MUMBAI: Policy and regulatory work helped Indian law firms make up for the lower revenues from merger and acquisition deals, private equities and capital markets, according to RSG Consulting, a London-based research firm.
The research firm’s latest India report says that the rise in litigation and arbitration work has also fuelled the growth of boutique firms that have been able to pick up new clients without the resources required to support big transactional matter.
“Last year we thought growth would be stagnant, but when the year ended, it registered a growth of 18% revenue,” said Berjis Desai, senior partner of law firm J Sagar Associates.”Although areas like M&A, private equity and capital markets were down, what made up for it were policy, regulatory matters and dispute resolution.”
According to RSG Consulting, domestic M&A deals of Indian law firms fell 38% in 2012 in volume terms compared with the previous year, while outbound deals involving an Indian company acquiring a foreign target fell 37%. Inbound activity (foreign companies buying Indian targets), however, rose 1%.
It pegs the collective turnover of the top 40 Indian law firms in 2012 at $640 million.
“”Out of securities and capital markets, which is one practice area, 75% contribution came only from securities litigation. Likewise, litigation before the regulator in the areas of power and electricity, telecom, ports and Competition Commission also saw an increase,”” said Desai, whose firm employees over 260 professionals across the country. The firm declined to share details about its revenue structure.
Abhijit Joshi, senior partner and CEO of AZB & Partners, said, “The flip side of adversity is opportunity. When economic down cycle slows transactional activities, opportunities to grow other areas like anti-trust, litigation and franchising arise and we have tried to cease those very opportunities.”
According to the report, large companies by revenue had an average legal spend of over $10 million on external lawyers last year. The highest legal spend was by firms in media, telecommunications, banking and finance and pharma.
Some law firms have also increased their head count to cope with rising demand. “We have increased our strengths in various practices and attracted talent across corporate, capital market, tax, litigation, competition practices. We are not in the race to be a 500 lawyer firm, but we are always open for the right talent,” said Rabindra Jhunjhunwala, senior partner, Khaitan & Co.