A climate of competition has kept legal fees stable as lawyers strive to provide certainty and prove their credibility. Vandana Chatlani reports

Over the years, clients have become sophisticated buyers of legal services in India. Spoiled for choice as law firms mushroom across the country, clients know they can demand more, tapping the brightest legal advisers while negotiating for the best price.

Clients have visibly become “more goal and objective-oriented”, says Gautam Khurana, the managing partner at India Law Offices. Khurana notes a new degree of efficiency whereby clients are showing “greater clarity, quicker decision-making, and a focus on objectives as compared to the past”.

Having built their own robust internal legal teams, general counsel know exactly what they want from external counsel. Law firms are expected to demonstrate deep industry knowledge; to go beyond paper pushing to provide commercially savvy, holistic advice; and to explain precisely how they have used their time before drawing up a billing invoice.

“Justifying billable hours has been the biggest challenge,” says Sudhir Ravindran, founding partner at Altacit Global in Chennai.

Bhushan Shah, a partner at Mansukhlal Hiralal & Co in Mumbai, shares a similar view. “Clients are not agreeable to the time spent,” he says. “They believe it should be a lot less.”

All of this has forced law firms to automate, digitise and streamline their processes, creating an airtight, clear and measurable solution to quantify their work. Some have harnessed existing technology while others have designed systems to suit their needs and practice specifications.

“We have opted for our own customised billing software based on MS Navision,” says Manisha Singh, a founding partner at LexOrbis in New Delhi.

Mayank Arya, the chief operating officer at Ashwathh Legal in New Delhi, says his firm realised early on that installing a robust electronic system was imperative to forestall disputes around fees. “So in the last decade itself, we went for full digitalisation of our records and moved towards a 100% paperless office,” says Arya. “We have our own in-house legal database management and billing software, which has helped us in overcoming billing challenges.”

Openness and honesty are crucial, says Anupam Prasad, the managing partner of AP Law Chambers in Mumbai. “For a new and young firm such as ours, it is less about the fees per se, and more about convincing clients of the value proposition that we bring to the table,” he says.

“We have been extremely transparent and sincere, as there have been instances where we have charged less than agreed, as the effort required from our end was less than originally envisaged. We believe in the simple philosophy of treating others as we would like to be treated, in a professional manner, and I assume this has led to a steady flow of work.”

PEAKS AND TROUGHS

Legal fees in India have also been impacted to some extent by the strong dollar and rupee depreciation. Those who spend in rupees and predominantly serve domestic clients have been largely unaffected, while others working on cross-border assignments or representing overseas clients have benefitted.

“Dollar billing rates have gone up substantially,” says Sameer Tapia, founder and senior partner at ALMT Legal in Mumbai. “As such there are no major billing challenges to the firm, as we bill foreign clients in USD and GBP, depending upon which country they originate from. We usually find that it is convenient mostly to raise fee notes in USD, GBP and EUR as opposed to any other currency.”

Kamala Naganand, the managing partner at Aarna Law in Bengaluru, operates similarly and says: “We are moving to bill in dollars as much as possible.”

Arya says that although the strong dollar has certainly driven up profits, “a depreciating rupee is not a good proposition as a whole and has affected us in other areas”.

Most lawyers are convinced the rupee will bounce back and that the current situation is only temporary. “This will not be permanent and the rupee will stabilise,” predicts Smita Singh, a partner at S&A Law Offices in Gurugram.

More permanent factors affecting billing structures include client loyalty, partner involvement and the complexity of a matter.

“Prices get impacted owing to relationships and competition,” says Rajesh Narain Gupta, the managing partner at SNG & Partners in Mumbai. “Established firms don’t negotiate much, and if clients are looking for quality and a particular firm, the negotiation is restricted.”

Ishita Dasgupta, vice president of strategy at Spice Route Legal in Bengaluru, adds: “At the top end of the market, we do not see any pricing pressure.”

Umesh Ramchandran, head of commercial excellence at Cyril Amarchand Mangaldas in Mumbai, says prices have increased significantly, especially post-covid. “Rates which were stagnant for many years are now being revised across all law firms, taking into account increasing inflation and cost pressures.”

Arya believes that although rates have increased, they are “low and justifiable given the quality of work being provided by Indian firms”.

The increasing proliferation of law firms has led to stiffer competition in legal circles, says Gupta. Clients are willing to pay pre-covid fees, he says, however, they expect face time from senior lawyers in return. “Client loyalty is still there, but price points and availability of partners for the transaction have become important criteria.”

Dipti Lavya Swain, the managing partner at DLS Law Offices in New Delhi, concurs and adds that “while clients continue to request discounted pricing, they are generally willing to pay the rates that are asked for”.

For others, the story is somewhat different. “Rates are by and large stationary and are not increasing,” says Neeraj Jain, a partner at Vaish Associates in New Delhi.

Seema Jhingan, a founding partner at LexCounsel in New Delhi, says her firm generally kept rates static “due to the recent years of economic difficulties, and for better engagement”.

Dipanshu Singhal, a co-founder and partner at Bombay Law Chambers, argues that “there is significant pricing pressure on all law firms regardless of their tier or position”, with clients seeking more fixed fees for their matters.

“There is a desperation to get work at the large firms,” says Naganand. “They are undercutting the competition on prices.”

PM Thimmaiah, a partner at MD&T Partners in Bengaluru, has seen a rise in requests for lump-sum fees, fees based on capped hours, and blended rates so clients are better able to assess their legal spending (see Alternative fee structures). “More often we charge blended rates for associates and partners, which makes the per-hour rate for different ranks of lawyers irrelevant,” says Thimmaiah.

Brus Chambers and Bhasin & Co both routinely use the blended fee model. Brus Chambers charges USD126 per hour based on hours spent by the lead lawyer or partner involved, and clients are required to spend a minimum of USD756 plus disbursements on actual. Bhasin & Co offers a flat firm rate of USD250 per hour based on hours of the most senior lawyer involved.

“Law firms are trying their best to retain clients by charging the same or giving substantial discounts to remain in business,” says Krrishan Singhania, the managing partner at K Singhania & Co in Mumbai.

Billing rates also often come under pressure when government entities are involved. “All public sector and government companies with large research and development departments in India empanel intellectual property service providers based on bidding or RFP [request for proposal] processes and that results in the further lowering of fees,” says LexOrbis’ Singh.

Even after offering the best rates, law firms sometimes encounter difficulties when settling payments. Lawyers say clients routinely delay payments, present complicated billing guidelines from their companies, renegotiate mandated rates at the last minute and shop around for even the smallest piece of work. Many admit collection, particularly from Indian clients, tends to be a challenge.

“Late payments create a backlog on cash flows, so we have been trying to work on an advanced fee model to overcome this challenge,” says Srinivas Kotni, the managing partner at Lexport in New Delhi.

“One of our major concerns comes up in litigation-related billing and how to bill for hearings where the court was not functional or matters don’t reach,” says Khurana. “We overcome these issues by being flexible on billing with the client.”

THE RESULTS

Against this backdrop, we present the results of our 16th annual billing rates survey. The survey is based on an analysis of 64 participating firms of between one and 750 lawyers from Ahmedabad, Bengaluru, Chandigarh, Chennai, Indore, Kochi, Mumbai and New Delhi. We highlight our findings through a series of infographics throughout this article.

In the past 15 years, most of India’s highest-ranked law firms have refused to reveal their billing rates, citing privacy and confidentiality. Others highlight the discrepancy between published rates and actual fees charged for numerous reasons.

Lawyers have also stipulated that pricing can vary not just across firms, but even within an individual firm. Lawyers have cited instances where partner rates may vary even if those partners operate in the same city, office and practice area.

“I presume that there is a lack of uniformity in pricing with most law firms – and that willingness to discount, if the matter is interesting enough, might lead to a perception that there is a discrepancy between the published rates and actual fees charged,” says Dasgupta. “In our case, all cross-border work and most important matters for large Indian corporates get billed out at the rates specified (see 2022 billing rates) although we do offer discounts of between 10%-15% for clients with whom we have a longstanding relationship.”

Dasgupta adds that Spice Route Legal offers significant discounts for startups and small and medium-sized entities, work that is strategically important, and work for charities and not-for-profit organisations.

India Law Offices also reduces its fees in certain circumstances. “We are happy to consider considerable discounts for clients who need our services and genuinely cannot afford to pay the cost, clients who have interesting and socially relevant projects and, in some cases, we offer 100% pro bono services,” says Khurana.

An increasing mix of billing models has also led some smaller firms to refrain from taking part in our survey on the basis that an hourly rate is not reflective of the fact that the majority of their work is done using lump sum or fixed fee structures.

Others still believe in the merit and profitability of hourly billing. ALMT Legal, S&A Law Offices and Bombay Law Chambers all estimate that 90% or more of their total billing is based on hourly rates, while for IC Universal Legal, Hitesh Soni & Associates, AP Law Chambers and MD&T Partners, 70% of their total billing is done using the hourly model (see Hourly v alternative billing).

“Even in a competitive environment, clients are ready to accept hourly billing if they are sure of the quality of work that a lawyer or law firm will offer,” says Smita Singh, of S&A Associates.

Others say there is an increasing demand for fixed fees.

While these perspectives are important and shed light on the discrepancies in billing practices, India Business Law Journal’s survey continues to offer a benchmark for legal fees considering variations triggered by global and local economic challenges, market competition, sophisticated legal spending, and the desire to attract marquee clients. As with previous years, the figures published must be viewed carefully, since partners and in-house counsel highlight a continuing trend of negotiations, capped fees and alternative billing models that can alter final invoices.

The inclusion of Cyril Amarchand Mangaldas (CAM) and Anand and Anand in our survey indicates an openness and commitment towards transparent billing among the elite tier of law firms. We hope their participation inspires others to share their rates in the years to come.

While the billing rates shared by CAM will differ from its peers due to its legacy and bench strength of 750 lawyers, they offer an insight into pricing at the higher end of India’s legal market. With more than 100 lawyers, firms such as Anand and Anand, ALMT Legal, IC Universal Legal, LexOrbis, S&A Law Offices and SNG & Partners provide an idea of the fee structures at larger firms. However, our survey best captures the trends across mid-sized and smaller firms, which make up the majority of participants.

Hourly billing rates fluctuated across seniority with declines in the associate categories and increases across partner ranges overall.

The average hourly rate for a lawyer rose slightly, by 1.2%, from USD268 to USD271 per hour. The sharpest increase appeared in the managing partner category, where the hourly fee jumped 7.9%, from USD406 to USD438 per hour.

The hourly rate for a junior partner climbed 3%, from USD263 to USD271, while the senior partner rate saw a modest increase of 2.1%, from USD332 to USD339. The average hourly rate for a junior associate remained almost the same, falling by just USD1, from to USD146 to USD145 per hour. Meanwhile, in the senior associate category, which saw the sharpest rise last year, there was a minor fall in rates by 2.4%, from USD204 to USD199 per hour.


ALTERNATIVE FEE STRUCTURES

LAWYERS SHARE EXAMPLES OF DIFFERENT BILLING STRUCTURES AND STRATEGIES

In addition to hourly billing, we also work on a fixed-fee basis, creatively designed and tailor-made for clients depending on the complexity and nature of matters. We closely estimate how much time and effort may be needed in each case. The scope of work is then divided into smaller pieces to accommodate clients to pay only for what has been served to them.

Arihant Jain, managing partner, Intelia Law Offices


For small and medium-sized enterprises, we provide discounted rates. On most matters, we are also able to effectively estimate the time that might be spent on matters and provide capped fees.

Ishita Dasgupa, associate vice president of strategy, Spice Route Legal


Our unique retainership model allows clients to carry forward all unused hours for future use. General counsel rely on such flexibility when working with us.

Anandaday Misshra, founder and managing partner, AMLEGALS


We offer lump sum mandate-based billing, besides billing based on a capped amount. In arbitration matters we have billing arrangements based on the courts in which we appear and the stage of the matter.

Ravi Singhania, managing partner, Singhania & Partners


Clients do not expect surprises and that’s why most firms are moving to flat fee structures. We have converted almost 75%-80% of our services to this billing model except for high-end advisory or big-ticket litigation, which can give rise to multiple proceedings.

Manisha Singh, partner, LexOrbis


We charge a fee per hearing in the courts for litigation and arbitration, and use stage-wise billing for all compliance and defined corporate advisory work. We also work on a monthly retainer basis for clients who have opted for a suite of legal services from the firm.

Gautam Khurana, managing partner, India Law Offices


Most of our legal services are offered on a fixed-cost basis.

– Aashish Srivastava, partner, Equicorp Associates


We note a distinct shift from hourly billing rates as clients are increasingly seeking pre-agreed fees or at least blended rates.

– Ameeta Verma Duggal, partner, DGS Associates