Law firms push institutional pay reform

Shifting client demands and talent drive legal practice reform

- JYOTSNA BHATNAGAR

THE INDIAN LAW firm market is in the midst of an existential churn. Managing partners and senior leadership teams are reexamining longstanding operating models as firms attempt to evolve from loose federations of individual practices into institutions capable of outliving their founding partners.

For decades, most law firms operated on the familiar “eat-what-you-kill” model, where partners are compensated largely on the basis of the revenue they personally originate and execute. The firm provides the brand and infrastructure, but economic control—and often client ownership—rests with individuals.

Vasu S, co-founder of leadership and performance advisory Leverage, says the model creates predictable behaviour. “Partners control their own books. Client relationships belong to individuals, not the institution. Collaboration happens only when it aligns with personal economics, and talent development competes directly with billable work. The firm functions less as an integrated institution and more as a platform for individual entrepreneurship.”

That structure, once effective in a fragmented legal market, is increasingly showing its limits as firms scale and client expectations evolve.

At Shardul Amarchand Mangaldas, Managing Partner Pallavi Shroff acknowledges these constraints. “Pure individual models can spawn toxic control and partner fiefdoms,' she says. The firm follows a modified lockstep system, where partners at a given level are remunerated equally, with periodic resets based on performance.