DSK Legal has embarked on a series of cash flow management exercises in light of the ongoing Covid-19 crisis, including temporary reduction in remuneration of fee-earners.
We understand from sources with knowledge of the move that DSK partners’ remuneration this month has been reduced by 30%.
Fee-earners at around the principal associate level have faced a reduction of around 20%, while the more junior DSK fee-earners saw take-home-pay that was 10% lower than usual.
The measures are intended by the firm to be temporary, according to sources.
DSK declined to comment when contacted.
The range of Covid-19 management responses amongst the big law firms has varied somewhat so far:
- Khaitan & Co equity partners have taken a 20% haircut,
- Trilegal has reduced bonus payments slightly,
- Shardul Amarchand Mangaldas has deferred bonuses but kept fixed pay the same,
- Cyril Amarchand Mangaldas has transferred up to 30% of fixed components into variable components and completely stayed equity partner drawings,
- Talwar Thakore Associates (TTA) has frozen fee-earner salaries at last year's levels, and
- first out of the gates was Agarwal Law Associates, which in late March had cut some fee-earner pay by 30%.
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That said, DSK is still a larger firm with deep pockets to manage this situation. It would be interesting to see how pioneer plays out considering most of their partners are young and will not give up on their needs. So definitely the associates will take a cut soon. I am sure the partners will not make a capital contribution. So it should be seen whether they can let go of their pay, or will the associates bear the brunt.
[ed: unconfirmed as at this time]
They are a good Tier II firm with decent reliance on litigation which isn't going to pick up in Mumbai for some more months atleast!
So instead of doing the idiotic thing of 'modernising' (as defined above - and beyond - yeeeeeee!), they stayed put in their old public premises (in defiance of the Government - they stuck it to the man yo!) and chose to litigate. The overall expenditure of one of these older firms on rent + a small team of lawyers to continuously get adjournments in their eviction proceedings under the PP Act in the last 5 years is probably less than what one of these 'mauderrrn' law firms spend in a year on rent (not to mention who the landlords are - thats covered under an NDA so sshhhhhhhhh!). Now sit and gloat about that as you stare out of the window nearest to you, through which your salaries, dreams, and aspirations of noveau riche prosperity are slowly bottoming out.
Love and hugs from the Teddy Bear of your childhood
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