In fact, I'm surprised why this didn't happen earlier. Sounds win-win. For example, pay associates 60K in Nashik instead of 1L in Mumbai. The firms save money and the associates probably save more than they would in Mumbai and live in a better apartment. If there is an important physical meeting in Mumbai, the associate can travel by train. In fact, you can even keep associates in Raipur or Ranchi at 50K and ask them to fly down for physical meetings (at the firm's cost). It will still cost the firm less.
Correct. Associates would prefer saving zero in Mumbai versus saving 30K pm in a tier 2 city. Remember that your lack of savings early on will be compensated once you reach SA/partner level and earn mega crores. There is also the issue of prestige and status. Even if you may save more living in Jaipur and Raipur, it’s a lot more prestigious to stay in Mumbai. There’s quality of life too. You have great restaurants, malls and nightclubs which you don’t have elsewhere. Then at some point you may wish to get married and have kids. The best girls will want to live in Mumbai and you will also want your child to attend a good school in Mumbai.
It's because I would prefer a 1BHK in Mumbai rather than a 2-3BHK in Ranchi/Raipur for the same price. It's very difficult to attract young talent to T2-T3 cities. Another reason is that clients generally prefer to work with counsels who are based out of big cities or are practicing in the same city as they are. So, attracting clients becomes difficult as well.
Why not just enable WFH then? Instead of paying 16-19lpa to A0 for Mumbai, pay 12-15 lpa for fully remote position. Associate saves like 4lpa rent, firm saves office space rent and overheads. Win win.
In Mumbai, you need to earn at least 1 cr per annum in hand to lead a comfortable life, by which I mean 2BHK in a good area + Honda City with driver + eating out twice or thrice a month + 1 foreign holiday a year + shopping + essentials + about 6 to 10 lakhs a year in savings.
In a smaller city, you can get this with 20 lakh per annum.
https://economictimes.indiatimes.com/jobs/hr-policies-trends/top-law-firms-rule-in-favour-of-smaller-cities-plan-to-hire-local-talent-in-nashik-pune-indore-jaipur-chandigarh/articleshow/109443643.cms?from=mdr
Mumbai ---> Shift to Thane or Kalyan. makes sense.
In a smaller city, you can get this with 20 lakh per annum.
- 1 to 4 lakh per month for apartment rent.
- 20 lakhs to 1 crore per year every 5 years for a car
- 30K to 40K per month driver salary
- 30K per month eating out and shopping
- 20K per month essentials
- 50K to 1 lakh per month on swag and bling, depending on your budget