Major City firms are manipulating their retention rate figures by handing out short-term contracts, The Lawyer has learned.
US firms Mayer Brown and Orrick Herrington & Sutcliffe are among those understood to have offered trainees a short-term contract in the last year, while Travers Smith is facing a claim from pregnant trainee Katie Tantum who alleges pregnancy discrimination and unfair dismissal after the firm offered her a contract of just two months (15 February 2013).
In September 2012 Mayer Brown retained 70 per cent of its 20 trainees, two of whom were subsequently given short-term contracts of three and six months.
It is also understood that Orrick Herrington & Sutcliffe has offered NQs fixed-term contracts over the last 12 months of varying lengths.
Travers Smith, which denies Tantum’s allegations of pregnancy discrimination, offered five NQs fixed-term contracts of between two and 12 months last summer.
Retention levels at Mayer Brown have fallen over the last year from 80 per cent in March 2012 to 62.5 per cent in March 2013, when just five of the eight trainees were offered contracts. Apart from the September intake the firm usually offers NQs fixed-term contracts of 12 months.
“I think it’s something that firms will move more towards unfortunately, especially ones making redundancies across the firm, and with more trainees qualifying than they can afford to keep on it gives them more flexibility,” said one City trainee.
“As an added incentive for the firms, the temporary contractors count in their retention statistics, but then they can free up places for the next qualifying intake by not renewing the fixed-term contracts.”
Those who had been offered short-term contracts were told it was because of “uncertainty” in work flow and a lack of finances.
Recruiters in the City said the trend for firms offering NQs short-term contracts is growing, particularly among US firms.
The same is said by recruiters outside of London, with one Midlands-based recruiter saying: “We’re seeing plenty of September qualifiers from regional firms now looking for a new job after only being offered six-month contracts. Whether that’s to fudge figures I don’t know, but it’s certainly recent.”
A Mayer Brown spokesperson said it was the first year that the firm had offered shorter contracts, adding: “It isn’t an approach we normally take.”
Orrick declined to comment on employment terms.
Have you or someone you know been offered a fixed-term contract? Email us in confidence at lucy.burton@thelawyer.com
Wow, I knew the HR people at law firms were among the most cynical in the world, but this takes the biscuit. Giving a young lawyer a few months as an associate then sacking them just so you can hide the truth about your inability to retain NQs is despicable. This is something the SRA needs to look into as it appears to be misleading the market, regulators and trainees who expect a real job, and is certainly against the spirit of the trainee system in this country.
This has been going on for donkey’s years.
This is hardly new, or news. Firms have been doing this for ages.
Good for the NQ too. It makes it look like they were kept on but wanted to go elsewhere.
Win-Win (except for the people who compile the statistics).
Perhaps these firms don’t give two hoots about their retention stats and are trying to maintain flexibility, as stated, and also trying to give their former trainees a leg up and a bit of breathing room?
I’d rather be given a 6 or 12 month contract with the option of looking elsewhere in that time rather than be cut loose.
Revealed: bears **** in woods
We all know this happens. What I think is far worse is when high ranking partners are about to be booted out, but instead go on the sick for years leaving the assistants and associates to slog out their guts to cover their inflated salaries.
Please could the lawyer go and shame these bad people rather than nameless HR types.
@Tim
a fair point and a pragmatic one, but in which case surely these firms must explain in their NQ data that x-number of NQs are not actually going to continue to work at the firm. Or, even better, only state their trainee retention figure for the nominally ‘permanent’ positions, which gives law grads a more honest understanding of what fate awaits them when they gamble their careers on certain law firms. Either way, firms that fudge key public data do a disservice to all.
Bumping 6-month PQE solicitors to accommodate qualifying trainees is akin to a council laying a new road, then ripping it up and doing the work again within 6 months simply to justify their allocated budget for the year. It’s simply nonsensical from an economic perspective. If law firms were that concerned about flexibility, then they would move to change the blind system of recruiting trainees 2 years in advance.
Public data?
Firms are not required to publish their retention rates, and only do so for publicity purposes. You should not be surprised to learn that the figures are inflated in a variety of ways (temporary contracts, omitting data of trainees that leave part way through their contract or early to join another firm using time to count). Like any promotional material, these figures should be taken with a pinch of salt.
@Anonymous | 11-Mar-2013 1:43 pm
re. ..’data only for publicity purposes’
Are you saying that it is OK then for law firms to be dishonest and hoodwink prospective law graduates? If I say something to you as a potential employer, it may well be for ‘publicity’, but it doesn’t mean I can lie. Likewise, if I give out data to be published it has then become ‘public’ and I am accountable for its accuracy.
Seems worrying when you’re due to train at one of the firms stated…feel sick in my stomach that I’ve made the wrong choice 🙁
Does anyone know if this happens at other US firms not specifically named in the article? If so, which ones… ?
(Concerned future trainee going to a US firm).
Why do people find this so very surprising? I qualified in 1993 and was offered a fixed-term contract as my firm’s largest client had just gone into administration. It made me focus on whether I really wanted to stay with the firm I trained at. 14 or so months after qualifying, I moved into a City firm specialising in an area which I practise today as a partner.
Ask the UK top 50 how many short term contracts they offered last year.
The Training Contract system is just awful. This is the tip of the iceberg.
For example, I trained at one of the top 3 Nottingham law firms and it was a total shambles. A colleague only got an NQ job by sleeping with one of the partners. She then promptly told a girl she didn’t like that she wouldn’t get an NQ job (she promptly found another job before the end of her TC). Likewise another trainee accidentally let slip that she didn’t have to interview because her Dad was an important client and had been guaranteed an NQ job before she had even visited the firm. It’s no surprise that almost all the trainees (other than the one sleeping with the partner) had fled the firm six months after qualification.
It puts offering a few NQ jobs into perspective!
I am a coal mining apprentice, my mine has just been closed at the end of my apprenticeship. I watch the media and government spokespeople and they tell me that market forces have accounted for my job. I shouldn’t grumble i should get on my bike and either go to Poland (where i understand there are mines) or think myself lucky that i live in a fair and democratic market econony where most are winners and some are not.
In a country where there are far too many lawyers for market demand I’m surprised firms even offer training contracts. This is simply commercial forces at work. Firms can only afford to keep the best – the also rans might be lucky and get offered contracts if their firm is particularly busy and they should look upon that as real world experience they wouldn’t have otherwise had.
Anyone who thinks that they are guaranteed an NQ job at the end of their training contract based on figures released 2-3 years before they will be qualifying is rather naive.
And who’s to say you’ll want to stay anyway.
‘This is something the SRA needs to look into…’
Why would they? The SRA have never looked into anything to do with Trainees/NQs employment or retention in the past, so they’re not going to suddenly start now…