The salaries and bonuses paid by India’s top corporate law firms to graduates from premium law schools have in many cases doubled in the past five years and now often top 1.4m Indian rupees (R) (£17,300) per year if bonuses are included.
One reason is that the growth of the corporate legal sector has pushed up salaries at the top and also the bottom.
Five years ago, Indian law firm Trilegal paid law graduates around R500,000 per year. Now the firm offers a base package of R1.08m per year, with bonuses taking this up to a potential R1.28m a year.
In 1991, Anand Prasad, co-founding partner of Trilegal, started his career as a junior lawyer in the courts on R750 per month. Those earning R2,000 per month were “considered to be doing brilliantly”, he said.
“People who had nothing else as an option would end up doing law,” he added. “Now it’s become a profession of first choice for many people. It’s about making sure we continue to get good talent when we hire people.”
Similar trends are reflected throughout India’s growing corporate law industry, which is largely removed from conventional litigation in courts.
The Mumbai office of AZB & Partners offers the highest base package, at R1.14m, to new graduates. Around five years ago it was closer to R600,000.
At Khaitan & Co, graduates are on R1.08m, increasing to up to R1.48m per year with a bonus. In 2006 it was R540,000.
At Amarchand & Mangaldas & Suresh A Shroff & Co the 2004 package excluding bonuses was just over R400,000. Now it is R1.05m, and with bonuses this is sometimes advertised to students as reaching almost R1.5m.
The trend is linked to the gradual improvement in the quality of legal education and law students, which began after the first young lawyers entered the workplace from the National Law School of India University in Bangalore in the mid-1990s. They were followed by those from other institutions such as Nalsar University of Law in Hyderabad, The WB National University of Juridical Sciences in Kolkata and National Law University in Jodhpur.
Between 2010 and 2011 alone, the numbers of law school aspirants taking the Common Law Admissions Test (CLAT) increased by 38 per cent to nearly 24,000, competing for fewer than 1,000 seats at 11 national law schools. In 2008 around 12,000 candidates took the CLAT.
Salaries rocketed following the increasing need of corporate law firms to attract these lawyers in a booming Indian economy.
In 2007 Luthra & Luthra started offering around R750,000 per year to law students from the top school, starting a minor salary war with Amarchand, which until then had been the top paymaster.
International law firms, unable to open offices in India due to local restrictions, have also been recruiting from Indian law schools to build up India-related expertise abroad.
This year, magic circle firms Allen & Overy and Linklaters, which offer more than R3m to new recruits, hired four students each from the top law schools.
Other international firms such as Ashurst, Herbert Smith and Norton Rose have hired between two and three graduates each, although before the global economic downturn those numbers were significantly higher.