Legal firms to make hay in slowdown

Fortunes of domestic law firms will continue to rise on account of spurt in layoffs and commercial disputes, even though the government injected a booster dose of over Rs 30,000 crore to propel growth.

"Workload on disputes pertaining to joint venture terminations, franchising problems and layoffs have increased as companies have started taking pre-emptive actions," said senior partner of the law firm Titus and Co, Diljeet Titus.

Although the government has come out with a fiscal stimulus package to boost industrial growth and economy, it is unlikely to have perceptible impact in the short run and raise business confidence, which has led to layoffs, partial and complete closure of plants and termination of joint ventures, especially those involving foreign partners.

According to Titus, who deals mostly with foreign clients, "Recently, we have received more than two dozen references on joint venture terminations, closure of wholly owned subsidiaries, branch offices and liaison offices."

Company law expert U K Chaudhary said, "We have been approached by some big companies for consultation work on compensation package for the employees to be retrenched."

Several big and small companies battling demand slowdown are trying to get rid of surplus employees to save costs.

"It is true that world is suffering from a severe financial crisis, but for many Indian legal firms, it is a boom time and lawyers across the country are getting a lot of works related to litigation and drafting," opined Rabindra Jhunjhunwala, Partner Khaitan and Co.

According to latest IMF estimates, world economic growth rate is expected to slow down to 2.2 % in 2009. Many countries in the world including the US, Eurozone nations and Japan are in recession. Economic growth rate in India too is expected to moderate to 7 % during 2008-09 from 9 % in the previous fiscal.

Source: Agencies