The search for specialisation and flexible fees is shaping law firm billing patterns in India, writes Vandana Chatlani.
India Business Law Journal’s annual Billing Rates Survey 2024 reflects changing expectations from both general counsel and law firms amid growing demand for specialised legal expertise, efficiency and cost predictability. Legal heads have expanded their teams, demonstrating clout by reining in substantial legal work that was once farmed out to private practitioners. Law firms are upping their game accordingly, developing practice and industry specialisations to command higher fees. They are also cognisant of general counsel attitudes towards flexible billing arrangements that provide better value for money.
Moksha Bhat, a partner at AP & Partners in New Delhi, notes that while “in-house teams are becoming larger and more sophisticated”, they are also willing to pay more for high-stakes matters such as disputes, investigations or strategic M&A.
“Substantial work is being done by in-house legal teams,” says Lalit Bhasin, the managing partner of Bhasin & Co in New Delhi, while Aditi Verma Thakur, a senior partner at Ediplis Counsels in Bengaluru, finds that “in-house lawyers increasingly handle most legal drafting and reviews internally”.
Of course, general counsel continue to seek legal support from external counsel. However, the bar for engagement and perceptions of “good value” mean law firms are competing to show their distinctiveness and worth.
Ashly Antony, the deputy general manager of legal at Sarjak Container Lines in Mumbai, says he would be prepared to pay a higher fee for lawyers who are “dedicated, loyal, hardworking and ready to go the extra mile”.
For Vardaan Ahluwalia, the general counsel and lead for advocacy at Premji Invest in Bengaluru, “the right balance between cost and quality outcomes” denotes good value. Turnaround time is also of vital importance.
“Delayed, but technically sound, advice has little value in a dynamic business environment,” says Ahluwalia. “Technically sound legal advice is a given. What sets an adviser apart is market best practices, industry precedents and an ability to deliver this as a package at a pace that matches the business’ needs.”
From Saurav Adhikari’s perspective, Indian firms “offer excellent value, especially when they have affiliations with law firms overseas to support them for specialist domain knowledge”. Like Ahluwalia, Adhikari, the founder and senior partner at Indus TLG Managers in Gurugram, believes “good value is good, relevant, actionable advice at a reasonable price”.
Flexible, innovative billing models
Billing practices are increasingly evolving, driven by the need for predictability and transparency in legal costs. While traditional hourly billing is still used, law firms are more likely to offer alternative arrangements to suit clients’ needs, or at least a combination of hourly and alternative fees.
Speaking about hourly billing, Adhikari says simply: “I don’t like it. There is no control or transparency.” Instead, he advocates for fixed-fee arrangements, which provide greater budgetary certainty.
“Without even giving it a second thought, lumpsum billing is what all GCs would want,” says Uday Goel, the senior legal counsel and company secretary at NCR Voyix in Mumbai. Goel’s team typically negotiates a capped fee based on a set number of hours. As work progresses and the threshold is nearing, the firm provides updates, ensuring that costs remain manageable and within budget.
In addition to attractive fee structures, general counsel also are mindful of exactly how their money is being spent. Gopal Trivedi, a partner at Chadha & Chadha in Mumbai, says “there is heightened scrutiny of legal spend, with detailed justifications expected for charges”.
Transparency and predictability are key priorities for general counsel, prompting firms to adopt more client-centric pricing strategies, says Rajiv Thakur, the COO of Lall & Sethi in New Delhi.
This is manifesting in different ways.
At the Chambers of V Anush Raajan in New Delhi, for instance, flexibility is favoured over a hybrid model of lumpsum and hourly billing. In an arbitration case in the infrastructure space, for example, says principal advocate V Anush Raajan, the firm’s client wanted a flexible billing method of hourly rates limited at the pre-litigation documents review stage, followed by a lumpsum model once the arbitration has commenced.
Dhruv Janssen-Sanghavi, the founder of Janssen-Sanghavi & Associates in Mumbai, adopts a similar approach. The firm uses hourly billing rates for advice and consultations, and premium fixed-fee arrangements, where its specialist knowledge adds greater value for clients, per appearance fee in lengthy litigation matters or, in rare cases, a retainer. For select clients, it offers “value billing”, where clients choose to pay whatever they believe is commensurate with the firm’s work.
Ameeta Duggal, a partner at DGS Associates in New Delhi, has observed general counsel segregating their work, whereby they pay a law firm’s asking rate for “big transactional work”, but use “significant bargaining power in other matters”.
Fees also vary depending on location and practice area norms. Manisha Singh, the managing partner of LexOrbis in New Delhi, says “regional variations play a significant role in pricing when it comes to tier 1, 2 and 3 cities”, while Shouryendu Ray, a partner at Nora Chambers in New Delhi, points to the growing prevalence of benchmarking in disputes where clients often compare rates among law firms. “This has resulted in relatively standardised pricing for dispute resolution services,” he says.
Of course, not all GCs are averse to hourly billing. Ahluwalia says hourly billing is fair and aligns well with his firm’s approach. “We typically work with law firms across the board who are disciplined with their timekeeping,” he says. “We prefer fortnightly time updates on all our live mandates. If the timekeeping is proper, hourly billing tends to provide the right value for the time being spent on deals and therefore works well for all stakeholders.”
The results
The results of India Business Law Journal’s 18th Annual Billing Rates Survey are based on an analysis of 50 participating firms of between two and 210 lawyers in Ahmedabad, Bengaluru, Chennai, Hyderabad, Indore, Kochi, Mumbai, New Delhi and Ranchi. We highlight our findings through a series of infographics throughout this article.
In the past 17 years, most of India’s highest-ranked law firms have refused to reveal their billing rates, citing discretion and confidentiality. This year, the larger firms that participated include ALMT Legal, Anand and Anand, IC Universal Legal, Khurana & Khurana, LexOrbis, MZM Legal, S&A Law Offices, Solomon & Co, and Spice Route Legal.
Hourly billing rates decreased significantly across the junior and senior associate categories, falling by 7.7% to USD142 and 5.5% to USD203, respectively. The junior partner category fell slightly, by 0.6%, coming to USD288 per hour.
Senior partner rates also increased marginally, by 0.5%, to USD348 per hour. The rates for managing partners saw the highest jump – a 7% increase to an average of USD458 per hour.
The average hourly rate for a lawyer overall saw a similar increment to the junior and senior partner categories, climbing slightly from USD278 to USD280 per hour; a modest 0.7% increase.
The case for TPF
The growing interest in third-party funding (TPF) for litigation, particularly for complex and high-cost disputes, has been an interesting talking point in India’s legal market. TPF gives businesses a chance to pursue legal action without the upfront financial burden, as external funders cover the costs in exchange for a portion of the litigation’s potential winnings.
Several lawyers believe that TPF could address a critical gap in the Indian legal system.
Sandeep Peters, the business development lead at Poovayya & Co in Bengaluru, believes TPF will be “a game-changer for law firms”, while Amol Girkar at Somandy & Associates says it is “definitely the need of the hour, particularly if this is insurance-driven”.
“At our end of the market, we have not seen extensive use of third-party funding of litigation – as of now,” says Mathew Chacko, a founding partner at Spice Route Legal in Bengaluru. “However, we expect this to significantly change – and that it will be a catalyst for increased efficiencies in the market for services related to disputes.”
“Not many in-house teams have deep dispute resolution expertise or the capital needed,” notes Ahluwalia. “So, there is certainly a problem that needs solving with a possibly large total addressable market. Initially, arbitration and enforcement of awards may be best suited for this.”
However, others are concerned about the absence of clear regulations and ethical issues including potential conflicts of interest for funders, and the risk of frivolous litigation.
Arihant Jain, the managing partner, Intelia Law Offices in New Delhi, says plainly that “we are not in support of litigation funding in India” in line with the view that legal services are “sacred services” and should not be turned into “expensive professional-commercial services”.
Aishwarya Nair, partner at MD&T Partners in Bengaluru warns that while TPF has the potential to democratise access to legal services, its implementation requires careful regulation to ensure fairness and transparency. “Funders may have conflicts of interest, having funded different types of litigation, which could compromise the outcomes of rulings and judgments,” she says.
There is also the matter of legal constraints such as the Advocates Act, which Shrikant Hathi, a partner at Brus Chambers in Mumbai, points out prohibits lawyers from sharing fees with non-lawyers, potentially conflicting with third-party financiers.
Speaking in a personal capacity, Thakur at Ediplis Counsels notes that the Supreme Court of India recently clarified that there is no explicit prohibition on third-party litigation financing by non-lawyers. Thakur says that TPF would not only provide financial resources to genuine claimants, but it would also open avenues for the development of a new legal industry in the country.
But even if the practice of TPF were well regulated, many argue it might not necessarily take off in India.
Vivek Daswaney, the founder of V Law Partners in Mumbai, wonders how many investors would be interested, considering how long litigation takes in India, “and the unpredictable nature of orders in various courts”, which makes it difficult to speculate on an outcome based on precedents.
“Given how long it takes to get meaningful outcomes in India, I don’t know whether financiers would be able to make a return on capital in the typical fund cycles that LPs [limited partners] of such funds expect,” says Nitin Wadhwa, the managing partner at Wadhwa Law Offices in New Delhi. “If there is patient capital that is willing to wait it out for seven-eight years, then it’s possible, but at this moment, I am not certain whether there is enough interest in place for financing Indian litigation, notwithstanding the limitation of law.”
Wadhwa highlights another factor – “the fact that Indian courts rarely award meaningful litigation costs”. Until that changes, he says, “underwriting litigation cost becomes a known deductible on outcome – it’s again atypical to global third-party funding structures.” TPF could work for foreign-seated arbitrations or outbound litigation involving Indian parties, says Wadhwa. “Overall, it’s a long, windy road.”
The impact of AI
Artificial intelligence (AI) is rapidly transforming the legal industry as general and bespoke tools are used by law firms and companies to streamline and automate routine legal tasks, such as document review and legal research.
Ahluwalia’s team uses an in-house NDA [non-disclosure agreement] analyser that is AI-based.
“This has resulted in zero reliance on external counsel for NDA review,” says Ahluwalia. “I see this happening a lot with other standardised documents in the future.”
Goel highlights the role AI plays in improving efficiency, noting that his company uses AI tools within business operations, although they have yet to be applied to the legal function.
Law firms are also exploring how to build efficiency and add value using AI. “We are very, very flexible as to the usage of AI tools in performing various tasks in the firm,” says Srinivas Kotni, the founder and managing partner at Lexport in New Delhi. “I have personally seen the quality of service delivery and the written communication of our associates improve after the various AI co-pilots have been released in the market. Better quality of work does definitely convert to better billing.”
Dipanshu Singhal, a co-founder at Bombay Law Chambers in Mumbai, says the firm is testing various AI software to help summarise long documents, assist in legal due diligence and arrange the data room. “We are also testing in-house a software to generate first drafts of documents, which we will implement after we are certain of the efficiency and accuracy,” says Singhal.
Naturally, the increased reliance on AI raises questions about billing and perceived value. Some clients, like Goel, argue that firms should not charge for work that can be easily generated by AI, such as basic contract clauses. “We expect a lot from law firms and value specialised services,” says Goel. “I won’t pay for something that can be generated by AI and reviewed by a GC.”
In search of specialists
Law firms that have developed strengths in niche practice areas are seeing returns. Rohit Lalwani, as an associate partner at AMLEGALS in Pune, has found that clients are increasingly willing to pay a premium for expertise in emerging areas like data protection and AI, “particularly in M&A transactions, where due diligence on data privacy is critical, and in intellectual property, where AI innovations require robust protection strategies”.
The trend towards specialisation is evident across several sectors. For example, companies are investing heavily in compliance, forensic investigations and fraud detection, according to Waseem Ismail Pangarkar, a senior partner at MZM Legal in Mumbai, who reports a surge in demand for legal services related to internal investigations and white-collar crimes.
Janssen-Sanghavi emphasises that contrary to the belief that clients avoid premium fees, many are willing to pay top rates for high-quality work, particularly when it comes from specialists who can deliver results efficiently.
Despite the growing demand for specialised legal services, fee pressures persist. Antony from Sarjak Container Lines expresses frustration with irregular charges such as clerkage and concerns about the additional costs of hiring multiple counsel.
Law firms themselves face challenges in managing client expectations around pricing. Several lament the constant undercutting of fees, including by the largest firms, to remain competitive, which greatly compromises profitability, especially for smaller and boutique firms.
