FoxMandal Little managing partner Som Mandal said: "For certain categories of people payment has been withheld for June and would be paid in July."
It is understood that a large number of associates and partners are still unpaid but Mandal declined to confirm the precise figures and details.
He said that the Delhi office's lock-up had increased from 60 to 90 days to a period ranging from 90 days to six months. Lock-up is the time it takes for a firm to bank fees on work in progress.
Mandal told Legally India that the issue needed to be resolved to prevent it from happening in future and that the firm had "action plans in place".
"We are pretty sure of resolving this matter - hoping that it should close by this month or at the latest by August," he said and added: "We are looking at alternatives how we can secure ourselves in bridging the payment gap."
Mandal explained that the Delhi office was experiencing delays in payment from 60 to 70 per cent of clients, particularly from international clients, which account for 70 to 80 per cent of the office's billings.
He said that the delay in fees-collection has caused a cash flow problem for the office, despite Delhi's revenues increasing by 45 per cent in the last financial year ending 31 March 2009. "I would also like to state that we were perhaps the only firm in India to [have increased associate salaries] between 5 to 10 percent even in this difficult situation."
Mandal explained that many US and English firms have taken money from their partners to assist in their financing but noted: "In India we don't ask partners to put in capital and we don't get bank finance or overdraft for working capital."
The situation only affected FoxMandal Little's Delhi office, he said.
Little & Co is the Mumbai chapter in the FoxMandal Little network but is financially independent and not integrated. One Little & Co partner confirmed that the Mumbai office was unaffected by Delhi's cash flow problems and the non-payment of staff salaries.
Several large Indian firms told to Legally India that they have experienced a delay in billing recovery, although all claim to have continued paying staff normally. Managing lock-up has also become a major problem for international firms.
Click here to read how law firms and legal consultants have been trying to manage lock-up in India and abroad.
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No doubting their credentials, mind you. The products from top law schools have phenomenal potential. However, they are green-horns who largely learn by shadowing, during their first year or so. The high salaries paid to them is passed on to the client, which in turn has to pay high fees for little or no value addition it receives from a junior associate. Perhaps, Fox Mandal too has tried competing here and burnt its fingers because of their clients' refusal and/or inability to pay.
What's happening at Fox Mandal could just be the tip of an ice-berg in India. Thousands of law firms in the West are either shutting shop or cutting down their size because of their inability to pay salaries, which in some cases, are obscenely high. Perhaps, India is not insulated. The associates at FM who are yet to be paid need to make a ruthless introspection of themselves as well. At the end of the day, your salary is only a by-product of the value you bring. The value should be not only to your law firm, but also to the end client.
My aim here is not to sit over judgment over either Som Mandal or the associates whom he has employed. I don't know any of them and wish them all the best in getting out of this sad situation. The point I am raising here, as I said earlier, is whether entry level graduates are really worth six figure salaries?
Legal Dodo.
In my view this is a subjective assessment and there will always be several views on this. Perhaps the best way to decide starting salaries objectively is to let the "market" decide them provided there is free competition and the market functions without material imperfections.
If we were to accept that market's assessment of starting salaries (for lack of a better objective way of deciding salaries, irrespective of whether market's valuation is somewhat inflated) is the fair value of a first year associate then I believe the salaries that firms pay today are well deserved. Organised legal market in India today, albeit small, functions relatively independently without much regulation. There is also sufficient competition to get the best deals and associates. With these concerns addressed, I think the forces of demand and supply are the best to judge market values (starting salaries) of a first year associate.
Thanks to you, atleast others in the legal fraternity are now aware of the plight of the many associates at Fox Mandal's Delhi office. Just to let you know I am an associate working at Fox Mandal and would like to add / correct some of the quotes in your very thought provoking article. Not only have we associates at Fox Mandal not been paid for the month of May and June this year but we still await a quarters payment from the year that has gone by. Thus one wonders if the lock up explanation provided in the article holds any water...
Although its encouraging to hear that we might after all see some of our hard earned money coming our way, I think every one should know that there has been no raises at Fox Mandal this year, contrary to as stated in the article. Only the associates who have been promoted to senior associates have been given a 10% raise.. and other associates and senior associates are still very much on their old package...
At Fox Mandal, the management(read: Mr.Mandal) has coined a very creative method of witholding lawyers salaries by introducing a concept of a retained bonus. So although the associates are lured to join the firm and asked to put their best to pull up client billing, the firm witholds quarters salary and promises to pay it in two installments as a retained bonus. I presume many reading the article would find this concept very ingenous... and as luck would have it, we are all yet to see the light of the day when the salary that we have already worked for in the past is reflected in our bank accounts...
And things have been so bad recently that many of my colleagues and I are now praying, that after not being paid for two months and with pressing EMIs and other commitments, even if the firm finds enough funds to pay us our salaries for May and June this year we would feel "grateful" to Mr Mandal...
Things are tough... many of us have run out of options ... request for payments have often been responded with the option of leaving the firm.. what does one do in such a situation...
Honestly - I don't have a solution. My advise to the 347s and the 348s is to support your law firm as long as you are with it. Instead of working for FM - work WITH it. Look around you to see where costs can be cut and help your firm cut down costs. It is in situations like these that you need to back your management the most. As a last resort, if things are really bleak - accept a lesser paying position elsewhere. Believe me - going through this will only help you emerge stronger.
And may be u should ask yourselves as to when was the last time u ever personally did anything to help your firm come out of the situation, apart from blabbering things on the internet, for which probably your firm pays the bills and the point missed here is probably there would still be hordes of lawyers & law students sending mails and making endless calls to the much criticized FM Management to be a part of it.... and may be some of them are better than you guys to understand the difference between a "Captain" and " A Cabin Mouse" of a sinking ship...
Come on fellas, mature up and make discreet efforts to widen up your conscience...
All the "belonging" in the world is not going to make the slightest bit of difference if I can't feed my family or pay my rent.
It is high time that Mr. Mandal should learn from his mistakes that a successful law firm is not by expanding throgh borrowings (Loans from various banks).
FML has lost most of its sheen in the late 2007 when it went into a major restructuring thereby sacking the extra baggages from Little & Co. (Delhi). A law firms assets are its associates and partners and not its infrastructure.
I would not be suprised if FML would try to sell itself to a foreign law firm to have a temporary face saver. If fact no body can predict Mr.Mandal as he may be more inclined to take additional loans to just set-off the current fiasco.
To all such people who have the audacity to write derogatory things about Fox Mandal or Som Mandal I would like to ask did you even bother to mention anything in better times…. When things are absolutely hunky-dory every one has a blast…. Eat drink and be merry however when the same organization which has nurtured you is under a shadow, instead of looking at positive ways to overcome the situation you talk negative about it without giving a single thought to what the organization may have done for you in the past. And to the fellows who think that Fox Mandal is a sinking ship I would like to say be the rats and chicken out….. Fox Mandal has enough people who would see it sail through this storm…. Rats can buzz off…..
Let’s not dissect petty things and look only at the larger picture. FM has grown by leaps and bounds thanks to Som. He is going to bounce back soon enough. Best decision would be to stick by him in these difficult times to reap the benefits that are in store.
No doubt Som increased the visibility and profile of FML (I don't know anything about his management style, so will not comment) and therefore should get credit where it is due. But as the "captain of the ship" deserves the kudos, he should also take the blame when the going gets tough. Please do not ask the associates to work or "belong" for free to FML! Honestly every professional is a "Kamwali Bai" and works for money (atleast thats what professional means!). Also would FML think twice about laying off these associates if the going gets tougher, I doubt it, therefore, where is the reciprocal loyality, and anyways someone who demands loyality does not deserve it. The concept of "belonging" cannot be generated easily in the structure most Indian firms follow - ultimately its the Mondal family which owns the firm, they take the profit, the employees take their salary - the hirerchy is quite clear.
There are some questions which employees of FML can ask and the management should answer such as if they are facing a liquidity crisis why are they still hiring?, have the partners (or the family) dipped into their profits from the bumper years and sharing the pain?, are they puuting in place better billing systemms and credit control mechanism? are they reviewing their network model to see if it is viable? are they involving the associates constructively in order to search of a solution?
I am aghast at the patience of the associates who are still holding on to their seats there.....
Moreover, the firm also requires a make-over as to its quality of associates and partners. [edited] partners such as [names removed] are not legally well versed with their areas of specialization and depend enormously on their Sr. Associates who are the real diamonds. Also, certin senior associates such as [names removed] are over proced for the work supervised by them. Even there is favouritism among associates such as [names removed] who are more contended to stay at FML and do a 9-7 job without any legal improvements and additional study.
Hence the firm faces loads of additional burden which needs to be streamlined asap.
I hope FML comes out to a leval competition by facing the real world as it is with sharp razor edged lawyers as associates and partners.
Let us assume for a moment that you do work at FML and that your salaries (and bonuses) have been witheld so far. What are you going to do about it?
Well, nothing really- apart from whining to the world how bad your plight is and how you've been victimised ad nauseam. Why dont you take all that pent up energy to good use? Looking for another job perhaps? Or maybe even helping your firm out of this troubled situation? By the way, have the clients you're handling paid up?
In better times, there were no complaints. Allow me to ask you this, Noble Worker and victimised @ Mandal- when your salaries shot up in March 2007 to be at par with the best firms in the country, did any of you praise the firm? Or even thank the 'management? No? I wonder why.
We hear plenty of stories of lawyers being fired all over the world. Even the cream of London and Wall Street have had layoffs, some of them in epic proportions. In India, most law firms have stopped hiring. We are all aware of the difficulties faced by law firms today. Some handle it differently than others. Instead of putting you in jeopardy by firing people, the management of FML has decided to face the cash crunch head on, banking on the loyalty and faith that most of its associates and senior associates have reposed in them. Loyalty and faith that sadly, seems to be lacking in you.
I too have to fend for my family, I too have rent and groceries to pay for. I too am facing problems. Having said that, however, I am proud to say that I work at FML and that I'm not about to bail on them in such critical times.
It has been a big blunder for Mr. S Mandal to take the strive and open its London office without securing for its future. It is really a big lesson for all other law firms to learn that they should not spread their legs out of the cloth.
Moreover, it is a pity that partners of FML have lost their faith on FML and Mr. S Mandal which have prompted them to post a comment as "Member of FM" thereby showing disrespect to the website which is indirectly helping the firm to find a partner who can bail them out.
It is a shame that people still employed with the firm are bringing bad name to it by making such nasty remarks on a public domain. This only proves your infidelity and lack of trust in your firm’s management. You never praised Som when you enjoyed the steep hikes in your salaries, the overseas trips and lavish parties / high teas !
However, I urge you all to stand by Som and help the firm sail through the tough times and see the light of the day once again ! Trust me you will not regret this.
I reiterate, if u got guts disclose ur name!! I knw u can't beacuse u know for urself that u don't have any market value at all and it is only FM which can feed u with a motive that u might learn to atleast respect the fiorm you work in. I make u sure that i will disclose who I am (and tht's a word!). And I make u sure that I am a senior associate of this firm!! TC.
I have also warned Som and his team not to make any London venture and any business office at Bangladesh as Indian lawyers are barred to practice Bangladeshilaws.
I only have simpathy for all those associates, senior assiciates and partners of FML who connot get their pay as a result of personal fancy of Mr. Som Mandal. It is right time that they should sell their London office and clear all the dues of their associates and partners whose children's school fees are also now paid by corporate Amex credit cards.
In case u r from FM Kolkata, I would advise u not to interfere in the things going in FM Delhi or Noida!! U stop interfering and I make you sure that u will c us coming out from the current scenario with flying colours! A friendly advice.. TC
U need not bother about the salaries of associates or senior associates of the delhi office. I have been in this firm for past 5 years and very well know that Mr. Mandal has never beaten shy of giving salalries to his associates. Its just the matter of time and therefore, request you to stop making any further comments. Moreover, i don believe that u r from Koolkata. It is very much possible that u r spoiling the name of FM kolkata who has nothing to do with FM delhi in terms of financial management.
Would you please disclose your name? Lets see who you are?
Lets see how much guts u possessto disclose ur name?
Waiting for your reply?
Lets get out of dis suspense and be practical.
Thanks!
Would appreciate your guts the way u spoke about FM openly.
But didnt u acted cowardly, once people started questionong you and came 2 a defensive mood rather than being attacking.
Have guts men!
One question???
When can v expect our 3 months salaries to be paid and last year salary( so called bonus)?
Thanks for your comments but please try to keep on topic.
We have unpublished several comments, which had become little more than exercises in name calling and finding out various anonymous commenters' identities.
Best regards,
Kian
Leave as ide the name game. Do confirm that the facts provided by me are correct or not?
you have forgotten the main issue; that we are not being paid and when we raise this, then we are told, we can leave if you want to!
So much for first tier firm..a firm who does not pay its associates for 2 months and whose partners have not been paid for much longer than that.
[edited]
Question: What happens to the additional perks of a partner who has left FML (the s class car)! Is is sold or kept to rot [edited]?
Question: Why did you increase the salaries of your employees when you were in debt?
Question: Is this situation a planned event to sack employees?
Question: Why did the firm stop functioning on Saturdays when the firm knew that it wanted more revenues?
Question: [edited] Was it a mistake to open the London office?
[comment edited - it was unfortunately unpublishable in parts].
But alas... the emphasis for all law firms is on proving how great we are, rather than look at our weaknesses
Pl. do not further hype the irrelevant issues...
For all the people who preach that one should belong to the institution have to realise that belonging has to be both ways. An insitution should also own up to its people and at the end of the day all said and done it is the associates and partners of foxmandal who are in troubled waters, not to mention that some of us are seeing this not for the first time in foxmandal. Neither Mr. Mandal nor the Mandal family and maybe the people who have herein preached the virtues of being a good employee are facing day to day financial crisis.
The immaturity and slanderous comments of some do soil the quality of debate. "Have got guts to even disclose your name?" - is like fraternity flatulence in full bloom on an anon forum. What will these people do, when they actually get names behind the anon comments? Kill them?
It only shows a propensity to take comments personally and perhaps, because it deflects criticism from where it is due - i.e., almost poor to [edited] management styles.
Nevertheless, some posts are quite refreshing to read. Overall, a good forum.
Kian, I am sure law firm partners are sitting up and taking note of this forum, with a trickle of sweat.
why not they put on there finger on others like bangladesh office, loss lpo project, unaffordable salary hikes, little & co., lavish parteis etc.
i beleive none of us wants this lavish parties in lieu of our salaries.
isnit....
u cant compensate ur commitments with this parties.
Go and 'Google' a theory/concept called 'Separate Legal Entity'!
I don't know how you became an lawyer and still don't know about this!
You should think twice before blabbering...
Also refer to Malabar Fisheries Co. v. CIT (1979) 120 ITR 49 - It is not a distinct legal entity apart from the partners constituting it (as far as I understand Hari Sadu is not a FML partner).
If I have misunderstood your reference to "separate corporate entity", please clarify.
are "the action plans in place" going to work till August or there will be some other action plans to work out these action plans.....as has been going on and on...the wait doesnt seem to end.
i request 456 (someone) not to rely on any name as no one has written his/her name here..
I think FM is a great firm and Som shows far more respect for his employees than many other firms I have seen. Yes, these are difficult times and in fact, unprecedented. If the oldest names in the business are falling, can you actually expect anyone to be immune? Grow up....its difficult for us all.....
As regards associates' salaries someone has rightly pointed out a few crucial issues for thought. High six figure salaries are probably not correct for fresh associates, however, in an environment where good legal talent is difficult to find law firms are not at fault to show the carrot and draw the best talent out of law schools. Nonetheless, there has to be some standards which law firm must adopt in terms of associates' payments and client billing. In times to come, for I believe the recession is not yet over, firms may have to seriously think about cutting fees and consequentially associate payouts.
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