As discussions to allow foreign law firms into India continue, Rebecca Abraham assesses the health of the country’s legal market
In July 2012, a senior Mumbai lawyer remarked that the amount of legal work being outsourced to private practice lawyers was on the decline. As corporate India recovered from the financial crisis of 2009, it had begun building up robust in-house legal teams and, speaking to India Business Law Journal, the lawyer said: “Earlier if we worked on drafting, negotiation and opinion for one of the larger companies, now we may be only asked to provide an opinion”.
Four years on, the legal market has adjusted to the presence of strong in-house teams that provide an expanding range of services and are an integral part of the new normal. Private practice lawyers in many areas have continued to see their workloads shrink and some are attempting to win clients by undercutting each other.
However, none of this has dampened sentiment in the market. The overall outlook continues to be positive as most lawyers recognize a significant potential for growth, given the slow but steady expansion of corporate India and the increasing number of laws and regulations that companies of all sizes need to keep up with.
TAPPING INTO OPPORTUNITIES
So even as lawyers regularly speak of a price war in the market, there is talk of expansion and growth.
At Aureus Law Partners, a young New Delhi firm that specializes in tax advice, founder and managing partner Abhishek Dutta speaks of losing out on account of undercutting by the larger law firms and also the large accountancy firms, which have been making steady inroads into the market. Yet Dutta, who is typical of the many entrepreneurial lawyers who have set up on their own after working some years at a larger firm, takes pride in the strides his firm has made since it was set up in early 2014.
“We are close to 30 lawyers and are growing almost on a daily basis … we see big opportunities in the tier two and other cities,” says Dutta. The firm has expanded its footprint by setting up an office in Mumbai and one in Dehradun, the capital of the state of Uttarakhand, and while it currently serves clients in Bhopal and Haldwani by regularly flying lawyers there, in time it hopes to have a presence in these two cities.
Opening offices outside the largest cities, such as Mumbai, Delhi, Chennai and Bangalore, is unusual, but Aureus Law Partners is not alone in looking to the hinterlands of India for clients. Companies in these regions have long relied on corporate firms in Mumbai and Delhi as the lawyers who typically populate the smaller cities are litigation specialists and have little or no experience in corporate and transactional advisory.
This too may be changing. EK Nandakumar, managing partner at Menon & Pai in Kochi, says the firm has seen “a spurt in non-litigation work in recent times”.
Menon & Pai is recognized as the top law firm in Kochi, the capital of Kerala, where high court litigation dominates legal activity and lawyers who do only transactional and advisory work are unknown. Yet even here, the growing demand for the services of corporate lawyers is triggering “quite huge” opportunities, which firms such as Menon & Pai are looking to tap into.