What is the most attractive, glamorous, well-paid profession as a lawyer?
There are a lot of options. However, in college, I knew only one.
Getting a corporate law job at a top law firm was considered the most attractive career option after graduation.
Forget college, even the school students appearing for the CLAT examination know about how much salary which corporate law firm pays to freshers!
Even before law aspirants get into law college, they hear stories about how big law firms pay INR 1.5 lakhs per month to fresh graduates.
Many people aspire to be corporate lawyers.
They want to get jobs that pay well and bring recognition of working with top clients and provide security.
Not only law students but a lot of litigators also want to switch to corporate law firms if given a choice. There are also judges, IAS officers who have left their jobs and joined corporate law firms.
How can you get such a job?
That is the wrong question to ask.
For the right solution, we must ask the right questions. So, your first question should rather be this- “What work do corporate lawyers do?”
This may lead to further questions like these –
“What would a day in a corporate law firm look like?”
“Who will I report to? What does the hierarchy look like?”
“What would take me to survive and succeed at the job? What would it take to grow in such a job?”
“How will my responsibilities change over time if you grow within a corporate law firm?”
“Who would be my clients and what do they expect from me?”
These are important questions to ask and find answers to.
This can be Step 1 for you to start exploring the questions as well as the answers.
Read on if you:
- Want to work as a corporate lawyer;
- Want to switch to corporate law from litigation; or
- Are planning to sit for a corporate law interview anytime in the future.
Before we delve into corporate law work at law firms, let us look at what are the different types of law firms available for you to work with.
What are the different kinds of law firms?
Full service v. Boutique
Full-service law firms provide service across all practice areas of law.
These are generally big firms in size, though even small firms can be full service too.
Some of the well-known examples are Shardul Amarchand Mangaldas, Cyril Amarchand Mangaldas, Khaitan, Trilegal, Fox & Mandal, etc.
Boutique law firms are limited to one or more highly specialized practice areas.
Usually, they are not as big as full-service law firms, and their unique selling point is their expertise in one or two specific areas. They often add additional practice areas when they become sufficiently successful in one practice area. Some of them even try to become full service later. However, remaining a boutique is not a bad business strategy. Sometimes boutique practices are overall small but highly profitable and margins are a lot better than full-service law firms. This is why large law firms are always on the lookout for acquiring highly profitable robust boutique practices.
Some notable boutique firms are AK Law chambers (Dispute resolution), Remfry & Sagar (Intellectual property), Ikigai Law (Technology), etc. Boutique law firms may even charge more than the well known full-service law firms as they command special expertise in that area.
Tier-1, Tier-2, etc.
It is a common practice to classify law firms as tier-1, tier-2, tier-3 etc, and we do not quite know where the tiers end. Are there 4th, 5th, 6th or 7th tiers? Hard to tell as there is no reliable data. Beyond tier-1 and tier-2 things are quite unclear.
Which tier a law firm belongs to is a matter of market perception, as profits or revenues of law firms are unknown in India unlike say in the UK. So the market perception of how elite or successful a law firm is would often be formed by salaries paid to retainers (especially at entry-level because the rest is not transparent), team size, how many locations they serve, the volume of deals handled etc. On that basis, the firms may be classified as tier-1 law firms, tier-2 law firms, etc.
Some law firms are widely considered to be tier-1 law firms. Others are not considered tier-1 though they may claim that they are tier-1 in a specific practice area.
There are some law firm guides that provide such rankings too, but they are highly suspect because they take money from the firms they are ranking and no matter how much they claim that their rankings are objective, when you delve deeper it’s hard to feel convinced.
I feel that campus placement & salary paid to freshers have a lot to do with how the myth of Tier-1 spreads in the market. For example, is an IndusLaw or NDA tier-1 law firm? Why not? I suspect if they start hiring from top NLU campuses on Day-0 and pay slightly more than what other law firms considered tier-1 are paying, they would be considered tier-1 as well in a matter of a few years as a cross-section of law graduates start to see them as tier-1, and carry and the perception to the rest of the legal industry.
We saw this happening with Trilegal and JSA between 2008-2015.
However, paying those salaries/ retainer fees at a fresher level will require law firms to pay even higher to more senior lawyers, which is difficult unless economics support it. So it is perhaps not such a bad indicator of how well a law firm is doing.
What if you want to change law firms? Is it possible to move from a small law firm to a big law firm later?
Starting your career with a smaller law firm is great as long as you get to do good work with a good boss.
What kind of senior you work with is more important in my books.
Is your senior respected for his work, is she proud of what she does, does she have high standards? Does he have a vision? If not, I will be worried more for you even if you work in a famous big law firm.
It is possible to move from a small law firm to a bigger one. Good professionals often switch from smaller firms to bigger firms as large law firms want to attract talent from smaller firms with more money.
However, there are some things to consider.
Working at a bigger law firm is no guarantee of success.
Smaller law firms might allow you to develop your own brand & be more supportive of you building your own clientele. A big law firm often works to prevent that from happening because they are afraid that you can then walk away with their clients.
You are more likely to make more money if you own your brand & your own clients in the long run, whether you work at a large law firm or a smaller one.
A young partner in a smaller law firm with their own clientele, business development responsibility & reputation make more money than their counterparts in the big law firms who do not have those things.
What are the different practice areas in a law firm?
Here are the prominent practice areas of corporate law. Corporate law practice usually refers to transactional law practice and does not include areas like corporate litigation, insolvency & bankruptcy, or niche areas like insurance and intellectual property.
General Corporate, M&A and Investment
Most well-known and profitable transactional practice, dealing with transactions such as mergers & acquisitions, takeovers, joint ventures, etc. The same team can also be looking at investment transactions, working on investment deals such as capital investments by private equity firms, venture capitalists, strategic investors, etc.
Banking and Finance
This area of practice deals with debt finance and lending transactions. Usually, large law firms have big banking and finance teams working on numerous term loans and financing deals. They also handle securitization or debt restructuring. Growth of the economy requires growth in credit, and banking law as a practice area has a very bright future.
Projects practice in a law firm deals with large infrastructure projects like the construction of highways, airports, power plants etc. Bigger projects involve a lot of structuring and multiple transaction documents. For example, if a flyover is being constructed, it may be done through a public-private partnership and so the law firm may need to facilitate the formation of a new entity, draft concession agreements, and so on. A number of different permissions or approvals are often required for a project from a multitude of regulators and government departments. The lawyers in this team assist in securing such permissions as well.
Such big projects as we discussed above need financing from banks, NBFCs, government, and private financial institutions. Project finance lawyers take care of all transactions related to securing finance for infrastructure projects.
This involves setting up and compliance for alternative investment funds or hedge funds, angel funds etc. which invest into various ventures. These funds raise investments from a set of limited partners and then invest in different companies to earn returns from increase in the value of such companies. Fund formation is a specialized area within law firms. With the growth of PE and VC industries, this is rising in prominence within corporate practices.
This involves helping companies that are raising money from the public through an IPO, qualified placement of securities or debenture issues. Capital markets lawyers draft offer documents, negotiate with investment banks, work with bankers to obtain approval from various external parties such as regulators, listing agencies, and rating agencies and make submissions to regulators including the Securities and Exchange Board of India for companies that are to be listed on a stock exchange or listed companies issuing further securities.
Only the largest few law firms tend to have a capital markets team.
Niche practice areas
All of the practices and areas mentioned above constitute a transactional law practice, commonly known as the corporate law practice of a law firm.
In addition to the above, there are also niche practice areas such as intellectual property law, tax, competition law, technology law, media & entertainment law, white-collar crime etc. Work in these areas is totally different from that in the corporate transactions practice.
Litigation and disputes work
This will cover work like arbitration, tax litigation, corporate litigation, regulatory litigation etc. Law firms normally do not engage in small-scale garden variety civil and criminal cases due to financial reasons.
Who are your clients going to be in each of these practise areas?
It is worthwhile to consider who is likely to be your clients in these areas.
Let’s go through the list of possible clients in each of these areas that we discussed. When you become aware of who your clients can be, you can equip yourself better with knowledge about that sector.
General Corporate, M&A and investment: The clients will be large companies and corporate groups who enter into mergers and acquisition transactions, promoters or acquirers of listed companies who may be planning to acquire a substantial number of shares, investors who are looking to invest in startups etc.
Banking & Finance: The clients here would be large banks or NBFCs and borrower entities.
Projects: Clients in this area include entities that are involved in undertaking infrastructure projects such as GVK Power and Infrastructure Limited or KNR Constructions Limited as well as Government departments. It can also include power companies or large oil and gas companies.
Project finance: Clients in this area will include both the recipients of the finance like large infrastructure companies, companies managing ports, real estate developers etc. as well as the providers of the finance such as banks and financial institutions and NBFCs.
Funds formation: Clients in this area will include entities setting up the funds, fund managers, asset management companies, trustee companies and large investors into the funds.
Capital markets: Clients in this area will largely include listed entities or entities which are looking to come out with a public issue and get listed. It can also include intermediaries such as merchant bankers or large brokers.
What work do corporate lawyers do?
The fundamental stages of legal work are common in most corporate law practice areas driven by transactions discussed above and these are as under:
This involves determining how the deal is to be done and what are the main commercials.
For example, if someone wants to invest in or buy out a company, how should they do it?
Should they purchase the shares from the promoters or should the company issue more shares? What is the percentage of shares they would be owning when the transaction is done?
Which type of shares or securities should they invest in?
How will they pay the consideration – directly or through a subsidiary company?
Instead of buying shares of a company, can all the assets be bought as a slump sale?
These are some questions that have to be answered at the stage of deal structuring. This is something the senior lawyers get to do along with bankers and senior-most executives.
However, every lawyer working on a transaction needs to understand the deal structure to get their job done properly.
Deal structuring will determine the direction of all the other activities. Once the road map for the transaction is created, now is the time to run a check on behalf of the buyer. You will need to check if the company has major litigation pending or coming up, huge fines pending, important licenses and documents in order, and other issues that can impact its business. The buyers would want to know before the transaction what they are getting into and that is where due diligence comes in.
These findings may impact the decision of the investor to invest or not. An acquirer may back out or offer a reduced valuation based on the outcome of due diligence.
Even before giving a big loan, due diligence is in order.
There are different kinds of due diligence exercises, and legal due diligence is one of those.
Documentation (contract drafting) and negotiation
Once it is established that the deal is worth entering into, it will be sealed through the signing of documents. There can be a long list of documents that need to be executed for carrying out a transaction. You have to draft and negotiate loan agreement, shareholders’ agreement, share purchase agreement, business transfer agreement, etc. depending upon the nature of the transaction. Both sides can draft their own versions of the agreements and then enter into negotiations to arrive at a mutually agreeable version.
The arrangement between the parties may require your client to comply with certain provisions of law or regulations. If the client does not comply with such provisions of the deal, they may even get penalized. For instance, if your investment round involves foreign investment, you have to file an FCGPR Form required by the RBI, within 30 days from the date of issuance of the equity instruments.
It is crucial to undertake deal compliance. Usually, the juniors in the firm are engaged in this type of work. They often forget to do the deal compliance leading to major problems and setbacks to clients.
How much do things change in different areas of corporate practice?
The above are present in more or less all kinds of deals, but of course, depending upon the practice area and the nature of the deal, the contracts you have to draft, the nature of due diligence and compliance will change. This is why if you have worked in one area of corporate practice, it is easy to pick up the other areas if needed.
Most corporate lawyers live from transaction to transaction. As they age in a law firm, they get bigger responsibilities. You can often find corporate lawyers comparing their deal sizes and taking pride in bigger deals!
A few key differences if you work at a smaller law firm in corporate law practice
In smaller law firms, you will generally not be restricted to specific parts of a transaction as we discussed and will get bigger responsibilities earlier in your career as there are no layers of seniors above you. They want you to take up independent responsibilities really fast. As against this, in a big law firm, you may not even get to talk to a client during your first few years and be limited to assisting a senior associate or principal associate.
In a smaller law firm your work will also not go through many layers of scrutiny and therefore, you will be required to become self-sufficient and produce final work really fast.
This will not be the case in a big firm, where there will be seniors reviewing your work. You might even start depending upon those reviews and thus not be as diligent, just because you can feel assured that someone will check and iron out the creases after you have completed the work.
Speaking of layers of seniors, let us look at the different levels present in a law firm and the responsibilities entrusted with them:
What are the different levels of seniority and responsibility at which lawyers function in a corporate law firm?
- Junior Associate: Juniomost associates in a corporate law firm are classified as A0, A1, A2, etc. depending upon how many years of post-qualification experience you have acquired. As a junior associate, you will be responsible for work related to due diligence, deal compliance, legal research, and writing first drafts of legal opinions. Your primary job is to make your senior associate’s life easier.
If seniors like your work and find you reliable, they might ask you to draft a transaction document. You can slowly progress into the negotiation of agreements as well. Usually, people occupy the position of a junior associate for a period of 3-5 years before they can move to a senior associate position.
- Senior Associate: Being a Senior Associate you may be expected to handle transactions on your own, or assist other senior associates or principal associate / partner in a deal, manage a team of junior associates and get them to deliver.
- Principal Associate: Principal associates are lawyers on a partner track. They have been there for 6-7 years usually and carry out most of the management work in the firm. As a principal associate, you will get to handle most of your clients. The partner may give transactions to run as your own, managing the whole team of senior and junior associates, and even hire and fire people. Many people underestimate the importance of the Principal Associate and try to reach out to partners in law firms when seeking employment. But Principal Associates actually have the ability to recommend you for employment to partners and more often than not, the partners will listen to them.
They are usually trying to win clients on their own because if they can land clients, they would move faster to the partner position.
- Partner: Although partners are involved in reviewing the work, advising on the transactions and in general, getting the work done, their major role is to secure business for the firm and bring more work. Lawyers are promoted to be a partner after acquiring sufficient legal experience of 9-10 years, depending upon the type of law firm. The experience alone is rarely enough, and one needs to be a leader within and outside the firm, bringing in enough business or being really good at getting work done. There are equity and salaried partners.
Foreign law firms usually have similar hierarchical systems, though there are some important differences and norms that vary from one country to another.
What would help you to cause faster than average growth in a law firm and move faster through the hierarchy?
- Initially, it is all about supporting your reporting associate and making their lives easier. If you are so efficient that they can rely on you and don’t have to spend much time correcting your mistakes, if they get to go home early because you are there to take care of the work, you will progress very quickly.
Delivering work efficiently and on time will mean that your senior can take more work and consequently more work can be brought by the partners, making your team more profitable. If you can cause this, you will be able to zap faster through the first level.
As you climb to mid-level, it is about delivering work consistently with minimal intervention from superiors. Some ways in which your work will be measured can be:
- Can you talk to a client and handle a mandate?
- Can you understand and articulate what a client wants?
- Can you propose a solution independently that a client appreciates?
- Will a client reach out to you directly next time they have a problem because they trust you and rely on you?
As you grow after mid-level and become a partner, after a point, you will max out as someone who is a workhorse. You may have already ensured that there are appropriate systems in place for getting the client work delivered and that the team is working properly.
From this stage onwards, your growth will depend upon your ability to bring business to the firm. This is where many partners stagnate.
There are two kinds of partners in law firms – rainmakers and executors. Rainmakers are the partners who are able to bring business, new clients and even create new practice areas.
Executors are the ones who ensure the execution of the assignments the firm receives from clients. It is generally observed that rainmakers are the people who are paid higher and get a lot more importance, because the growth of the firm as a whole depends on rainmaking.
The best partners are able to do both – bring clients as well as ensure execution.
However, in certain firms, partners who were able to bring clients had left the firm taking quite a few clients with them in the past, and therefore, the prevailing belief in such firms is not to encourage rainmakers. The promoters of the firm are happy to be the rainmakers and they expect other partners to work as executors.
Should you choose to work in a small law firm? What are the benefits?
You may get to run your own transactions sooner if you work in a smaller law firm and then transition to a bigger law firm.
You can also start your own law firm when you have your own book, own clients, team, or reputation as a good lawyer in that area of practice.
It is possible that you would be earning higher as an independent practitioner than you would if you were employed by a large law firm. You are also likely to have far more independence, control over your time and schedule as well as better quality of life if you are an independent lawyer able to attract good clients on your own.
In India, lawyers can easily start their own law firms as the entry barrier is very low. In some countries like the UK, it is not very easy to start your own law firm because securing mandatory professional indemnity insurance can be very expensive.
Because of these factors, small corporate law firms have proliferated in India, with hundreds of lawyers peeling off from larger law firms and starting their own setups.
How is automation changing things?
When I was working in a law firm, a good deal of my time could be spent on due diligence, reviewing documents, making lists of documents, summarizing contracts, updating tables manually, maintaining databases etc. Nowadays you have AI-based tools available for such work. There is specialized software available for tasks like due diligence and deal compliance.
Recently a law firm partner told us that the work which used to be done by four junior lawyers can now be done by just one thanks to automation.
Work that is repetitive and mechanical in nature can now be taken up by software and as a result, law firms are hiring fewer junior lawyers. Clients are also not willing to pay for junior lawyers’ time when the same work can be handled by automation.
This also changes the equation for you if you are looking to enter into a law firm as a junior lawyer. You will now be required to do much more than just be able to review certain documents and make lists. Law firms expect you to ramp up your skills really fast!
What work do you have to do as an entry-level lawyer in a law firm and how do you prepare for that?
If you are looking to enter into and work in a corporate law firm, there is some preparation which you can do in advance, so that your work at a law firm when you join one can become smooth.
Some things you can do to prepare for are:
- Learn the statutes and regulations you will deal with: You need to find out the main statutes and regulations that are required for your work. For instance, if you are going to land into the M&A team of a firm, you will need to be aware of the basic provisions of the FDI Policy, Takeover Code, FEMA, Companies Act, NCLT Rules etc. If you are not already familiar with these, it can thereafter become difficult to try to learn these and simultaneously deliver upon the work.
- Understand the concepts: This is another prerequisite. Unless you understand the basic concepts related to the work you are expected to do, you will struggle to deliver. Some basic aspects that you should know before getting into the corporate law practice of a law firm are:
- Different kinds of deal structures – is it a merger, is it an acquisition, is it an investment, is it a business acquisition or a share acquisition, what is a convertible note, different kinds of shares, debentures, and securities etc.
- How does deal structure impact due diligence and documentation;
- Learn about the industries and clients for which you will work;
- Different kinds of clauses you will have to draft and what is the impact of such clauses. For example, what are representations and warranties, what are conditions precedent and subsequent, what are drag-along and tag-along clauses etc.
- What are the different compliances you have to do for different kinds of deals?
- Learn the work that you will be expected to do: You should ideally get a hang of the work that you are expected to do beforehand. For example, you must learn about:
- How to conduct due diligence – what does this involve? What kind of documents and clarifications do you need to request from the entity on which the due diligence is being performed? How to review these documents and so on.
- How to draft different agreements – who will be the parties to these agreements, what will be their commercial intentions, how to reflect these into various clauses etc.
- How to negotiate different clauses and agreements, what are common market practices and standards;
- How to do compliance and what challenges you might face at different stages and how to navigate through various regulators?
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