Banking sector leads the way despite FTSE100 reluctance to take on trainees

The number of training contracts offered by the UK's biggest companies has inched up by 3 per cent, according to exclusive research undertaken by The Lawyer's sister magazine Lawyer 2B.

The annual in-house training contract survey shows that 18 per cent of FTSE100 companies that responded now offer training contracts.

Sixteen out of the 91 companies that responded to the survey said they provided training, topping last year's figure of 15 per cent.

Major companies that take on trainees include BAE Systems, British American Tobacco, National Grid, Reed Elsevier and Royal & SunAlliance.

Leading the way is the banking sector. Barclays' investment banking arm Barclays Capital (BarCap) launched its first scheme last year and is exploring the possibility of extending it to the whole bank.

BarCap now takes up to five trainees a year and is one of the few in-house legal teams that actively encourages students to apply for training contracts by attending graduate recruitment fairs.

Standard Chartered Bank is also introducing a training programme in March, with a view to expanding it later.

The training contract will involve a corporate seat and a wholesale banking transactional seat, as well as a contentious seat with one of Standard Chartered's external advisers.

The bank's head of legal, policy and operations Susan Adams says: "The recruitment market's very tight and it's difficult to get people with the right experience. We want to train people ourselves so they understand how an in-house lawyer needs to think and work."

The success of the BarCap programme has piqued the interest of Richard Daniel, chief operating officer of the legal group at Barclays Bank, who is considering rolling out a training programme across the whole group as a result.

"At the moment we just have trainees in Barclays Capital, but it's something we're looking at for the rest of the group," he says. "One of the reasons we've hesitated in the past is the question of whether we were able to give the individual a broad enough experience to make the training programme valuable.

"The reason we're revisiting it is that we're actually a pretty big legal team now - around 750 people in total - and as we've got to a certain size our ability to provide a good breadth of training has increased." With the current turmoil in the world's financial markets and lending between banks slowing to a halt, banking might seem the last place for new prospects. But the sector's players are still keen on the idea of training.

"It's a bit too early to say what effect this may have, but we're a global organisation that's got global legal needs and we're not in it for the short term," says Daniel.

The most common route to working as an in-house lawyer, however, is to train in private practice and make the move upon qualification, and a law firm is still considered the most rigorous environment for training and the best choice for a rounded CV.

BAE Systems chief UK counsel Roger Wiltshire says: "If you want to work for a major plc, work for a well-known law firm beforehand that provides excellent training. It's worth getting to two or three years' PQE and then looking to move in-house."

Sarah Ingwerson, in-house recruitment consultant at Taylor Root, agrees. "The preferable option is to train within a big law firm as it's recognised as giving a strong technical background," she says. "From a recruitment point of view, clients ask for people to be trained in private practice at a good law firm. It's just to do with having partners and senior associates looking over your shoulder all the time."

There is still a feeling of apathy shown by some industries in their attitudes to trainees.

Construction giant Persimmon has not hired any trainees this year, despite offering positions last year. Instead the legal department is focusing on bringing in specialist conveyancers rather than training solicitors.

Big energy companies do not seem interested either. FTSE100 oil company Tullow Oil has never taken on trainees, and even one of the world's largest companies, Royal Dutch Shell, does not take them on.

Shell UK head of legal Richard Wiseman comments: "We don't think we've got the resources to train and supervise people to the right levels." Shell recently reported an annual profit of £13.9bn - a record for a UK-listed company.

Salaries are much lower in-house. A trainee at Tesco will get a healthy salary of £25,000 to start with. A magic circle trainee will get an even healthier £36,000 a year, rising to £64,000 upon qualification.

As noted above, some general counsel are not massive fans of trainees. Lawyers cost money within a company and many prefer to keep their annual legal budgets down by not offering training contracts.

Tullow Oil general counsel Graham Martin says: "I suspect we'll never get to the stage of taking on our own trainees. There's not really an incentive for us and we don't have much spare capacity to train them.

"We're quite happy with the balance we have and we've got a good spread of law firms and people we've got to know and like."

But there remains two schools of thought. A handful of legal chiefs believe that taking on trainees is essential for the survival of a big company's legal department.

Deepak Malhotra, outgoing general counsel at drinks giant InBev, has strong views on the subject. "If the sales department, the marketing department, general management and the finance department can take on trainees, then why wouldn't the legal department? What's so special about our function?"Taking trainees works for every other department and no one's going to think that the process is any less complicated in legal."