L&L Partners’ litigation partnership, which is one of four separate partnerships that the firm operates under one brand name, has effectively cut fee-earner salaries by at least 15% and 35% via deferrals of retainers, which would operate retrospectively from 1 April, according to two sources with knowledge of the measures.
Meanwhile, the five senior partners at the litigation firm have internally said they would not draw any profits from the litigation firm, which consists of more than 100 fee-earners and in which they are the only equity partners.
The deferrals, which will operate with retrospective effect but be blended and spread out over the coming months, will not affect any fee-earners earning less than Rs 1 lakh per month, which would include all newly-qualified lawyers at the firm.
However, after that at least 15% of retainer fees paid to fee-earners will be retained by the firm, potentially to be repaid at a future date when the slump in litigation work due to Covid-19 has eased, though we understand that no concrete date or metrics have been communicated to that extent internally.
That percentage would increase with seniority, with the largest cuts-cum-deferrals hitting the more 30 salaried partners in the litigation partnership, who may face up to 35% of their retainer fees being deferred.
Several of the firm’s equity partners, including corporate firm managing partner Rajiv Luthra and senior partner Mohit Saraf, and litigation senior partners HS (Bobby) Chandhok and Vijay Sondhi, declined to comment when contacted or did not respond to requests for comment since yesterday.
A tale of 4 partnerships
L&L Partners is an unusual firm in that united under one umbrella there are at least four partnerships with quite different ownership and management structures.
Correction 9 July 2020: There are four partnerships, not three as originally reported.
At Luthra - as it was formerly known - the corporate partnership that specialises in transactional work is in many ways the business that has put the firm into the category of the full-service corporate Marquee Firms. Managing partner Rajiv Luthra and senior partner Mohit Saraf are presumed to be the sole holders of equity in the corporate partnership.
We understand that the corporate partnership has paid out full salaries to all fee-earners, including all salaried partners, on time and not announced any measures to date.
We also hear from sources that internally, the corporate partnership management has been cautiously gung ho about the potential opportunities for business in a Covid-world, though billings have obviously been hit at L&L corporate, as they have been at every firm.
The other three Luthra firms are the litigation partnership, which has as strong a brand as corporate in its own right as a litigation powerhouse, as well as a separate partnership that deals in intellectual property (IP) and one that does tax.
Luthra and Saraf are equity partners in both of those partnerships too, alongside litigation equity partners HS (Bobby) Chandhok, Vijay Sondhi and Sudhir Sharma.
Those three non-corporate partnerships, in contrast to the corporate one, have been having detailed deliberations at least since April about whether deferrals and cuts are required.
Early murmurs
Salaries in L&L’s IP and tax firm partnerships, for instance, had been due on Friday 1 May 2020, much like the corporate partnership but an internal announcement at the IP and tax partnership from senior partners, ahead of the 1 May date, had caused some early flutters amongst fee-earners that there might be cuts.
The email had announced that only 50% of retainer fees would be disbursed for now over the weekend, while those earning less than Rs 1 lakh would be paid in full over the weekend.
The balance would be credited after a town hall meeting, the email had noted, without specifying an exact date.
The email had added that “whilst we are certain that we will emerge well, and God Willing, soon, out of these difficult times, until then, the Firm seeks your cooperation and patience for delays in addressing any of your issue/s and concerns”.
We understand from several sources that the delay had in part been caused by the passing away of a family member of a senior litigation partner, with the traditional several-day mourning period having meant that the firm’s senior partners’ committee could not meet to sign off on releasing the full disbursements.
However, those issues were eventually sorted out on Monday 5 May, after a crisis meeting of the senior partners’ committee, which includes Luthra, Saraf and the three litigation equity partners, and full monthly retainerships were then paid out to the around 15 fee-earners each in the intellectual property (IP) and tax firm.
While there were some concerns back then that litigation was also considering a deferral, retainers there were eventually paid when they were due (which is on the 7th of every month in Delhi).
Discussions continued
As is to be expected (and has been happening in law firm management all over the country and, indeed, the world), such internal deliberations never did end though.
Specifically, evaluations of revenues had been ongoing amongst the firm’s equity partners, coupled with discussions about whether and what kind of cost-saving measures the litigation partnership would take, if any.
In part, the decision to now defer salaries in litigation had been made in light of the continuing cost of business of Covid, particularly on the litigation practice, which has meant pretty much a complete eradication of more profitable “outstation” work, except for in very urgent matters, for instance.
As many different strokes as folks right now
L&L litigation is not the first firm to feel and make the pinch.
First was near-pureplay advocate-on-record (AOR) Supreme Court powerhouse Agarwal Law Associates, which very early on had seen filing work fall off a cliff with shut-down courts, and had announced 30% cuts for fee-earners on retainers of more than Rs 40,000 per month, as we had first reported on 27 March 2020.
Many other top corporate firms followed, with the depth of cuts and measures varying considerably in each case:
- 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, while
- Cyril Amarchand Mangaldas has transferred up to 30% of fixed components into variable components and completely stayed equity partner drawings.
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NLUs can ignore my warning and advice at their own risk.
This is not to say your comment is otherwise useful or relevant to the issue at hand.
Get a life!
Luthra & Luthra - remember the world of today is not a place [...] I wonder if they even have POSH compliance and no Bentley doesn't count as POSH compliance.
Further there is no policy in place to define how claw back of cut portions would be done. This shows self centred and high handed nature of senior partners who have not only cut the retainership amounts retrospectively but also not made a policy regarding claw back. Not making such policy takes away the power from those whose retainership portion are cut and puts the senior partners in a position to dictate terms and ensure that they hold all the cards. Their whole agenda is to ensure that they make as much profits as they made during non-covid times. They have to fulfill this agenda cut retainership amounts (even when firm continues to make profits, mind you) and have also taken away JOBS OF TEN OFFICE BOYS, whose services should not have been terminated. They will go to all heights to get all the dimes.
Comrade - you are an insider at L&L and seen the plucking of the chickens.
Mr. Luthra is the best and according to what we heard, the process was absolutely democratic. The other senior partners also took pain in explaining the process and gave a fair opportunity. The very fact that people with salaries less than 1 lakh have not been touched shows the greatness of the firm.
Anyway, RKL has been on a cut salary move for over 4 months. He tried at Corporate and his facts and attempts got taken to the cleaners by Mohit, Bikash, Sundeep and Vaibhav. Was so embarrassed that for over 3 months has not slowed an EC to happen. Forced one at Tax / IP and had to back off within a day. But now has managed to reach his [...] by joining in an orgy of unethical and immoral behaviour schemed by B, S and V. Shameful. RKL is anything but best. [...]
What do they do?
He then set it down.
“Watch,” Stalin said, as he dropped small amounts of grain on the floor.
The bird began following him around the room, pecking up the grain.
“Do you see how that chicken follows me for food?” he asked his followers. “People are like that. Even if you inflict great pain on them, they will follow you for food the rest of their lives” And “That,” he told his follower, “is how you govern our stupid people".
Why retrospective? That in itself is absolutely SHAMEFUL.
Though on a more sombre note, corporate side (especially the performers) should rethink their relationship with RKL and litigation side. Both have been a drag for way too long. Just ask corporate side partners about the investment bank blacklisting. It was the most humiliating thing a law firm could encounter - reduced to being considered a dalal.
Between RKL and Mohit, the choice is not devil and deep sea; and even if so, devil is completely avoidable.
Anyway, happy tidings guys, we are happy to take a few.
But Mr Luthra, the only complaint, don't disrupt professional sessions with personal interventions like birthday and anniversary wishes.
And Mr. Saraf and other people from Luthra, you are also welcome to attend our sessions. Do share topics - happy to start with A, B, C for you guys.
Lol. What a firm!!!
Always happy to teach.. Do not hesitate to ask
Sorry we also learnt how to be a fool nonchalantly.
Don’t be a tool to RKL and the Luthra PR - smell the coffee. Stop smelling fuel burn from the Bentley and hallucinating about His Greatness.
This decision has just been imposed and imposed in very bad manner on all despite everyone agreeing to share the burden of downturn. But perhaps EPs know that there is nothing of that sort happening . No reasonable justification was given for rejecting such a reasonable suggestion. It was rightly put across to them by one of the EP during the discussion that the only objective to introduce this system is to protect profits. if they still went ahead shows the kind of mind set they have. In this difficult time they want a pie out of the share of their own leave alone.......
Guys, avoid thinking of coming here to L&L.
If no future grad has a job. They will do good work for the society and not go for slavish corporate jobs that hardly pay peanuts.
The Managing Partner is just hanging in there, to enjoy the perks for being a MP. Exactly what does he do? He keeps calling himself a satiated dictator - must be the Singapore influence- but this has clearly shown that he is not satiated for sure. He along with CSS has shown that they will stoop to any levels for their luxuries.
MS is no different either, he is now strategically publicly opposing the move. But he is also a partner in the litigation partnership, so why did he not give his comment to LI if he was opposing the move. Now his Chamachas and blue eyed boys are out to support him here.
RL you have let this firm be destroyed in your time as MP. You will now be remembered for greed not for having started a firm. This man won a law day award!!! He is a jagat friend but always doing charity with his partners, associates or KN s money.
Chandioke keeps saying he [...] believes in charity- [...] commiting daylight robbery from people less fortunate than him.
Other two partners, were no more than just names - [...] practically retired except for random flexing of muscles and fighting useless elections at firms expense!
Situation would only aggravate from hereon !
Corporate has voted 30 out of 31 present to disassociate with Lit senior partners in full. Partnership Deed examined and read in meeting. 1st but who is 31 here continues to hem and haw but as he so nicely puts it, ‘time to smell the coffee or whiskey’.
All good litigation guys (you know who you are friends) would be welcomed into L&L corporate with open arms. But the others also need not worry - we would take you in and teach you competitiveness and hard work. Bright days ahead for L&L as we all push in the same direction.
For the 3 rotten eggs and the Big Man who seems to be under the impression that he has played too smart - understand that we are a democratic generation. We strive for unanimity but settle for majority or even plurality. We would never settle for autocracy or as shown in the townhall, mobocracy. The firm is not just your life work, the firm is a collective. We all have to be taken together. Vetos or too-down high command culture won’t work.
Corp has atleast strived to consultations and democracy though it is still far beyond expectations since the consultations with other partners is still not as an obligation of management but rather at management benevolence. But it is there. Lit has nothing.
Rajiv and Mohit - make sure the solution to equity muddle is found soon else there would be nothing much left. Make equity a means to equitably channel wealth to all and decisions to all. Remove artificial baggages of superiority based on historical circumstances. As noted above, this is a different generation.
Stop your selfish agenda of trying to use this unfortunate situation to get equity- its never going to come to you. Earn it fair and square. This issue is bigger than you. It involves survival of people in these troubled times.
Go play your "i want equity" song somewhere else.
So [...] go wallow [...] where you are happy to not be burdened by the heavy task of decisions and choices. While, we who really care for the firm and ourselves, strive to show RKL and MS that this day has come because they failed to get more voices in.
They can rebrand as L&L but everyone knows what/who the L refers to. I mean, the firm can structure however it wants to internally, but it's a singular entity for outsiders. Therefore, if the MP for the firm doesn't remain the MP for a set of practice areas that come under the litigation senior partners, then what does that indicate other than a rift?
All of the EPs are equally to blame for this especially when the partners were amenable to a less drastic measure.
Fact is, they wanted to do this for a while and used the Covid situation .. rather milked it to their total benefit to the extreme detriment of others.
Very unstable firm. Clients are watching.
Both are great businessmen and good lawyers, but both need to talk less and do more. They have everything going for them and have built great teams and clients to mint moolah. Just stop having hours and hours of zoom calls, let people work and make money! Pick up the top litigation partners from mid size firms in Bombay. They are cheaper, smarter and know how litigation functions. For Delhi, you will have to build bottom up, but there's enough work to go around for even the dumbest. But please please stop yapping and go make some money! Otherwise, you're only making LI more profitable by providing fodder!
Easy to preach social justice when you.got the money.
A split in the firm is to no one's advantage (except rivals), and least of all to CSS.
Our firm has hiring plans.
We were waiting for L&L lawyers to apply. Waiting..
Please confirm
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