Mumbai: As their employers engage in a fierce battle for talent, top-level lawyers are raking in the big bucks as they are wooed with retention and discretion bonuses, faster options to become partners and better-than-usual pay hikes. India Inc.’s top law firms have even turned to consultants to overhaul their remuneration structures.
“There is a talent war going on in law firms as many law firm leaders are leaving and setting up boutique firms. As a result, there is a huge migration of talent,” said Deepan Dasgupta, human capital partner at Deloitte.
Dasgupta added that law firms are incentivizing their clients in two ways: the first is a faster path to partnership and the second is a more attractive incentive structure linked to performance.
“The path to partnership (especially non-equity partnership) is a great incentive for law firms to retain good talent. In addition to appointment, they can offer a significant jump in fixed remuneration and introduce a much more attractive bonus scheme,” said Dasgupta. Mint.
The war for talent is going on between Indus Law, Cyril Amarchand Mangaldas, JSA Advocates & Solicitors, Khaitan & Co, Trilegal, Shardul Amarchand Mangaldas & Co and even boutique firms set up by former senior partners of these law firms.
Why this sudden war for talent?
There are multiple reasons, including increased mergers and acquisitions, regulatory filings, expansion of smaller firms that need legal help to set up different businesses, among other things. As a result, senior partners are creating boutique firms and offering equity to former colleagues to leave more established practices and join their new ventures.
In addition, tax, risk and crisis management teams in law firms have increased over the past two years since the pandemic, which has also increased the demand for lawyers.
According to Vahura Consulting, a search and advisory firm for law firms, the top 10 firms have between 6,500 and 7,000 lawyers, and each firm recruits between 25 and 128 law graduates each year. Some of the leading university recruitment firms are Trilegal and Cyril Amarchand Mangaldas (CAM).
Desertion in this sector has been significant in recent months.
In law firms, there are two types of partners: shareholder partners and non-shareholder partners. The former bring in business and earn a share of the firm’s income, while the latter receive a fixed salary and a bonus. The latter are the target group for law firms.
The battle to retain or attract talent
“Talent retention is of the utmost importance in today’s highly competitive legal industry. Given the increasing competition, all law firms are working to attract and retain top talent,” said Avimukt Dar, Founding Partner of IndusLaw.
“There have been various approaches such as base salary increase, performance bonus, special/discretionary bonus and transparent equity model, which have been adopted by IndusLaw,” DAR said.
At the partner level, bonuses and compensation can be tied to both individual and company-wide achievements, including new customer acquisition, revenue achievement, or significant contributions to company growth and culture.
“A combination of flexible targets, performance bonus, discretionary bonus, credits for cross-referrals/attracting new clients and increased international business development opportunities for younger partners is what we are implementing to ensure that great lawyers do not feel like bad lawyers because of one bad year,” Dar added.
The Trilegal rival said Mint “It regularly consults with top advisors” on its remuneration. Parul Gupta, HR director at Trilegal, said that “some companies are changing their remuneration structures to bring them closer to Trilegal’s level.”
In July, JSA hired Nisha Kaur Uberoi, who headed the competition practice at Trilegal. Uberoi, who focuses on complex areas such as merger control, cartels, abuse of dominant position and the digital economy, brought with her two partners and 25 lawyers.
JSA also acquired Iqbal Khan and Ambarish, private equity (PE) and M&A partners of Shardul Amarchand Mangaldas, along with their team of 18-20 partners.
The turnover has led law firms to even consider the compensation offered to campus graduates. Shardul Amarchand Mangaldas reviewed the salaries of campus graduates. ₹16 lakh to ₹20 lakhs.
The desertion in this sector has been significant in recent months and the consulting firm Vahura had said Mint In July, the attrition rate among associates and senior associates is 25%. An associate and a senior associate can have between 1 and 9 years of experience and then gradually move into the role of partner.
Law firms have increased variable pay from 85-100% to 125% and some have gone as far as offering pay of 200%.
“Law firms have become more rigorous in terms of differentiating performance through quantitative metrics and even allowing partners to customize them to their strengths, becoming more business-driven rather than service-driven metrics,” Dasgupta said.
Meanwhile, other companies like Nishith Desai Associates used AI to ensure their employees’ expertise remained within the company and their departure did not require a rush to recruit a replacement.
“If we lose any talent from the company, the work they have done and the experience they have gained will be retained within the company. This transfer of knowledge avoids the immediate need and rush to hire and allows us to better reward our high-performing talent in the long term,” said company founder Nishith Desai.
He added that his boutique firm was lean and aimed at growth rather than scaling up. “We don’t think of compensation as a salary, we think of it as an investment in talent. And everyone from team leaders to office support staff is considered part of the team that is helping the firm grow. So we have a revenue sharing partnership with the entire firm where a certain percentage of the firm’s revenue is shared appropriately,” he said.
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