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So what does this tell us?? You may just have the potential to be NUMBER ONE in UPSC Mains (a descriptive paper which tests writing skills) but still not be cleared by UPSC at prelims stage itself because may be suck at objective. So it is totally wrong to say that just 12000 are serious. I'd say there are lakhs of serious candidates. But as the old saying goes if you test a fish by its ability to climb trees it will always fail. UPSC system has failed many a bright spark.
Secondly, nowhere in the DEVELOPED WORLD you have a civil services system similar to India. Simply put, it is TRASH. These officers were given so much power because they used to be British and we were their slaves. It was a Master-Slave relation. It is a pity how the same system has been allowed to continue unhindered in modern India. Even in UK you do not have an All British Service. In US there is no post like a DM. No exam that you can give and become the fucking CEO of a district. Govt services much like any other services like Army should be ground up. Like you start from a basic post and climb up the ladder. Similarly there should be lateral entry, like in US. People should be free to join govt from private sector and vice versa. But these babus oppose even that. They just want a system that feeds their ego. Surprisingly middle class Indians who are the WORST SUFFERERS of the high handedness, corruption and rudeness of these officers are actually a HUGE SUCKERS for these civil services and want their children to become one. The reason is simple, they want their children to have same powers and same money, that they had once been victim off. It is a typical middle class Indian's only lottery to power and money. Just give an exam and get everything. This lottery is not only illogical but should have completely been annhilated in 1947.]
I still feel the regret sometimes. But that's rare now. And it seems to get more and more rare as time passes. Ultimately, if you find happiness in your work and are content, it gets fine.
A couple of friends & batchmates gave their sincere efforts for UPSC. They were aspirants for 1-2 years after graduation, but could not clear. Both of them are litigating under seniors - one of them is getting independent clients too (second gen lawyer). In the longer run, 1-2 years don't matter.
But beyond this, at a personal level, I don't think it's worth giving too much time to UPSC. As you already said, you lose out on seniority. Then all the while you're prepping, you see your peers enjoying life (as much as is possible in their working conditions). You have to cut yourself off from a lot of social interactions and not attend a lot of parties. It's the opposite of what you have to do in the field of law otherwise - you have to be socially active, always meeting people, in order to get clients/referrals/whatever.
So if you do take the plunge, and fail, you would be restarting your career from the scratch. Again, it doesn't matter in the long run - but nothing much matters in the longer run as long as you remain content.
Do not take the plunge unless you have some sort of decent job lined up ready to take you unconditionally or reservation or great financial backing. 1.3 million people take the exam annually for 1255 seats. With these odds, the best chance of actually emerging successful is heavily dependent on luck instead of pure preparation. I have seen some great students who great institutes (like top IITs etc. far more difficult to get into compared to NLUs) lose 4-5 years of their life preparing for it. Keep in mind that you have to clear all 3 stages, even making it to the interview and failing means you're back to square one. Many get stuck in this rut, studying in the prime of their young adult life and emerge out of it hollow. You'll be 27-28, no work experience, no growth, no income these years, and no job prospects. You will see college and school mates around you getting promoted, buying cars, taking vacations, paying off home loans all the while you've been a net drain on your parents resources. I only say this because firstly, chances of failure are exponentially higher than that of success, and I've seen close friends go through this. Giving half of decade of something to your life and it not working out is hell, especially because in an exam like this, you aim for the moon but when you fail you do not land among the stars, you are stuck on earth, just older and mentally broken.
Only and only go for UPSC if you cannot imagine life without being in government service OR you are sure your mental resolve and toughness is strong enough to tide over the scenario of failure.