MUMBAI: A widening gap between hourly rates of Indian lawyers and their international counterparts is making the country an unattractive destination for foreign law firms, according to a soon to-be-released study.
The finding of RSG Consulting’s study comes at a time when the Indian government is planning to open the market for foreign law firms to boost economic activity.
Competition-led pressure on pricing has thwarted the potential size of the Indian legal market to $1.3 billion (?8,400 crore) in the year through March 2018, in spite of rising work related to goods and services tax, the report said.
More stark is that Indian law firms won only a little over half that amount, with the rest going to foreign firms that still can’t open offices here. “A majority (75%) said that India was less attractive as a destination to set up shop, even if the market opens, because of the current pressure on fees,” said Reena Sengupta, chief executive of RSG. The research firm publishes a report every alternate year ranking Indian law firms in an order which most lawyers trust. “Firms that did not discount quite as much in the top 6 were AZB and Trilegal,” she said.
At top law firms, hourly billing rates fell 8% to $992 on an average for senior partners and 39% to $615 for junior partners, the report said. This compares with the average fee of $1,200 by UK lawyers, who limit discounts to 15% on major transactions where the firms may have agreed on a fixed fee, said Sengupta.