New Delhi: Once upon a time, legal practitioners in England were paid through voluntary contributions of a few guineas dropped into a small pouch attached to the back of their gowns. Even today, advocates in India sport the pouch as part of their traditional robe. But that is where the compensation comparison ends.
As the Indian government mulls opening the legal services sector to foreign law firms, a booming Indian economy and a spurt in demand for lawyers, especially business lawyers, has seen a sustained increase in
lawyers’ fees and salaries.
“Post-liberalization, companies are financially stronger, commercial deals are looking different since stakes are higher,” says Anand Prasad, founding partner of Trilegal, New Delhi. “Today, most corporate representatives turn up at the negotiating table with a lawyer.”
Not surprising, given the frenetic pace of mergers and acquisitions, private equity plac-ements, initial public offerings, big-ticket foreign direct investment deals and forging of new joint ventures—all of which require legal advice, especially in the context of India’s still complicated, and sometimes convoluted, multiple laws.
Most law firms that Mint talked to were quite reluctant to discuss their annual revenues. But a cross-section of lawyers across medium and large corporate legal advisory firms, defined by the number of partners and associates, generally said the hourly rates for a junior associate at a corporate law firm would average Rs3,000-6,000, while for a senior associate it could vary between Rs6,000 and Rs10,000. This is double of what they charged a decade ago. Over the same period, cost of advice from partners of law firms has risen similarly, from Rs3,000-8,000 per hour to Rs9,000-16,000, with significant exceptions for specialists and hot-shot names.
Meanwhile, the typical difference in fees that Indian lawyers used to charge for domestic clients and international clients is starting to disappear.
“The difference between rates charged to domestic and international clients is gradually narrowing,” says Som Mandal, partner at Fox Mandal Little, India’s largest law firm with 300 lawyers and 50 partners.
Sanjay Asher, senior equity partner at full-service legal firm Crawford Bayley in Mumbai, also believes that the legal sector is moving to harmonize rates in part because while “business needs that drive corporate law practice are changing, the work done for Indian clients and foreign clients is the same”.
International clients, meanwhile, say they still find professional fees charged in India relatively cheaper compared with the West. They add that they appreciate the multi-tasking abilities of many Indian lawyers compared with their peers in, say, the US, where the trend is more towards super specialization in limited areas of law. Often, in deals involving India, the value-add tends to come from the Indian side largely because of the plethora of regulatory issues in India.