Turnovers at India’s top 50 corporate law firms range from $500,000 (Rs 2.2 crore) to $40m (Rs 181 crore) with aggregate revenues of all firms amounting to $350m (Rs 1590 crore), estimated an analyst report on the Indian legal industry.
Around 15 corporate law firms in India have annual revenues in excess of $15m, according to the 2010 India report by legal consultancy RSG India, while the largest Indian firm has generated around $40m in turnover.
The report did not identify Amarchand Mangaldas as the largest Indian firm by turnover but it is understood that turnover at Amarchand is likely to be significantly higher than $40m.
With 443 lawyers the firm has more than twice the number of lawyers of its nearest rivals in the RSG league table; AZB & Partners, J Sagar Associates (JSA), Khaitan & Co and Dua Associates have 180, 180, 209 and 190 lawyers each, according to RSG data.
In terms of headcounts FoxMandal Little is listed by RSG as the second-largest firm in India with 400 lawyers.
A turnover of $40m would be roughly equivalent to the turnover of UK regional firm Ward Hadaway, which is the 84th largest firm in the UK by revenue according to The Lawyer magazine’s UK 200 ranking.
The largest UK firm without significant offices outside of London is Slaughter and May, which bills around $760m annually – almost 20 times as much as India’s largest firm.
RSG also ranked Indian law firms using the criteria of quality, reputation and capability to arrive at a combined score, based on performance in deals league tables, feedback from clients and the bandwidth of each firm.
Amarchand and AZB were ranked top and tied in the top spot and followed by JSA, while Khaitan & Co and Luthra & Luthra shared the joint fourth place.
Trilegal was placed sixth, Desai & Diwanji seventh, and DSK Legal, Nishith Desai Associates and Wadia Ghandy shared a joint eight place.
The report also estimated that all of India’s litigation-focused firms are billing around $100m per year, with foreign firms generating around $350m per year from India.
RSG said that foreign firms picked up $250m of their fees from domestic clients with only $100m being billed for foreign clients, while 50 per cent of litigating firms’ fees came from abroad.
The methodology for those estimates involved interviews with Indian and foreign law firm partners and corporate counsel. Averages were taken of estimated in-house legal spends and turnover figures to arrive at a hypothetical size of the entire market.
The total legal spend by the 100 largest Indian companies was $480m, said RSG, while foreign clients spent around $330m on India-related legal advice.
The sectors with the largest legal spend were banking, finance and insurance, closely followed by telecoms and communications, where the average company spent upwards of $2.3m per year on external lawyers, according to the report. Companies in the energy and power sectors spent less than $1m annually, with other sectors’ legal budgets being $600,000 or less.
Photo by Alan Cleaver
Comments
Also this confirms the huge gulf between Indian firms and the UK/US firms. All said and done, the US and UK are all light years ahead!
Quality and reputation are the significant factors in the score. So the rankings of S&R, Platinum and TTA, all of which are regarded highly by the big firms and clients, does not make sense. Some firms who do volume based work at low charge out rates are ranked higher than some niche high-quality practices who are small but known for quality and per-partner-earnings. Also, some notable firms are missing e.g. P&A Law offices (aka Pathak) while some lesser firms have made it o the list.
What say people?
1. Quality: score based on performance on deals tables for M&A, project finance, private equity and capital markets by both value and volume for the past 12 months and past 3 years...; AND
2. Capability: score based on size of law firm by number of lawyers and estimated turnover, capability by practice area and locations,...
The above named firms are new, may not have multiple locations, not too many lawyers or many deals or huge turnovers - but they are definitely right up 'there' so far as 'perception' is concerned...
Maybe, RSG needs to rethink its parameters!
AMSS, AZB, Luthra, JSA (Tier one)
Bharucha, TTA, P&A Law Offices, NDA (Tier two)
Trilegal, Platinum, Khaitan, Wadia (Tier three).
No rankings within tiers.
So far as the RSG rankings are concerned, the Mullas, Crawford Bayleys & Kangas dont deserve a place!
In response to your queries, we only write about reports when there is some interesting news or data in it that is worth writing about.
The associate engagement survey - again, apologies for the delay. It really should be around the corner now, at least the first part. It's one of those things that always slips or some news breaks and it gets pushed aside. Completely unacceptable, I agree, was going to have it done this week...
Best,
Kian
Linklaters, Allen & Overy (Tier one)
Shearman, Skadden, Clifford Chance (Tier two)
200 US and UK law firms. (in tiers three- ninety nine)
HUGE GAP
Amarchand, AZB, Luthra (Tier one hundred)
HUGE HUGE GAP
all other indian law firms
Is the gross turn over of a firm the only indicator of the quality of services delivered by it?
Does the fees charged by a law firm has any reasonable nexus with the quality of services delivered?
Do the numbers help in rendering quality deliverables? (Agreed that numbers are important for large transactions)
@ #14 - How come you don't count JSA in your tier 100?
1. The Indian legal market is a infant as compared to the huge legal market around the atlantic.
2. The high magnitude of deal size and complexity seen by major US/UK firms have not been touched and seen by Indian firms..EVER.
3. Indian equity partners make more money than their wall street/ high street counterparts.
4. Junior lawyers everywhere are the sufferers but juniors in India suffer the most.
5. From 1992 the growth in the Indian economy has been monumental but in legal sector it is still triffle. May be related to petty politics at the BAR?
6. Indian legal market has huge potential for growth. That is why everyone from abroad wants to kick start their practice.
7. If this surevy quotes ridiculously low figures (which I believe they do), then it should get the eyes of the government rolling because there is a need to bring these law firms under the scanner. The way they undervalue themselves shows how brilliant they have been over the years to protect their protected status. Time to lose the petty politics and come out with concrete laws to regulate law firms.
However, I totally disagree how the survey uses the US/UK law firms as a bench mark. It would be highly useful and a far better analysis if the comparison is made to legal markets of other growing and developing economies such as Russia, Brazil, China etc. We can only then understand how Indian law firms are pitching against the other developing players. Comparing them to firms in the UK and the US is like comparing our GDP with the GDP of US. May be KIAN you would be interested to generate a report on this? contact me if you need help.
I agree that developing market would be interesting, but there is also less data available in many others. China's legal market anecdotally has had huge growth and practices, many of which are from international firms...
Best regards
Kian
A&O and Links don't give 'india law advice' smarty! They use Trilegal and TTA. So by your logic, TTA and Trilegal are Tier 1?
Smart, real smart!!
@ 22 & Kian, honestly, its a no brainer and you dont need any further analysis to arrive the conclusion that entry of foreign law-firms is only going to adversely affect a handful of Managing partners and equity partners of mediocre law-firms... other than that everyone stands to gain.... the big 4 or 5 or even 6 will grow stronger, the clients will benefit and for the working underclass of the present day Indian law firms (retained partners and associates included), things would become rosier.... if the liberlization of the legal market around the globe is any indicator!!!
Btw, if you do indeed go ahead, don't miss including South Korea... though relatively small, it remains the only developed economy (or shall we say only major economy apart from India) not to allow foreign law firms...Cheers!!
A - No. Gross turnover indicates market share. And obv., big market share indicates a big firm. But that does not mean that "best revenues = best quality". There can be a small firm providing high quality advise in a niche area, charging the highest per hour rate (but generating lesser gross revenue than big firms). The reason may be that the partner wants his own shop and he's is the best one around with a professional team.
Q - Does the fees charged by a law firm has any reasonable nexus with the quality of services delivered?
A - Well, mostly. Firms command such fees coz people are willing to pay them that much. And that is a function of "quality of services" and reputation.
Q - Do the numbers help in rendering quality deliverables? (Agreed that numbers are important for large transactions)
A - Not sure what you mean. But a larger firm can do larger transactions that need a lot of people. Also, in certain cases, they can meet tighter deadlines by putting more lawyers on the deal. Of course, the client has to pay extra. I don' think big firms put lot of people on deals when that's not needed. Instead, they prefer to do as many deals as possible with as few lawyers on each deal as possible.
Please see this link. AMSS's revenues in 2008-09 were USD 63 million. And these were numbers that AMSS provided ALB. I suggest that RSG be forced to publish a retraction and an apology. This is misleading, and provides the world a wrong perception of the Indian legal market. Frankly, shoddy research like this needs to be condemned. RSG, give us your response. How did you arrive at these numbers?
AMSS would be earning, in the league of 90-120 million USD.
I read a similar article, a while ago, where they ranked, top Litigating lawyers earning, citing 40-50 crores a year. Anyone who has briefed the top litigating lawyers, would realise, that, the king of the litigating lawyers (in terms of earnings), Mr. Harish Salve, would be pocketing about 200-250 crores, according to a conservative estimate. There is no way, that a team of nearly 500 lawyers, would be earning the same figure.