Hey folks

I got a campus offer from LKS in their IDT team but I am not really aware about the career prospects at LKS in particular and IDT practice in general. I know that they offer 14LPA fixed to A0s with some bonus to but not much information is available on the salaries of Senior Associates and Principal Associates.

I am looking forward to suggestions from people who are working or have worked at LKS.

Over the last 3 to 4 years, the trend among younger lawyers at LKS has been to learn the core skills of IDT and move on to either the Big 4 or shift entirely into a different practice area and move to another law firm. If your intention is to build a career in IDT, LKS is a good place to start. If you stick around too long, they will of course treat you well, but you will make less over time in comparison to your peers in other tier 2 firms and tier 1 firms.

The profit sharing you are referring to is the factor system at LKS. The monthly collection target for each team is set at 3x the team’s monthly cost. This is how it works - from PA and above, 20% of the monthly compensation is variable. Consider this - if a team’s monthly cost is 1 million, the monthly collection target is 3 million. In this team, if your monthly pay is 100k, you will get 80k as fixed pay every month. It’s the 20k component (20% variable) which will vary. If your team achieves its full monthly target i.e. 1x, you get full 20k. If your team achieves 2x target, you get 40k, and so on. This is a good policy on paper. The reality is different. If your team achieves only 50% of the target, you get only 10k, and so on. So, you don’t just share profit, you suffer the loss also. The 3x target is anyway high for every team and very few teams manage to achieve it and if they do, it is limited to only a few months in a year and this phenomenon of exceeding target is generally seen in Jan to March period when pressure to collect fee from clients is high.

This is an apt explanation of the “factor” system. I remember a few years back, the variable component in my monthly compensation was 40k. Out of this, every month I would get 15k, 20k, 25k, but never the full component. By the end of the year, I had lost about 200k in that year. Guess what my bonus that year was? It was 200k.

So, what was deducted from my monthly compensation in the entire year, was paid back as bonus. As a result, I just got my full salary for that year, but effectively, no bonus. This starts to hurt more as people progress to AP and Partner as the variable component increases. This is one of the main reasons, many people leave at PA and AP level. No doubt LKS folks are one of the nicest bunch to work with. But the compensation and incentive structure needs a serious rethink.

IDT practice is becoming stagnant across many firms. The reason is that the government through the GST Council has been resolving issues and simplifying the GST law. The IDT work on the advisory side has seen steady decline and the market is becoming tougher with many boutiques, CAs and Big 4 commoditising the work. If the Customs 2.0 reforms also simplify customs laws, that will make it very difficult for IDT focused firms to sustain revenues and growth. If you have an option, choose some practice area other than IDT.