As the coronavirus pandemic continues in India, the country’s three largest firms by headcount have announced changes to lawyer salaries.

Cyril Amarchand Mangaldas, India’s largest firm, has said that 20-30 percent of the fixed compensation of the salaried partners will be moved to variable compensation for this financial year, according to a report in Bar and Bench. For principal associates and senior associates, that number will be around 10-15 percent. The firm has decided against effecting job cuts and salary cuts.

In the case of Khaitan & Co., India’s second-largest law firm, equity partners and executive directors have voluntarily agreed to take a 20 percent monthly pay cut effective from this month. The firm also said that there will be no job losses for the time being.

“The larger purpose of this decision is two-fold: to help with short term cash flows and build a war chest for the next couple of months, thus ensuring that we have no salary cuts or job losses below the partner and senior leadership levels,” said Amar Sinhji, the firm’s executive director for human resources.

“We are treating this as a voluntary contribution to our grim situation and will look at returning the amounts during the course of the year or when revenue streams stabilise,” Sinhji added.

Shardul Amarchand Mangaldas (SAM) has said there will be no pay cuts, but at the same time, variable compensation payment will be deferred.

According to a statement from the firm: “Where lawyers are eligible to variable compensation, it shall be calculated taking into account the performance of the firm and be paid in equal tranches, in March 2021 and the first half of financial year 2021-22.”

“Any adverse impact of the firm’s performance would be largely borne and absorbed by the equity partnership of the firm,” SAM added.

Meanwhile, firms like J. Sagar Associates and L&L Partners have said that currently there are no salary or job cuts and the variable compensation will not be deferred. 

Hitesh Kalwani, vice president, L&L Partners, said, "Till date, L&L Partners has paid its associates, partners and employees the same amount as they were being paid before the pandemic and the firm has not taken any decision to reduce salaries or restructure fixed and variable components of the retainers. However the firm is keeping a close watch on the impact  of COVID on its various lines of practice.”

Meanwhile, JSA's joint managing partners, Amit Kapur and Vivek Chandy, emphasised that in addition to not changing the pay structure, the firm also honoured the hires made during this time. "JSA has honoured all job offers including lateral hire of a team to strengthen our Hyderabad office. We have taken on 18 attorneys in this financial year," Kapur and Chandy said. "The leadership team is regularly monitoring the situation and we are hopeful of riding out this storm without causing harm to our people.”

Besides Indian firms, International firms have also been affected with this crisis resulting in some firms announcing a temporary change in the pay structure. For example, Ashurst has announced a 20 percent reduction in the monthly salaries received by partners for the next six months. In addition, regarding bonuses, eligible staff will receive 50 percent of bonuses in July while the remaining will be paid in November.

And in the case of Norton Rose Fulbright, the firm’s Europe, Middle East and Asia offices have offered lawyers the chance to reduce their working week by 20 percent in return for an up to 20 percent cut in base pay.


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