India Business Law Journal’s 2018 billing rates survey finds that hourly fees across Indian law firms are up, rebounding to 2016 levels, but clients still call the shots. Vandana Chatlani reports
Hourly billing rates across Indian law firms have climbed, rebounding to match 2016 fee averages and in some cases surpassing these figures, according to a survey of Indian law firms by India Business Law Journal.
A quick scan of the results of the survey and the accompanying infographics show that the numbers matter as they provide a useful benchmark of legal fees in key Indian markets each year. India Business Law Journal’s 2017 survey had shown that rates fell noticeably across all categories based on data that included full-service giants and tiny niche firms.
Interestingly, however, higher fees this year haven’t done much to deter the negotiating power of corporate counsel. This, in addition to the tight competition among firms, means that while hourly rates are dearer this year, a client’s final invoice may look quite different.
“Firms in India tend to pitch aggressively to get work from companies,” says Ganapathy CB, executive vice president for corporate affairs and group general counsel at Himatsingka Seide in Bengaluru. “We have seen law firms cutting down pricing to almost half of their initial quote when informed about a competitor’s pricing. This is not a bad trend and companies tend to benefit from the competition.”
“In routine matters there is high competition and competing firms are known to drop their fees well below sensible charge out rates, just to get the matter on their experience statement,” says Shardul Shroff, executive chairman at Shardul Amarchand Mangaldas & Co (SAM). “This is a poor practice of the legal profession in India and for such firms, it’s a race to the bottom.”
LAW FIRMS BILLING RATES
“It is a buyers’ market in the legal field,” says Prem Rajani, managing partner at Rajani Associates. “Law firms grab what work comes their way and if that means undercutting of fees, so be it.”
So, while baseline fees seem to have risen, lawyers themselves still believe that firms are cutting rates to retain clients. Discounts are normally reserved for loyal clients or those who promise repeat work, but this is no longer the case, according to several observers.
“There is overcapacity in some firms and hyper competition,” says Cyril Shroff, the managing partner at Cyril Amarchand Mangaldas (CAM). “This has resulted in ‘de-premiumisation’ of prices except for a few firms, lawyers and niche practices. Law firms need to focus on profit, which only a few firms are doing.”
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