Trainees for hire: SRA backs revolutionary plan
New training scheme aims to cut upfront costs for law firms
Susan Cooper
The number of graduates recruited by City law firms could be dramatically reduced following the Solicitors Regulation Authority’s (SRA) decision to back a revolutionary training model for aspiring solicitors.
Under the new model Acculaw will recruit its own trainees from postgraduate law schools and then second them to firms on an ad hoc basis, meaning the number of training contracts they offer can be scaled back.
The trainees will spend no less than three months with each firm and will be seconded to a maximum of three different firms or in-house legal departments.
Acculaw, a for-profit organisation, claims the scheme will help firms to cut the upfront costs associated with offering training contracts to students while they are still at university. Such overheads include graduate recruitment marketing activities and Legal Practice Course sponsorship.
It is estimated that it costs a firm approximately £175,000 to recruit and train one graduate.
“Our model was developed to reduce volatility in the number of qualified lawyers available in the market,” said Susan Cooper, founder and CEO of Acculaw. “The traditional model is costly, inflexible and inefficient. We want to ensure that capable, talented graduates receive better opportunities to enter the legal profession by making training more attractive and commercially viable to firms and in-house legal departments.
“Training contract numbers have dropped by 23 per cent since July 2008. Legal process outsourcing threatens to reduce that number further. The number of lawyers available in the market should be governed by the supply and demand of legal services, not the temporary effects of recession or the lure of short-term gains from outsourcing work to low-cost jurisdictions.”
Trainees recruited by Acculaw should expect to receive salaries in excess of £20,000. Although this is above the minimum set by the Law Society it is still significantly lower than typical City salaries for trainees, which start at £30,000.
Acculaw’s advisory board includes former Herbert Smith partner Henry Raine and Professor Peter Giblin, a visiting professor in the Faculty of Management at Cass Business School.
Former Linklaters senior partner Tony Angel welcomed the initiative.
“[This is] an innovative approach to solving the challenges firms face in recruiting the appropriate number of trainees and managing their cost while mitigating the impact of market dynamics on potential trainees,” he said.
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Readers' comments (46)
Anonymous | 19-Sep-2011 9:19 am
This initiative also means, presumably, that trainees will qualify without having received a permanent offer at any of three firms that have hosted them?
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Anonymous | 19-Sep-2011 9:25 am
It's also a good wheeze to get around having to make redudancy payments if there's a change in the market within 12 months of a solicitor qualifying.
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Richard Adams | 19-Sep-2011 11:04 am
"It is estimated that it costs a firm approximately £175,000 to recruit and train one graduate."
By whom, and on what basis, please?
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1 PQE | 19-Sep-2011 11:17 am
Maybe I am missing something here, but to me this looks as though it will potentially harm the wider field of prospective trainees' interests. It suggests Acculaw will recruit a number of would-be solicitors during their final years of study into a kind of "pool", pay them less than they would earn as trainee employees of any City firm, seconding them out on an "as-needed" basis to those firms that would otherwise employ them (at a profit of course to Acculaw but at an overall saving to the firms concerned when recruitment and skills training costs are factored in), with firms incurring only short-term expenditure commitments as their businesses require. I don't understand what happens to those trainees as they qualify though - are they offered positions at firms they work at? What happens to those that aren't? I am sure this model creates more efficiency, but surely it narrows to the minimum the number of potential trainees in the market at any one point. Surely the oversupply of students wanting training contracts will still exist, just as it currently does? If the savings that firms make are put into taking on more secondees to address that oversupply, then this is fantastic, but surely the likelihood is that savings will appear on the bottom line instead. An interesting idea nevertheless...
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1 PQE | 19-Sep-2011 11:22 am
@Richard Adams
I agree that they have not justified the figure, but considering all the marketing events/ law fairs at universities that firms participate in, advertising space, HR recruiters' salaries, trainees' salaries, other training staff salaries (e.g. I.T), external training providers that are brought in (e.g. for presentational training or networking training), I am sure many firms actually spend over 175k per trainee. Having been a trainee not so long ago (and without wishing to sound ungrateful), some of this is pointless expenditure.
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Anonymous | 19-Sep-2011 11:30 am
This approach will reduce social mobility in the legal profession.
It's the poorest students who reach their training contract in desperate need of a good salary.
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Richard Adams | 19-Sep-2011 11:41 am
@1PQE
Well, yes, perhaps; but they should not overlook the income that trainees generate, which should be set against the cost of training them to achieve a realistic net figure
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1 PQE | 19-Sep-2011 11:46 am
The other problem with this model, unless I am mistaken, is that trainees who "do the rounds" of several firms is hardly great for client confidentiality in higher-profile matters, nor does it help in building relationships with members of firms, or gaining a true understanding of how a firm is more widely run. No-one can honestly argue that a trainee spending 6 months or less at a firm understands a firm (for the purpose of qualifying there) as well as someone who spends 2 entire years training there learning how departments interact and the dynamic that goes with that - something which can vary widely between firms.
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Barry | 19-Sep-2011 11:49 am
While it might (which I seriously doubt) cost £175,000 gross to recruit and train a graduate, the fees generated by trainees surely cover this cost several times over. Even at £100 per hour, on a 1,400 hour chargeable year, a trainee will have billed £280,000 over the two-year TC.
In reality at City firms, trainees will be charged out at much higher rates and do much longer hours. At non-City firms, the costs of employing trainees will be much lower.
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Anonymous | 19-Sep-2011 11:58 am
What happens if the market decides it doesn't need trainees? (as happened in 2001-2003 and 2008-2011).
Sitting in a law firm with no work is depressing enough... it must be worse if you're in a temp agency.
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