Virtually all companies across sectors are under lockdown, which has pushed or deferred many contracts
There has been an increased demand for law firms as companies seek exits from contracts
Law firms have emerged as the outliers as India Inc and the top four audit firms are grappling with issues of appraisals cycles and paying out bonuses. All the top law firms—Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas, Khaitan and Co, Luthra and Luthra Partners, and Juris Corp—are proactively giving out bonuses to their associates and partners.
This is partially because of the increased demand for law firm for contract enforcements, increased complexities in conducting businesses as many employees are working remotely, seeking exits from contracts, and businesses continuity.
Virtually all companies across sectors are under lockdown till 14 April because of the covid-19 pandemic, which has pushed or deferred many contracts and forced employees to work from home.
Cyril Shroff, managing partner of Cyril Amarchand Mangaldas acknowledged next year will be challenging but said that they had fast tracked bonuses.
“We fast tracked our annual variable bonus to beat the lockdown . We wanted to stay true to our people first culture. They needed to be rewarded for the work. We have a complex assessment system for variable pay. So people were paid on merit. The homework was ready last month. Overall payouts were 5% above last year. We have been investing heavily in technology for many years and it’s held up well," said Shroff in an emailed response.
Shardul Amarchand Mangaldas also released variable bonuses to partners and associates as per schedule last week. “SAM & Co. released variable pay to all its lawyers, as scheduled and without any retention or reduction. In fact, despite the difficult times, most lawyers have achieved over 100% of their variable pay entitlements, with some lawyers even achieving 200%, something we are very proud of," said managing partner Pallavi Shroff.
Khaitan and Co credited March salaries ahead of its schedule. “The annual performance-linked bonuses for all our members, for the financial year 2019-20, will be paid out in full at the end of the month, as they are usually done. We also do not envisage any problem in the regular disbursement of salaries in the coming months. Our annual review of performance cycle for all members has also run according to schedule." said executive director Amar Sinhji.
However, not all law firms are faring equally well. Agarwal Law Associates announced a cut in fee-earner salaries of 30% for lawyers who earn over ₹40,000 per month, at least until 14 April. Agarwal Law majorly survives on litigation work in the apex court. As the courts are also in lockdown and are working for very limited hours, the earnings of litigation firms have gone down.