Byline: Paramita Chatterjee

NEW DELHI: These may still be early days for foreign law firms to set foot in India, but they sure are shaking up the legal fraternity here. Top foreign law firms like Clifford Chance and Allen and Overy are stocking up on Indian talent, thereby effecting big

Fearing attrition in the industry, domestic law majors like Amarchand & Mangaldas & Suresh A Shroff & Company (AMSS) and Jyoti Sagar Associates are retaining talent through fatter paychecks-some going up to even 100%. Others like Luthra & Luthra Law Offices and Dhir & Dhir are doling out mid-term hikes.

And those that are not offering immediate ad-hoc increments are giving year-end bonuses and promotions. For instance, Kochchar and Co has already promoted 12 lawyers in the last three months across India.

Though current rules don't allow foreign law firms to open offices in India, they are recruiting domestic lawyers for their overseas offices. Once they are allowed, salaries in Indian law firms will zoom further, say experts.

Already, AMSS has given unprecedented hikes across the board. While first-year associates at AMSS-fresh out of law schools-draw Rs 12 lakh per annum, senior and principal associates get between Rs 35-80 lakh. "The pay hikes offered now only suggest that flush times are here in India and the firms are doing much better compared to 15 years back," AMSS managing partner Shardul Shroff told ET.

Incidentally, this increased competition and skyrocketing salaries in big firms are having a domino effect on mid-sized firms. Their situation looks simple enough: revise salaries or lose people.

Says Dhir & Dhir Associates partner Alok Dhir: "We are facing mammoth pressures for increase in salary and are forced to give mid-term increments ranging between 25-30% to critical workers."

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Incidentally, these developments are transpiring in a profession that has traditionally been hardly lucrative for employees. Industry experts say law firm salaries have zoomed ten-fold compared to 10 years back. Back then, a mid-level associate with three years of experience in a mid-sized law firm could not have dreamt of demanding an annual remuneration of around Rs 5 lakh.

All that is history. Luthra and Luthra's decision to give an ad-hoc raise to its lawyers is a first. It is all set to announce a pay hike of 30-70% by this year-end. "This round of pay hikes for associates marks the first time in our firm," said founder and managing partner Rajiv K Luthra.

Within law firms too, there are distinctions. Corporate lawyers working on transactionary services are earning more than their litigation counterparts. Also, many law firms have reported a steady supply of high-priced litigation and other corporate work, boosting their revenue-to-record levels in the past two years alone.

According to industry experts, once foreign law firms are allowed to open offices in India-there are talks of Clifford Chance wanting to set up operations-salaries in Indian law firms will zoom further.

Already, the average salary of a mid-level associate in top law firms compares well with that of an MBA. The quality of lawyers too has risen in recent years, thanks to the country's specialised law schools.