One of my seniors at an internship at AZB back in 2009 told me that mergers and acquisitions (M&A) are the “bread-and-butter” for any corporate lawyer.
If you are a corporate lawyer, you must know M&A. It is critical for success.
If you want to increase your chances of getting recruited by a law firm, it makes sense to learn M&A.
M&A is one of the largest practice areas in any big law firm, and other full-service law firms. And M&A activity, particularly in India, has been growing steadily during and after the pandemic.
For example, WhiteHat Junior’s USD 300 million acquisition by Byju’s was an M&A deal accomplished entirely digitally during the pandemic.
This continuing activity is why M&A lawyers are in huge demand. This is also why M&A offers a promising and safe career path, with incredible growth opportunities.
Do you want to know how much M&A lawyers earn?
When I was recruited in 2012, my annual salary inclusive of performance bonus was INR 13 lakh. These salaries have progressively increased over the past few years.
Today, if you get a job in any of the big law firms as a fresher, you can earn anywhere between INR 15 and 18 lakh.
By big law firms, I am referring to the Big Seven – AZB & Partners, Cyril Amarchand Mangaldas, Shardul Amarchand Mangaldas, Khaitan & Co., JSA, L&L Partners and Trilegal.
Some boutique law firms pay as much as well, or even more. For example, Nishith Desai Associates increased salaries in 2021, during the pandemic itself.
Saraf & Partners, which was started by former senior partner of L&L Partners, Mohit Saraf, is paying around INR 16 lakh per annum to freshers.
Smaller law firms have also hiked salaries big time to attract better talent.
All of this is partly in response to the soaring demand for legal experts in corporate India.
A huge proportion of positions offering these salaries are taken up by M&A and investment lawyers. As a senior associate, you may earn anywhere between INR 25 and 35 lakh per year, sometimes even more. From their second year onward, senior associates in big or boutique law firms can earn more than INR 40 lakh.
Principal associates make between INR 36 and 60 or 70 lakh per year.
Law firm partners easily earn upwards of INR 70 lakh to a few crores per year. Equity partners in big firms make more than a crore, and they can earn huge performance bonuses too.
A tier-1 law firm’s M&A lawyer at partner level (around 10 years of work experience), receives an average all inclusive annual pay in the range of INR 90 lakh-1.2 crore. There are of course stalwart partners, the shakers and movers of the M&A industry, who could take home 20 times more than that.
A partner at a tier-2 firm I know of takes home 16 times the salary of the entire team under him (which is about a crore per annum).
The Big Seven law firms pay more or less similar salaries for the first few years. Depending on the success you build as a junior associate and importance of the matters you work on, salaries begin to diverge. Bonuses could be substantially different though, depending on which team had a good year (profits).
Are salaries similar across different practice areas?
In the first two or three years, not much separates the pay for a tier-1 law firm associate in litigation and M&A, for example.
But there is a difference.
Law firms have huge M&A teams, because M&A has been growing very fast over the past few years.
During the pandemic, getting opportunities in M&A and corporate transactions teams of a big law firm was far easier compared to an opportunity in disputes.
Also, M&A work requires a lot of lawyers. Even the smallest investment or M&A deals require at least three to four lawyers, given the volume of work.
Some law firms with a lot of M&A work set up transaction support practices or special due diligence teams to handle these matters. These teams sometimes run into 30-40 lawyers!
To give you an idea, when steel baron Laxmi Mittal acquired Arcelor, Europe’s biggest steel company, it was a USD 33 billion M&A transaction. A team of over 1,000 lawyers worked on that deal!
How much do law firms charge clients for M&A transactions?
According to a former partner at a Big Seven firm who requested anonymity, and is currently heading the practice for a smaller firm, large firms charge at least INR 30 lakh for an M&A deal, going up to INR 1 crore or more depending on complexity or time spent on a deal.
Partners’ time can be billed at INR 20,000-70,000 per hour on average, depending on their relative demand and reputation in the market.
Of course, this money goes to the law firm’s coffers and not to the partner directly, but the partner draws salary and bonus, and even a profit share based on equity in the partnership.
Associates’ time can be billed at INR 10,000-20,000 per hour, again depending on experience and reputation in the firm.
A due diligence, on the simpler side, covering three years only can easily cost INR 12-15 lakh, if a large law firm is engaged. In some cases, it can cost more.
Apart from large law firms, all of whom have large M&A practices, there are many smaller boutique law firms that do M&A deals, especially with the rise of M&A in SME and startup sectors. Their fees are relatively low, especially because deal sizes and stakes involved are smaller.
As part of my research on how much an M&A lawyer earns in India, I spoke to several lawyers who revealed the factors which govern how much they make. Various models of pricing include:
- A flat fee
- Percentage of deal value
- Per hour fee (where hourly rates are fixed)
- Hourly fee with a cap
Factors such as time spent on legal opinion and negotiations, the value or amount at stake and complexity, the sector, the scope of due diligence, and regulatory permissions involved will influence the fees that lawyers can charge.
Why shouldn’t you earn as much?
Do you want to know more about building a career in M&A and corporate transactions?
Do you want to earn the kind of remuneration that we have just discussed?
To know more about building a career as an M&A and investment lawyer, all you have to do is join our FREE, LIVE, and online bootcamp on ‘How to make a career in mergers and acquisitions and investment law’, from May 13-15, 2023, 6.00-9.00 pm IST daily.
Make sure that you set an alarm for all three days. We will start on time and you don’t want to miss a single minute.
Remember, we can accommodate only a few thousand out of the roughly 20 lakh lawyers in India!
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