Corporate Sector in India Pays Exorbitant Legal Fees

legal-fees-jokeThe legal fee market has exorbitantly increased especially in the last two years. India’s corporate sector has paid $ one billion as legal fees last year. The leading and top most law firm like Amarchand and Mangaldas and other leading firms such as azb partners, Khaitan & co, Luthra and Luthra, j Sagar associates etc are earning around 77% of the total fee which is 1.07 $ by India inc. The remaining 23% of the fee is paid to the foreign firms for their foreign legal advice. This is according to the report by RSG consulting. Around $ 500 million was spent in the year 2010 and in 2012 it has reached one billion.

Filing a case and going through all the court procedures is both an expensive as well as time consuming process. Even though there is a pressure on the fees and high rate are charged, the charge rates have declined in 2011. In 2011 the hourly rates paid to senior partner were $374. Now this has reduced to $359. For the junior partners it has fallen from $239 to $186. Now a days the top law firms have also started working on a fixed basis for the companies in the corporate sector.

Things have changed and tri legal appears to be the only firm with client satisfaction. Among the top six firms. The big law firms received lower scores in client satisfaction.

The sectors which paid the highest amount of fees are the telecom industry, media, banking and finance and the pharmaceutical sector.

The increase in the litigation and the arbitration activity has increased the legal fees paid to the top law firms. According to the report by the RSG consulting Amarchand and Mangaldas tops the list followed by AZB Partners, Luthra and Luthra, Khaitan & co, j Sagar etc.

In 2011, India’s biggest private firm had to pay Rs 654 crores for the case of supplying gas from d6 in the Krishna Godavari basin. The LIC housing finance bribery case, the 2g spectrum scam etc are other cases for which a big amount of money was spent. The corporate sector also pays $2000-$ 10000 fixed day rate for the leading advocates of the Supreme Court.

According to the reports of RSG consulting India is still under layered. There is a shortage of good quality lawyers.

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