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Cost of living in India has significantly increased over the past 5 years which is another factor which needs addressing by hiking pay. India's law firm pay has been too low for a while now, as compared to global standards plus the kind of work expected from lawyers. Even banks and in-house jobs in India pay much more than law firms today.
/s, obviously
- commoditized work
- no innovation
- hourly rates not increasing
- clients pushing back on legal costs
- legal work (usually) not considered strategically important
- clients pushing towards fixed fees
- too many law schools, freshers willing to start as paralegals / junior associates to work at 40-50k
- many more first gen lawyers for whom earning even 40-50k in litigation is tough for many years
- courts mostly closed so litigation lawyers trying to shift to corporate
- predatory HR and recruiters hand in glove with each other
- given high NLU/JGLS fees and education loans, freshers have less bargaining power and can't be out of work for long
- unhealthy day zero competition between NLUs
- newer firms like Rajaram snagging big mandates by price undercutting
- promoter greed
- pressure on big law firms to reduce costs to increase margins (e.g. moving offices from Delhi to Noida but not Delhi to Gurugram) to make more equity partners and that equity counting for something
-no real threat from in-house as salaries continue to be much lower in majority of in-house roles
- after recovering the ground lost to covid, economic growth slowing
Lets say I intern at the Delhi High Court or Supreme Court. Travelling from Dwarka to Pragati Maidan both ways on the metro + last mile auto (at times) + travelling to the lawyer's office by metro/auto (last mile) + lunch and dinner (as you cannot go back to the hostel mess), other incidentals make studying and the whole education process very expensive.
This is not counting the money one has to spend on getting a suit which is mandatory for most ADR/Moot competitions, travel to domestic competitions (even if college foots a good portion of the expenses, food and other incidentals like cab from and to the airport or railway station are seldom covered).
Unless you are from Delhi, travelling back home and to college even once a semester costs money. Don't just think of how you can probably go back home to Rajasthan in under 1000 rupees think about the students who come from different parts of the country.
Doing these activities over 5 years, even if you assume you spend close to nothing on entertainment, costs a bomb. I was fortunate that my parents could afford most of this, but by no measure are NLUs cheap.
I am not saying that the government owes me the best in class education for free, but ask only that you acknowledge that this is not cheap.
Even accounting for an average inflation rate of 5% per year, the indexed salary should be 20.1L. That implies a pay hike of at least 33% across pay bands just to keep up with inflation.
Anyone who has prepared mandates in 2015 and right now would know that hike in hourly rates has been much greater (roughly from 8000 per hour to 12500 per hour approx as per law firms' own submission for journals rankings). That would be more than 55% increase between 2015 to 2021. Even assuming client pushback, it would be absolutely unreasonable to argue that law firms cannot afford to keep up with basic inflation.
The only real factor so far has been the disproportionate bargaining power. With attrition at an all time high, law firms are finding it very very difficult right to find associates at senior levels. While you may have 20 different law colleges lining up for an A0 job, anyone who has been a partner would know how rare a commodity SAs and PAs have become.
If I was at their stage right now - SA and above - I would use this opportunity to properly negotiate a major hike during interviews. Given my workload, I would gladly pay a 30% premium for an SA/PA if the candidate bargained for it.