Khaitan & Co equity partners and executive directors have taken a 20% cut on their take-home pay, reported Bar & Bench today, but without any adjustments of more junior staff or lawyers’ salaries.
We have reached out to Khaitan for comment.
Update 17:03: Executive director HR, Amar Sinhji commented: “This is a consensus decision by all equity partners & executive directors.
“The purpose is two fold: help with cash flows / build a short term war chest and ensure no salary cut / job loss below partner & senior leadership level.
“We are treating this as a voluntary contribution to the Firm and will look at returning the amounts during the course of the year or when revenues stabilise.”
Today, Cyril Amarchand Mangaldas has announced even deeper cuts than Khaitan’s: equity partners had reportedly volunteered not to take any pay, while anyone above Rs 25 lakh salaries per annum would be deferring between 10% to 30% of salaries.
To be updated.
Comments
Times are hard and most Firms will be forced to take up these measures. The glitzy offices you sit out of and the other resources available to you still need to be paid for and belt tightening will be the norm for some time to come. It is only a matter of time before the other big firms also come out and announce similar measures like CAM and KCO. In general it will be interesting to see how SAM, AZB, Trilegal and JSA react to these announcements. All Firms will look at trimming the fat at this time and it is possible that some Associates would be deemed surplus to requirements in the coming months if the situation does not improve - but that is the situation all around us in every company and industry at this time.
1. Most Indian law firms carry less risk on their books than their international counterparts. Here even associates salaries are subject to a 60:40 split. In UK - your bonus component is around months salary.
2. Most Indian firms have a large salaried non-equity tier who for want of options agree to pretty unfair terms. Asking partners to take salary cuts means that the salaried partners are effectively making a capital contribution but do not get to share in the profits.
3. Most large Indian law firms are dependent on foreign clients for a large chunk of their revenue. They anticipate that this revenue stream might dry out for this quarter. Firms that don't have significant depth in the Indian market (such as Trilegal) would be particularly hard hit. The impact will not be felt evenly.