SRA gets a roasting as deferrals leave students out in the cold
Stories about law firms asking their future trainees to defer their start dates have dominated The Lawyer’s student website Lawyer2B.com in recent weeks. Barely a week has passed without at least one firm conceding it has asked future trainees to push back their start dates.
Among those firms are Clifford Chance, CMS Cameron McKenna, Herbert Smith, Norton Rose, Pinsent Masons, Simmons & Simmons and Travers Smith, which are all offering voluntary deferrals.
Thankfully, those trainees who have agreed to defer are being offered relatively generous cash handouts of between £3,000 and £11,000. And in most cases the payments have come without any strings attached.
Unfortunately, though, trainees who were expecting to join Midlands-based Shoosmiths have not been as lucky. As first reported by TheLawyer.com last month (30 March), Shoosmiths became the first major law firm to take the dramatic step of withdrawing training contracts. The firm wants half of its 20-strong 2009 intake to push back their start dates for either one or two years and is also offering candidates the option to withdraw.
Trainees had until 6 April to decide whether to defer or withdraw and it is understood that, as there were not enough volunteers, the firm is now looking at making deferrals compulsory.
The firm wrote to trainees last Friday (17 April) with details of the new arrangement.
The story sparked outrage in the student community, but the decision by the Solicitors Regulation Authority (SRA) not to intervene prompted a deluge of emails from TheLawyer.com users.
Lawyer2B.com contacted the SRA earlier this month to ask what rights trainees who are in a similar predicament to those at Shoosmiths have.
We were not expecting the regulator to say that it is planning to lead a class action on behalf of the trainees, but nor did we think that it was going to say the following: “The SRA sympathises with the disappointment felt by trainees who are faced with having to defer - or in some cases even lose - their training contracts due to the economic downturn. However, unfortunately this is an employment issue and as such falls outside the remit of our regulatory role.”
Most of the comments side with the trainees. One poster asks why, if the SRA is not prepared to assist in a matter that is so important to aspiring lawyers, should students be required to pay a membership fee?
“The SRA should intervene otherwise what is the point in being a student member of the SRA?” posts the reader. “Also, what is the point in them providing guidelines for the recruitment of trainees?”
Another poster writes: “[The] SRA are happy to intervene in the free market for recruitment to help prevent trainees messing firms around, but when the shoe is on the other foot they are suddenly rendered helpless.”
But a handful of posters did rally behind the SRA, including one who writes: “Why would people expect the SRA to become involved? The SRA is not expected to intervene in the redundancies that are taking place at the moment, as this is also an employment law issue.”
With the SRA claiming that it has no powers to help, disgruntled trainees will have to turn to employment law if they want to sue their future employers. Leading employment lawyer and Dawsons partner Jo Keddie claims that firms that are deferring trainees are exposing themselves to claims for damages for the period of deferral.
“If a firm seeks to withdraw a training contract for no reasonable or legal reason, the hapless trainee could be exposed to two years’ loss and significant uncertainty regarding their career, which will have stalled through no fault of their own,” explains Keddie.
But as a number of TheLawyer.com users warn, any decision to sue a future employer should not be taken lightly, as it may result in career suicide.
As one poster puts it: “Suing your prospective employer for breach of contract will have more of a detrimental effect on your career than building on any goodwill by deferring. My advice would be to think long and hard before refusing to defer - rather than the other way round!”
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Readers' comments (13)
Anonymous | 22-Apr-2009 2:05 pm
It seems completely wrong that SRA just puts this down to an 'employment issue'. SRA requires trainees to commit to firms as soon as they accept their training contracts but then won't step in when firms then defer/withdraw training contracts... the position of those trainees who have had deferrals/withdrawals from training contracts is very different to those who have unfortunately been made redundant because realistically trainees do have the potection of employment law to aid them financially. Trainees can't simply sue their future firms for breach of contract without causing serious harm to their own careers and so need the support of SRA.
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Lewis Hastie | 22-Apr-2009 2:19 pm
Reply from Leicestershire Junior Lawyers' Division:
On behalf of the LJLD I am responding to this story. Please accept my apologies for not having commented on the article sooner.
Our reaction to the deferral schemes was altogether positive. Whilst we understand there will inevitably be disappointment from some prospective trainees in having to wait a year, the opportunities for good quality training are bound to be limited in times such as these. It makes sense for trainees to begin their contracts once the poor economic situation has begun to improve and the work begins to flow again. The fact that some firms are offering trainees a deferral payment provided they use the time efficiently is very encouraging and would certainly provide young lawyers with the opportunity to learn extra skills and forge new experiences.
However, as a trainee myself, I am very alarmed by the practice of any firm in attempting to withdraw training contracts on a compulsory basis. There are arguably parallels with the redundancy procedure but this in effect is a serious knockout blow to young lawyers at such a critical stage in their careers. It appears that some firms are failing to appreciate how damaging this can be for prospective new lawyers.
It is well documented that the offering of training contracts is such a pivotal career moment for any prospective solicitor. The SRA may have no powers at present to interfere in these circumstances, however we at the LJLD believe that they should be granted such a power, and that this power should be exercised. Law students and LPC graduates surely cannot be expected to take legal action against law firms. Aside from the cost and complexity of doing so, we are all too aware of how much emphasis firms place on reputation in the legal world. People in this position desperately need help - this alone justifies the SRA or indeed the Law Society taking control of this issue, especially as their own paid members are losing out here.
The effect of firms withdrawing training contracts is not only morally unjust after the time and effort some people have gone to in order to secure a training contract against such fierce competition, it is also very worrying for the profession as a whole. This latest development not only makes it even harder than before for hopeful students to obtain a training contract, but adds considerable stress and worry to those who have overcome that substantial hurdle. This is particularly harsh on those who have already begun (or indeed paid for) their LPC.
We will be raising this issue at a National Level in due course and doing all we can to obtain an explanation from the SRA as to why this practice is currently unhindered. I understand from an above comment that one or two people have had difficulty in contacting the Junior Lawyer’s Division. We at the Leicestershire branch of the JLD can be contacted easily by e-mail . Details are contained at our website – www.ljld.co.uk and myself and my fellow committee members would be happy to answer any questions relating to this issue.
Please be assured that this development has not been missed by us, and we will be doing all we can to obtain answers from the relevant bodies.
Lewis
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Anonymous | 22-Apr-2009 4:41 pm
My rebuttal to Anonymous | 20-Apr-2009 5:09 pm,
I am the author of the original post on this article. Kudos on the pointed tone of your comment - you should be a lawyer!
I appreciate that trainees with some "major commercial firms" might not have best experience possible given the economic climate (man I am sick of that expression!). However I make a point of visiting their website every day and reading legal sites like this one and they are doing multi-million pounds on a weekly basis. I am not so naive to think the champagne will be flowing (as has been the experience of trainees that have preceded me) but I know the quality of work is there for the taking.
Vis-a-vis "reflection on my future career path"....I have had years of studying to reflect. I am currently on a year out before commencing and have spent it working in 3 different and diverse working environments to broaden my horizons.
Sidenote: Thank you to Lewis from LJLD who has shared the views of their JLD branch!
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