||||||||||
New Service Offering | ||||||||||
| According to Griffith Hack chairman, Tony Ward, the firm has always been cognisant of the need to offer additional services outside its core business. “Thus we set up Griffith Hack Consulting,” he says. “The success of this vehicle is very dependent on the drivers. We are confident that Tracey and David, with their contacts and experience, will cause rapid acceleration over the next six months. Clients look for value added services and now Griffith Hack can truly offer expertise in the R&D tax space.” The new duo is equally as pragmatic. “One of the things that has excited [the firm] is being able to offer a very distinctive and distinguishing service offering,” says Tracey. “No-one else is able to offer R&D expertise combined with patents, trade mark and legal expertise as part of a truly seamless process. So really, it’s a one-stop shop when it comes to grants and R&D tax concessions, and the ability to protect and exploit your IP.” | ||||||||||
| The idea evolved after a meeting with a client who was claiming the R&D tax concession, but was also seeking to patent the idea, as Tracey explains. “The development that [the client was] doing was so smart that we talked to them about whether they had thought about patenting it. At the client’s direction we organised a joint meeting where we gather information to prepare the R&D tax claim and a patent attorney gather information to lodge an innovation patent.” The penny dropped when the vast majority of questions David and Tracey asked the client, were the same questions the patent attorney asked. | ||||||||||
| “This made us aware of two important points,” continues Tracey. “Firstly, a number of clients probably weren’t optimising the value they received out of their investment in innovation (for example, by taking additional steps to protect and commercialise their IP) and, secondly, there are real efficiency gains available to companies by providing information to one firm and then for that firm to use the information to access a raft of financial and commercial rewards.” | ||||||||||
| Several recent updates to the R&D tax incentive program have made this new partnership more important than ever, as Tracey explains. “There have been some recent changes with the R&D tax credit and these changes are going to provide additional rewards to companies engaged in ‘research’ compared to the ‘development’ side of projects. This lends itself to clients who are doing activities that can be patented.” | ||||||||||
R&D tax credit opportunities | ||||||||||
| For those unfamiliar with what the R&D tax concessions are, David explains: “If you are undertaking R&D by, for example, developing new or improved products or processes, the government doesn’t make you pay as much tax on all the costs associated with designing, developing and trialling this.” Large companies with a $1 million R&D spend stand to receive a tax deduction of $100,000 while smaller companies could receive up to $450,000 cash back, based on the same $1 million R&D spend. So, how will the new service benefit clients? A major plus is that a company now has the ability to save a lot of time and resources, while protecting its IP and securing all available Government funding. | ||||||||||
| “Rather than spending time talking to their patent attorneys and then spending additional time and resources telling their R&D tax concession people the same information, Griffith Hack can offer an effective solutions as it is the only company with the expertise to offer these two services at once,” Tracey highlights. | ||||||||||
Driving Values from Limited Resources | ||||||||||
| A key focus is to work with clients to best position them to maximise the benefits under the new R&D tax credit program. Additionally, GHC will develop processes and strategies to obtain the maximum value from clients’ investment in innovation. “R&D is good for the country, but a lot of companies don’t spend as much on R&D as they should because of the technical risk of failure,” David says. “To address this issue, the government seeks to encourage companies to spend more on R&D by offering tax breaks if they do engage in R&D.” Interestingly, Australia is positioned 12th in terms of the level of R&D spend for Organisation for Economic Co-operation and Development (OECD) member countries. Tracey highlights that while Australia has an impressive track record in terms of developing new and novel products, internationally it holds very few patents when compared to the level of R&D conducted. This begs the question: why is Australia – with its abundance of world-class innovation – traditionally placed lower on the scale compared to other countries? “Historically, Australians have just gotten on with business – and we’re very good at doing that – but haven’t really thought ‘what other commercial advantages can I obtain with this?’” Tracey says. “The one thing that continues to surprise me,” adds David, “is that the large majority of our clients don’t realise that they are doing R&D – when you talk to them about R&D, they immediately think white coats and Bunsen burners, whereas a lot of their day-to-day activities, particularly in the manufacturing, mining or ‘blue collar’ industries, qualify as R&D from a taxation viewpoint. But again it goes back to Tracey’s point where they’re very smart but they just get on with it – they’ll come up with a very clever solution to overcome a specific problem but not think twice about it.” The pair is keen to address that gap and assist companies conducting R&D to be more strategic about how they’re spending their money. “And then [help them understand] how to exploit that spend by acknowledging that something’s able to be protected and then the next step will be that somebody will make money out of it,” says Tracey. The transition has been going smoothly. “The culture and the people at Griffith Hack are fantastic,” says David. “When we explain our area of expertise they automatically understand the synergies and that we can go to market as one, while offering a complete spectrum of services in terms of commercialising and exploiting the results of [clients’] R&D.” Tracey agrees. “There’s a real value for the client because it’s not just paying to get a patent done, which they’ve historically done, the same information they provide us enables them to lodge an R&D tax credit or concession claim and therefore they get money back through that whole process.” | ||||||||||
| Not only do eligible clients stand to receive a tax concession, a significant saving will result from Griffith Hack offering this holistic service. Tracey explains: “We have worked for companies who have spent $1 million annually on their portfolio of patents – those same companies spend in excess of $1 million on getting their R&D claims prepared by external accountants. So if you have the ability to provide the same information to the one firm, you have an opportunity to secure a high value service but at a materially reduced cost.” | ||||||||||
| “In addition,” David adds, “the R&D tax concession applies to all companies, and all industries; from a small start-up company consisting of one person operating out of his/her garage, right up to your top 200 ASX clients. Mining, Biotech, Agribusiness, Manufacturing, ICT and so on; the complete spectrum of industries. If you are working to improve the profitability and output of your company, chances are the Government will give you money.” | ||||||||||
Culture of Innovation | ||||||||||
| So, back to the Goethe quote and the spirit of ‘we cannot become what we need by remaining what we are’. “If we looked at ourselves, and said ‘we’ve always been a patent firm, so that’s all that we’re going to do’, then [we] are, in a way, going backwards,” David says. “So it’s a credit to Griffith Hack not only to encourage others to be innovative, but also being innovative in the services it is offering; thinking ‘right, what is the next natural step, how do we improve our service offering to benefit our clients?’” Tracey concludes: “‘Working with clever people’ which is the tagline for Griffith Hack – they’re applying their thought process to themselves and not just enabling their own clients to be innovative but really looking at what will help Griffith Hack be more innovative in the way they deliver services to clients.” Watch this space for further news and developments on Griffith Hack Consulting. In the meantime, David and Tracey will be presenting an upcoming R&D tax credit regime seminar for those in the life sciences industry. Click here for further details. | ||||||||||
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