FoxMandal Little’s Delhi office has paid its fee-earners the salaries it owed them, after the firm was unable to pay for two months due to cash flow difficulties.

Late salary payments are nothing new for some lawyers.

“It’s a regular feature at some firms and the reason is that the managing partner might not feel like signing cheques on some days,” muses one Delhi partner.

FoxMandal Little has not been able to pay fee-earners in Delhi their salaries as the office faces a liquidity crisis.

Long delays in recovering fees has become an increasing a problem for law firms whose clients are caught in the credit crunch, most recently preventing FoxMandal Little in Delhi from paying some of its staff their salaries.

“Lock-up is a big issue for most firms these days in particular collections on long-overdue invoices,” says Kerma Partners legal consultant Friedrich Blase in New York and adds: “It’s become harder for firms to collect on the work produced.”