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 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 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 users. 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 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!”