INDIAN LAW FIRMS

Breaking the Mould, Locking in Step

Talk to lawyers on the ground in India and many will say that hierarchy and obsession with status are rooted deep in the Indian psyche. Historically, Indian law firms’ structures bear witness to this. The traditional Indian law firm has long avoided adopting equitable remuneration structures, allowing their firms to be dominated by individuals or family members.

 

Rainmaker, the legal services provider, suggests that this ethos is changing. More than two thirds of their survey of 435 lawyers thought lockstep was the best remuneration model for Indian law firms – evidence of the growing frustration with the hierarchies prevalent in Indian corporate law firms.

 

The absence of equitable remuneration has been a big factor driving the dynanism of the Indian legal market. Without access to equity, talented young lawyers have started up new firms. For example, 15 of RSG’s top 50 law firms were formed in the last ten years.

 

Lockstep is seen in the West as promoting collegiality and increasing incentives to share knowledge, clients, and expertise. As the Indian legal market develops, firms are experimenting with Westernised systems of remuneration. Trilegal and Talwar Thakore & Associates have established authentic lockstep structures. Meanwhile the biggest firm in the Indian market by revenue, Amarchand & Mangaldas, has begun to experiment with a modified form of lockstep.

 

Berjis Desai, one of the founders of J Sagar Associates, who has instituted a modified lockstep of its own, is pessimistic about the progress in the Indian legal market. “It has been difficult to create institutions in India”, he says. “Egos in India are so high, and this means many are struggling to scale up”. But as the Indian economy internationalises, traditional Indian law firms may no longer be fit for purpose. Without a fair system of remuneration, growing credible law firms will be challenging.

 

Some in the new generation are evangelical about the benefits of more progressive pay systems. Trilegal’s founding partners have said that in instituting a lockstep, they wanted to make a difference in the Indian legal market as a whole.

 

Given the recent adoption of more equitable models, it looked as though they were succeeding. However, the tendency towards fragmentation and atomisation in the Indian legal market haunts even the more progressive firms. In late 2008, three key younger partners left Trilegal to start Phoenix Legal. The transition to more inclusive remuneration may have begun, but the end is far from sight.