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Spreading bests: Salary ranges of lawyers at tier 1 and 2 corporate firms (Graphic: Ahmed Raza Khan/Mint)Spreading bests: Salary ranges of lawyers at tier 1 and 2 corporate firms (Graphic: Ahmed Raza Khan/Mint)

Exclusive: The second part of Legally India’s salary survey analysis is out in print in Mint today, and coupled with personal interviews and additional research, revealed huge discrepancies between salaries even within the same firm at the more senior levels. (Click here to read the first part, which covers associate satisfaction, mobility and more).

An online survey of more than 400 law firm lawyers and interviews with over 30 lawyers conducted by legal industry website Legally India in early 2012 has disclosed that lawyers with seven years of experience at leading corporate law firms could earn between Rs 22 lakh ($40,000) and Rs 55 lakh ($100,000) a year, but that there are large pay scale gaps and little transparency even within the same firm.

At law firms such as the Mumbai and Delhi offices of Amarchand Mangaldas Suresh A Shroff and Co., J Sagar Associates (JSA), Khaitan and Co., Luthra and Luthra, S&R Associates and Trilegal, or of AZB and Partners in Mumbai, lawyers can get paid the most coming straight out of college: This would start at a base salary package of around Rs.10 lakh per year, going up to between Rs 12 lakh and Rs 15 lakh per year, including the bonus component, as reported in Mint last year.

On average, total compensation, including bonuses, in this top tier of paymasters would then increase by around 10% year-on-year until a lawyer has four years of post-qualification experience (PQE).

By the fifth and sixth years of PQE, total compensation would go up by an average of around 20% each year across these firms, increasing yet again by more than 30% on average to seven years of PQE. For the very top performers at the six- to seven-year levels, the maximum total remuneration can even have increased by as much as 44%.

This would translate to a total package of Rs 55 lakh per year, which would be a base remuneration of around Rs 36 lakh per year, and a bonus of up to Rs 19 lakh. And occasionally there are outliers even beyond those limits.

Within tier 1

Some associates at AZB Mumbai, Amarchand and S&R can be at the top end of that range. At AZB Mumbai, for example, associates’ salaries for the first three years increase between 15% and 25% plus up to around two months of salary paid as a bonus. But after that level, all bets are off about standard ranges, and income will fluctuate widely between lawyers.

While job mobility of lawyers has continued increasing, most lawyers have very little idea how much they could earn elsewhere. Many law firms have reasons to prefer keeping it that way.

AZB associates also receive 7% of the first bill for a new client they introduce to the firm. The actual bonus amounts, however, appear to be nearly entirely discretionary and subject to the whims of the senior partners, sometimes even acting as an ad hoc reward, said respondents.

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Amarchand similarly tends to compete aggressively on salaries at the top end, but lawyers have complained that the system is still impossible to understand. “No transparency about how much I earn or what are my projected earnings; I can never predict bonus amount as it is never linked to performance,” one Amarchand associate said in his response to the survey.

Surprisingly, S&R, which is far smaller than any of its other rivals in the same tier, is actually at the undisputed top of the pay pyramid, with base remuneration exceeding all others, as well as potentially huge bonuses.

Within the tier, Trilegal is also offering total packages that are near the top of the market, while according to survey data JSA, Luthra and Khaitan tended to offer slightly lower base packages than Amarchand and AZB at the five-year level of PQE. However, Khaitan and JSA, for example, also offered some of the largest bonuses out there: at five years of PQE level, JSA and Khaitan’s base package could be up to roughly Rs 22 lakh, while the bonus might be another additional 70% of that, according to survey responses.

At Luthra, individuals’ bonus payments tended to be a little lower on average last year. The firm has a system where each partner negotiates for their total bonus pool with the firm’s management, which they, in turn, have to allocate between their team.

“God (or may be the firm!) knows the criteria for determining the bonus,” wrote one survey respondent who is working at Luthra, and two other associates interviewed agreed that there was not much transparency about how bonus amounts were calculated at the firm, although some teams’ partners set out bonus targets more clearly.

Two tiered

At firms that are in the second tier, according to the salary they pay—such as Argus Partners, AZB’s Delhi office, Desai and Diwanji, Nishith Desai Associates and Wadia Ghandy—remuneration rises more steadily on average.

Typical starting remuneration, including bonuses, generally vary between Rs 9 lakh and Rs 11 lakh at these firms, but that then increases by around 15% every year until PQE five- and six-year levels. At five-six years of PQE, the increments are almost 20% on average and into year seven, the hike is around 25% on average.

Designated older

Designations are usually bestowed at firms alongside the salary increases. At Amarchand, Luthra and Khaitan, for example, senior associate status is usually endowed after year four or five, while the principal associate tag at Amarchand comes around year six-seven for most.

However, at most firms this system is also discretionary or based on performance, and neither advancement nor bonus amounts are guaranteed.

“Lawyers at five-year (PQE) level are in the sweet spot, we want to retain them,” explained one senior partner at a large Mumbai firm about career progression and salaries, who did not want to be named.

Those lawyers have enough experience to be able to work relatively unsupervised, said the partner, and manage their own teams of younger associates. This meant that they are also the drivers of a large part of fees generated by the firms for clients, and are on the cusp of the path to the even more lucrative principal associate level.

Losing a senior associate is, therefore, an expensive affair, which explains the wide range in remuneration that starts opening up. At that level and above, salaries are almost always individually negotiated at most firms surveyed, leading to large disparities and a lack of transparency even in the same organization.

The rat race?

There is a series of famous experiments conducted by Harvard behavioural psychologist B.F. Skinner about a rat in a box, with a lever that delivered food to the rat when pressed. In one set-up, a fixed number of lever presses would produce food for the rat every time. Here the rat would stop working the lever once the food stopped coming out of the machine.

But under an alternative set-up, the rat was given food after a randomized number of lever presses, making it akin to gambling on a slot machine. That rat would work the lever harder than the rat in the predictable box, and crucially that rat would also continue working the lever frantically even after food stopped coming out of the machine at all.

The parallels to bonus structures in companies and especially law firms are obvious and often drawn. While associates may all gripe about not being able to predict how much they will earn in this year’s bonus, the unpredictability of the situation often means that associates will work as hard as humanly possible in the hope that this might be enough to earn the maximum possible bonus.

A fair few burn out along the way, of course, and, according to Legally India satisfaction survey data published in Mint last year, only 15% saw themselves remaining in the same law firm three years from now—no matter what the pay hikes will be.

LI and Mint, together every fortnightLI and Mint, together every fortnightGender differential?

Interestingly, the surveyed sample data did not clearly back the existence of overt gender discrimination, although roughly three times as many male lawyers responded to the survey as female lawyers, which is indicative of a gender imbalance in the legal profession as a whole that gets more pronounced with seniority, according to response rates.

In the first four years at law firms, the survey data did not disclose any statistically discernible differences in the salaries earned between men and women in top tier corporate law firms, but there was not enough data available at the more senior levels to allow making significant conclusions.

And although just over 20% of surveyed women working in law firms said they strongly agreed that the “legal profession had barriers that prevented women succeeding”, around 80% of women did not agree with this view. Among men, 90% did not agree with the statement that women faced barriers, although 10% strongly agreed.

This article first appeared in Mint. Legally India has an exclusive content partnership with Mint, which will feature the latest legal news and analysis every fortnight on Fridays in its print and web editions.

Note on methodology and data: First of all, a massive big thank you to everyone who participated in the survey and apologies for the long delay in publishing the analysis of the data. Unfortunately, contrary to initial hopes, even 400+ responses were not enough to give an authoritative picture of salaries at all levels within firms and tiers, which vary greatly, without compromising respondents’ anonymity and confidentiality.

To that end we interviewed more than 30 associates at law firms to get clearer data, but even so we were only able to come up with a nearly complete picture at most seniority levels for around two firms. We are evaluating how to publish this and hope to make further insight from the survey available to readers and survey participants soon, including general trends data on litigation and in-house.

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1
 
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Recommend! +0 Objection! -0 Lex 2012-11-23 13:46
Which tier does Lexygen fall into and how much do they pay :p
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1.1
 
Recommend! +4 Objection! -0 Desai 2012-11-23 14:46
I know lawyers who have joined Desai this year as freshers and the base pay offered is 4.8 Lakhs (its confirmed). Including bonus it is highly unlikely that the total package would cross 6 or 7 lakhs.

Kian, you may want to check with them.
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1.1.1
 
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Recommend! +3 Objection! -1 Diwanji 2012-11-23 17:13
Quoting Desai:
I know lawyers who have joined Desai this year as freshers and the base pay offered is 4.8 Lakhs (its confirmed). Including bonus it is highly unlikely that the total package would cross 6 or 7 lakhs.

Kian, you may want to check with them.

Desai pays the best salary among Tier I law firms
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1.1.1.1
 
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Recommend! +0 Objection! -0 Confident 2012-11-24 10:07
I am sure of the salary bit...with all due respect to desai and its stature, i can confidently say that it offered 4.8 to freshers at least for the delhi office.
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1.1.1.2
 
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Recommend! +0 Objection! -0 Blackrobe 2012-11-26 11:38
Haha.
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1.1.1.2...
 
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Recommend! +0 Objection! -0 Seriously? 2012-11-26 19:00
Perhaps in Delhi but certainly not in Bombay. Starting salary is at least 7,20,000 plus plus.
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1.1.1.2...
 
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Recommend! +0 Objection! -0 ANI 2012-12-03 19:45
Desai Bombay pays to a fresher nearly 6 lac a year. My friend is working there.
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1.1.1.3
 
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Recommend! +0 Objection! -0 aaa 2012-11-27 13:14
is desai a Tier 1 firm.... I doubt....
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1.1.1.3...
 
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Recommend! +2 Objection! -1 Associate 2012-11-27 18:31
Quoting aaa:
is desai a Tier 1 firm.... I doubt....

In terms of compensation, D&D is not even Tier III
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Recommend! +0 Objection! -0 Student 2012-11-23 14:25
Some forgot to include Finsec in Tier-1 !!!
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Recommend! +0 Objection! -0 Hoo Hoo BNSL 2012-11-24 10:40
No....its not tier 1. not tier 2 or 3. may be tier 4 or 5.
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Recommend! +0 Objection! -0 Haha 2012-11-25 02:54
What even possessed you before you wrote this comment? Really? Finsec. Tier 1? Get a life!
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2.2.1
 
Recommend! +4 Objection! -0 Gaurav 2012-11-25 10:54
Well they pay 10 Lacs which is more than AZB Delhi - this is a story on salaries. Finsec is clearly tier one as per the definition of Tier 1 - i.e. 10lakhs per annum. Get your maths right - HooHoo and Haha.
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Recommend! +3 Objection! -0 Request 2012-11-23 14:26
Kian,

Great Job...!!

I would like to appreciate the fact that LI has been the first website in legal domain to have addressed the most controversial and confidential aspect of law firm industry i.e. SALARY. Though i understand the salary at different firms vary significantly at senior level, I would request you to make the same PQE table for the individual firms and then mention the range of salary offered at a particular level (as done in case of top tier and mid tier firm). This would really help thousands of corporate lawyers in the country to take a well informed decision.
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4
 
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Recommend! +0 Objection! -0 Waiting 2012-11-23 14:45
Kian what about the individual reports with deails at respective levels that you had promised to email?
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Recommend! +0 Objection! -0 City Based Classification 2012-11-23 14:50
Would be could if you can come up with some sort of city based classification across the firms. Also there are certain city specific firms who are leaders in their respective cities...so when JSA or AZB are leaders and highest payers at the pan India level, there might be a firm in Bangalore or Delhi which pays at par or competitive salary in comparison with the respective city office of other national firms.
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6
 
Recommend! +5 Objection! -0 @ Kian and LI 2012-11-23 15:30  interesting
Excellent job. Keep up the good work guys. The site is almost like The Lawyer, Above the Law et al.

Cheers,
Fan
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7
 
Recommend! +29 Objection! -0 Fixed 2012-11-23 15:36  interesting  top rated
My firm is the best! To avoid falling into such useless debates, it does not pay any salary at all.
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Recommend! +2 Objection! -0 Anon 2012-11-23 19:55
Great to see a young firm like Argus on the list! Does the merged firm of Udwadia-Udeshi-Argus also pay the same salaries?
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Recommend! +2 Objection! -0 Haha 2012-11-25 02:58
Yes! They do..this figure is post merger itself
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9
 
Recommend! +19 Objection! -0 Om Mendel 2012-11-23 20:59  interesting  top rated
Our firm has not been mentioned in this article. We are in a different league altogether.

Regards,

Om, Son of Som
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10
 
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Recommend! +2 Objection! -0 tejal 2012-11-26 12:37
Nishith Desai Associates does not pay 9 lakhs to freshers. They actually pay about half the amount and the firm has an employee tax structure as opposed to a retainer tax structure.
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Recommend! +0 Objection! -0 Abc 2012-11-26 14:57
U hv forgotten to include TT & A!
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11.1
 
Recommend! +5 Objection! -0 DEF 2012-11-26 16:50  interesting
Quoting Abc:
U hv forgotten to include TT & A!


And I hear TTA's salary levels are higher than those of the other firm's mentioned in the survey. What about firms like Platinum and Bharucha & Partners?
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11.1.1
 
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Recommend! +0 Objection! -0 AbcE 2012-11-26 21:57
Exactly which they had included in their previous report on graduate salaries
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12
 
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Recommend! +1 Objection! -0 tima 2012-11-27 01:18
I read this few times and i think the methodology is dicey but its right tht salries are fuzzy and theres no transparency. My senior was doing the work of 3 guys for years and he foubd out that i got just a few grand less than him. So yea, theres no logic.
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13
 
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Recommend! +1 Objection! -0 ABC 2013-06-10 00:00
Will the pay package of a firm differ according to corporate and litigation?
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