Companies of all hues – old as well new economy entities – seem united in aggressively beefing up their in-house legal teams. The post-pandemic frenzy of hiring has thus seen a key shift – more and more lawyers are gravitating towards taking up a corporate job rather than joining legal firms.
This is not restricted to entry-level jobs alone. In lateral hires, industry watchers say, one in five people is moving from law firms to corporates’ in-house legal teams. The ratio was one in 20 even six months ago.
Ritwik Lukose, co-founder and director of Vahura, India’s largest specialist legal and governance search and consulting firm, says, “If I were to put a figure to our recruitment business recently, it’s a 60:40 ratio, meaning 60% of our recruitment is for companies and 40% for the private practice law firms. The ratio was 10:90 earlier.”
A 2004 pass-out from the Bangalore-based NLSIU, the numero uno among national law universities (NLUs) , Lukose recalls that when he founded Vahura in 2011 as an exclusive legal recruitment firm, it was Big Law, comprising the tier-1 law firms including Khaitan & Co, Shardul Amarchand Mangaldas and Cyril Amarchand Mangaldas (the erstwhile Amarchand & Mangaldas), Trilegal and AZB which ruled the roost in legal recruitments.
“The scene is totally different now with corporates and unicorns setting up their own ‘internal law firms,’ ” Lukose says.
S Shanthakumar, vice-chancellor, Gujarat National Law University, attributes this tilt towards corporate legal teams to the fact that “nowadays there’s a lot of work being done by companies in the direction of dispute avoidance and regulation compliances rather than the conventional route of dispute resolution.”
Creation of in-house crack multi-speciality legal teams is thus rapidly on the rise. And while leading companies such as the Tata group, ICICI Bank
Not surprisingly, head hunters from these corporates are now making a bee line for the top 12-15 law schools and are also poaching lateral hires from big law firms. In fact, Shanthakumar says the premier university is all set to ink a MoU with Cognizant “to ensure adequate resources in the human resources department,” making it an early bird in the corporate sector to do so.
According to Aneesh Patnaik, who heads the litigation recruitment and consulting vertical at Vahura, the salary differential between Big Law and corporate in-house lawyers has come down to 10-15% from 25% not so long ago. Interestingly, freshers and young lawyers are exploring the non-traditional route of big corporates, legal clerkships, policy think tanks, legal entrepreneurship despite the lower salaries and the risk associated with startups and the going-it-alone ventures.
“The deal sweeteners with corporate hiring are the stock options and the chance to work with the founders and owners of the companies,” Patnaik adds.
Pankaj Agarwal, a top corporate lawyer turned legal entrepreneur who has done a long stint with SAM as former partner and head of Gujarat, avers, “The days of the pandemic have clearly shown corporates that at critical times, it’s difficult to depend solely on external team counsels. In-house specialised teams can understand and relate better to the various departments and meet their demands and expectations in a more meaningful manner.” From due diligence to mergers and acquisitions to inking mega deals to servicing the immigration requirements of employees moving to overseas facilities, in-house legal teams are the one-stop shop for most of a company’s requirements now.
The post Covid world has also brought into sharp focus work life balance, which too is being counted as a major factor in the movement of lawyers from law firms to corporates. Quips Patnaik, “A lawyer in a law firm is driven by the client’s time, while an in-house lawyer is a client himself and is therefore much more a master of his time.”
Neha Sharma, who heads a small boutique placement firm Avimukta feels the Covid pandemic has led to an acute shortage of talented lawyers in the market. “There’s actually a dearth of good candidates who fit the bill. While pre-pandemic it was not difficult to replace law firm lawyers, it’s becoming increasingly difficult now as most have either shifted in-house, or are moving to international law firms, going for their LLMs abroad or simply taking sabbaticals after the pandemic burn-out. Big law firms have to tone down their expectations from candidates,” she says.
Binu Nair, founder partner, Resource Front, a Bangalore-based small recruitment firm, sums it up: “What we are witnessing in the in-house corporate legal team space is a trend which is nowhere near its peak. It’ll take at least 10 to 15 years for this trend to start plateauing and unicorns are going to make sure that it remains a lucrative career option for lawyers.”