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From the frontlines: Of law school pay packages, the economy and campus recruitment wars

LI and Mint: Excavating the depths of legal
LI and Mint: Excavating the depths of legal
In today’s edition of Mint: Law firms enjoy unequal bargaining power in a market where the talent pool is deepening every year.

The sobering state of the economy has got India’s law students worried. For many, particularly at the top few schools, getting a high-paying job was the primary aim of their legal education. The higher pay packets also justified the pursuit of an interest in the law, especially when it came to convincing parents who would otherwise prefer their children aspire for admission to an Indian Institute of Technology (IIT) or Indian Institute of Management (IIM).

Both the media and the law schools have been happy to encourage the perception about high salaries. For those graduating from India’s first national law school, National Law School of India University (NLSIU), Bangalore, “the minimum salary a student earns through campus recruitment is Rs. 1 lakh per month,” India Today said in its 8 June supplement ranking India’s top law colleges.

That figure contributes to what is fast becoming a myth about the law being one of the most lucrative study choices. To be fair, almost half of the 2012 batch of NLSIU’s graduates did pick up basic annual starting salary packages of more than Rs. 10 lakh that can become Rs. 15 lakh with the inclusion of year-end bonuses. For the five who joined foreign law firms overseas, the figure doubles. But even at NLSIU, some students were placed with law firms or corporates paying less than that, through choice or otherwise. And when one looks at the newer national law schools, packages below Rs. 1 lakh become the norm.


This year, according to several students, it has become even harder to find the high-paying jobs that appeared to be so plentiful until recently that it was said every student would have three job offers to choose from.

“I think it’s the economy only,” said a student on the recruitment coordination committee (RCC) at a national law school, echoing the views of others. He spoke on condition of anonymity, as did the other students interviewed. Most didn’t want to scupper job prospects or attract the ire of their fellow students seeking employment.

Another law student responsible for recruitment at NLSIU notes that in 2012 fewer foreign firms hired Indian law students than in previous years. “The marked difference I see was less London law firms coming.”

Domestically, law firms are all concerned about the economy but in the longer term, market expectations are subjective and interpretations vary.

“It’s certainly on a slower level, it’s not as hot as it was, and my own sense is it’s going to get worse before it gets it gets better,” said Luthra & Luthra managing partner Rajiv Luthra about the economy. As a result, he said, the firm may reduce 2013 junior recruitment, and it has delayed making some pre-placement offers —job contracts made to students off-campus, usually after internships.

“There’s certainly a lot of apprehension but it doesn’t stop us from hiring graduates,” said Trilegal’s Mumbai-based partner Nishant Parikh, who handles graduate recruitment at the firm. “From a cost perspective, (starting salaries are) not a lot and it’s important keeping the long term in mind, that you’ve got people at every level”.

So far this year, the firm has hired around 18 law students to start in 2013, with an “appetite to hire at least seven or eight more”, said Parikh—figures that are comparable with the intake in previous years.

No doom and gloom, yet

Although the market was “uncertain at the moment”, the pipeline for the rest of the year is “pretty good’, unless the general election in 2014 throws a spanner in the works and work flow comes to a standstill, Parikh said.

“Things are not crazy busy but we are very busy, so I don’t see a problem,” he said.

Amarchand Mumbai partner Vandana Shroff said, “So far, yes, things are not as hunky dory as one always wanted in a BRICS country to be. But it’s not yet doom and gloom, and it doesn’t feel like that if you look at the pipeline.” BRICS is short for Brazil, Russia, India, China and South Africa.

The infrastructure practice has stayed healthy, despite areas such as capital markets having scaled down, as reported in Mint on 24 May.

The perception that hiring has declined is not necessarily borne out by the figures, and students are often prone to operate in a microcosm of their own college when assessing job prospects. Nine Indian law firms pay base salaries of more than Rs. 10 lakh a year to fresh graduates. Of these, the top four, which hired between 20 and 64 freshers each and paid salaries at the top of the market, are Amarchand Mangaldas, Luthra & Luthra, Khaitan & Co. and Trilegal. In the 2010-2011 financial year, those four firms alone hired at least 144 students. This is more than the next largest 22 firms put together, which hired fewer than 100 students across 14 colleges. From the figures available so far, the top firms hired roughly comparable numbers in 2011-12 across all colleges, while the long tail of smaller firms performed similarly. Also, the prospective recruitments for 2013 are not unusual so far.

Pressure of competition

So where does the student angst come from?

“It’s an employer’s market right now, along with increasing competition among law colleges as well,” said one law student. “It’s becoming extremely difficult to maintain the quality of recruitment—for all the national law colleges as well.”

This is the key—domestic recruitment is dominated by a handful of firms with disproportionate bargaining power.

In 2011, several colleges saw their first batch of graduates: Chanakya National Law University (CNLU), Patna, Ram Manohar Lohiya National Law University (RMLNLU), Lucknow and Rajiv Gandhi National Law University (RGNUL), Patiala, and School of Law, Christ University, Bangalore.

While those colleges mature and build their contacts, National Law University, Delhi, graduates are entering the fray to be hired for 2013. Some law firms have already made offers to graduates from there.

All that adds to the pressure on existing elite colleges and those aspiring to get there. Increasingly, even if a law firm can’t recruit from one of the top colleges, it can make up the numbers elsewhere. The top law graduate has become a commodity.

Spooked by the markets, recruitment committee members at two law schools—the WB National University of Juridical Sciences (NUJS), Kolkata and NLU Delhi—are complying with gag orders from the administration on 2012 recruitment figures.

Rather than court practice, the hiring gap is partly being filled by the legal process outsourcing (LPO) industry. Generally less popular than other “corporate jobs” for lawyers, LPOs can pay comparably well and promise better work-life satisfaction.

LPOs hired at least 42 lawyers across 14 colleges in 2011 but that is just the tip of the iceberg: many LPOs hire from more than 20 law schools across the rankings every year, far more than any law firm.

Hyderabad-based Quislex said it will hire 100 fresh graduates in the 2012-13 recruitment year. Pangea3, bought by Thomson Reuters in 2010, employs 850 lawyers—more than any other organization in India—and aims to hire 30 again this year.

One difference between the LPO industry and the wider Indian legal market is that the LPOs have grown so fast in part because they are largely unregulated. Many also boast significant foreign investment.

A zero sum game?

More jobs can be created by liberalising the legal market and allowing foreign law firms in, an argument the foreign firms are also making. The UK ministry of justice issued a press release in 2011 that said that the Indian legal market would grow to $12.3 billion from $4 billion by 2016 if “fully liberalized”, compared with $6.5 billion without foreign lawyers. The justice ministry didn’t say where it got those numbers from, but in light of the state of the economy it’s not likely those targets remain realistic.

To some extent, the liberalization debate is moot anyway, in light of the Bar Council of India’s continued opposition to such a move, the apparent lack of interest by the national political parties and the absence of any powerful liberalization voices.

A student pointed out that to some extent graduate hiring is a zero sum game and there is only so much work to go around.

“Even if foreign firms come in, they will go to lateral hires (at a senior level),” the student said. “The jobs should increase, but as the economy (slumps), the entry of foreign firms might result in lesser work for (and jobs in) Indian law firms. It might balance out in the end.”

As things stand, the jobs situation is likely to get worse rather than better. Or maybe the myth of law as a career path rivalling the IITs and IIMs is catching up with reality, at least for most future law students.

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

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