India houses the world’s second largest legal professionals market with more than 600,000 lawyers. Although the Indian legal services sector is one of the most restricted of the largest markets, initiatives are now being taken to gradually open it up, for example by allowing foreign lawyers to visit India on a ‘fly in / fly out’ basis for rendering legal advice to their clients on foreign law. Also with increasing globalization and constant policy reforms in India, more and more international companies are now setting up outposts in India creating increasing demand for domestic legal services.
The total annual revenue of the Indian legal market for 2018 was US $1.8 billion and can expect considerable growth over the next few years, primarily on the back of growing inbound investments and M&A in India. Indian companies in turn are spreading their footprints globally through establishing subsidiaries and associations with foreign companies which opens up opportunities for Indian lawyers and law firms to expand their services globally. In recent years, there has been a growing demand for Indian-qualified lawyers in foreign firms especially in Singapore, Hong Kong, Dubai, and Tokyo.
In the past decade, Indian law firms have snowballed in terms of quantity, revenue, size and brand recognition, increasing their export potential in developed markets such as the U.S. and the U.K. as well as many developing markets in South East Asia and Europe.
Talent pool in India
The Indian legal system has high degree of compatibility with that of the U.S. and the U.K which is an advantage to Indian legal professionals looking to work jointly with international legal firms. Indian legal professionals are gaining strong reputations outside of their home market in domains such as international arbitration, international trade law, competition law, environmental law, outbound foreign direct investment and restructuring and insolvency, where domestic law firms have traditionally performed well.
In-house Legal Market
The growth of the in-house legal market continued in 2019 with ever-increasing team sizes, and more companies making their first in-house legal hires aiming to attract the best talent from private practice.
A big contributing reason for the increasing need for business lawyers is the overall maturing and increasing sophistication of Indian businesses. A significant push from the current government byways of regulatory and policy changes has encouraged growth in areas such as foreign investments.
Along with the growing need for in-house lawyers, the candidate talent pool has also expanded. Increasingly large numbers of lawyers are now choosing to switch from private practice, a trend that has now been noticeable for the last few years.
Experienced lawyers with 7-10 years of PQE are most in demand. Companies making their first in-house legal hires prefer to start at this level because candidates bring sufficient experience to guide a growing company while being within budgetary limits. Established companies have also targeted the same talent pool because experienced lawyers do not require constant supervision and can manage junior teams and small projects independently.
Several sectors continue to grow over the years, in particular financial services. Other key sectors forecast to grow are likely to be the retail, IT/ITES, e-commerce, start-ups, consumer goods, infrastructure and healthcare.
During 2019 we also saw an increase in private practice hiring. Private practice has always been a competitive sphere, but there was a deliberate effort from firms, big and small, to make positive changes for the lawyers working within the setups.
Increasingly large numbers of lawyers are choosing to switch from private practice to in-house, for a multitude of reasons but with work life balance being the most commonly cited by candidates we speak with. In response many firms have acknowledged the need to do more to look after the interests of their lawyers and introduced progressive internal policy changes aimed at establishing a healthier working environment and clearer career path in order to retain their best talent which had begun to defect to in-house roles.
As sectors such as tax, energy and projects & infrastructure (especially in power and renewable energy) have seen major growth, so has the requirement for dispute resolution experience in these areas. There has also been an increased demand for dispute resolution professionals specializing in tax and regulatory affairs.
India has high potential in legal services. Rising international trade, technology and globalization has increased the demand for legal services in the country. Indian law firms, in-house firms and individual lawyers of India have huge expertise in providing legal services which need to keep track with evolving legal services sectors such as power contracts, project finance initiatives, transnational investment and joint ventures, Legal Process Outsourcing (LPO) and technology transfer contracts. Legal outsourcing, both onshore and offshore, is also transforming the market as law firms and corporate legal departments seek to minimize costs, increase flexibility and expand their in-house capabilities.
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Contributor: Mudita Valakati
Editor: Sam Kenworthy