Law Firms show Lollypop to Partners and Associates

MUMBAI. Experience of working as Partner in Law Firms has been a bad experience for many who were eyeing a share in the profit made by Law Firms. When Senior Manager of a Big 4 resigned and joined  a well-known Law Firm; he was promised moon by the Placement Agent who offered that the compensation of Rs 50 Lakh per annum was assured and as an Equity Partner; he can expect another 2 Crore per annum as his share of profit. But after working in Law Firm for 3 years he did not get a single penny as his share of profit. Though there was enough billing for expecting the profit; the expenses shown by the   firm in the Balance sheet were more than the income. Whether it was jugglery in accounting or were real expenses may be known only to the Auditor of the firm; but the firm itself had floated several firms and lot of money was being transferred from the firm’s account to other firms on account of expenses. The firm had also hired an ex-Income Tax Officer to take care of Income Tax issues.

  Even those Advocates who have passed out from NLS (National Law Schools) regret joining the Law Firms at one or the other stage as though they are squeezed for work but are not getting their “due” share of the profit or bonus which actually goes only to Founding Partners of the firms. Other Partners are merely Partners for using the term “Partner” in their visiting card or for inter-acting with the clients so that the clients have a feeling that they are inter-acting with senior people of the firm. An IRS Officer resigned and joined as Partner of a Law Firm on Package of Rs 30 Lakh plus bonus 3 and half year ago. He is still in the same bracket. While his counterpart who resigned and set up his own practice is making almost a Crore per annum in few years of practice.   

  The same is the condition of Associates who are overburdened with work and keep on expecting lollypop of bonus on the eve of Diwali and New Year. A Deputy General Manager of MNC left and joined a law firm on same compensation as he was assured by Placement Agent that he can expect Bonus equal to compensation. He was also told that since he will not be an employee in law firm; he will be subject to lower TDS at the rate of 10 per cent as Professional while as an employee of MNC he was subject to 30 per cent TDS. He was excited to get the offer but even after working very hard for 2 years he is yet to get any bonus. When he was in MNC he was not required to give minute by minute account of working to the Company; but in the Law Firm he is also required to give account for each and every minute so that the firm may bill its clients for the time spent by him.

  But thought of leaving Law firms or a Consulting Company and starting their own practice is also not rosy for Partners/Directors of the firms as when some of those who left and started their own found that when in the firm their charges for the clients were Rs 20000/- Per Hour; there was no work for them even at the rate of Rs 1000/- Per Hour. They were in a mistaken belief that they can still quote such hourly charges and get work. The clients were not paying for their name; they were paying for the name of the Company for which they were working.  That is why when a Partner of a firm or even a Big 4 is not comfortable in the Company; he tries to negotiate employment in other rival firm as he knows that what is his worth in a firm may not remain the same when he stands outside on his own.

  Moreover, once you are liable to pay EMI for home loan and luxury car; you cannot think of starting from a scratch. Those passing out from Law Schools and joining a Law firm may be gainers in short term as they are offered handsome packages but are losers in long term as they are unable to leave a secured job at a later stage and continue in the same status and the sword of firing is always hanging on their head. Those who start on their own since the beginning struggle in initial years but once they cross the phase of struggle; they command their own price and make much more money than Partners of firms. Thus they are real gainers in long term who never retire and leave their platform for generations. But it requires a lot of patience for someone passing out from a Law School as everyone prefers to become a “Corporate Lawyer” from day one. They should better read “The Associate” by John Grisham before taking a decision which is critical for their future. The choice is yours. Whether you want to earn for yourself or for others.

 

(Source: Allindiantaxes)

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1 Comment

  1. September 12, 2011 at 9:21 pm

    URL: http://www.injury-compensation-ireland.com/work-injury-compensation/
    NAME: Work Injury Compensation
    Human societies are always smart enough to tap onto whatever profitable pathways they see,
    and the same ideology has led to the opening of many Compensation Law Firms.
    The local newspapers are generally filled with reports about cases being contested by
    representatives from various compensation law firms so much so that any tourist scanning
    over the city newspaper supplements is bound to be a bit
    surprised by the prominent face of these law firms.


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