Law firm trainees set to remain poor cousins to barrister pupils

Salaries for barrister pupils are remaining well ahead of those for trainee solicitors, despite the flurry of recent increases introduced by law firms.

Pupillage awards are set to break through the £40,000 barrier next year, compared with an average of around £30,000 for trainee solicitors.
3 Verulam Buildings will be the first chambers to exceed £40,000 for a year’s pupillage, with £42,000 being paid to pupils from October 2006.

One Essex Court and Four New Square are both likely to raise the award above their current rate of £40,000 by 2007, while both Essex Court Chambers and Wilberforce Chambers will be paying £40,000 by that time.

Meanwhile, an increasing number of barristers’ chambers are introducing guaranteed earnings and interest-free loans for new members to ease them through the first months of tenancy.

The news coincides with a new year for the latest intake of pupils and suggests that in an increasingly competitive environment, the top sets are willing to pay well above the salaries earned by first-year trainee solicitors.

Under Bar Council rules introduced three years ago, every set of chambers in England and Wales must pay pupils a minimum of £833.33 a month (totalling £10,000 annually) plus reasonable expenses. All of the top 30 sets comfortably exceed this amount.

Exchange Chambers in Manchester is the lowest-paying set, offering pupils the £5,000 minimum in the first six months of pupillage. In the second six, pupils are paid what they earn, with a guarantee of at least £10,000. Chambers director Tom Handley says that, in practice, pupils usually exceed the £10,000 by a significant amount.

The other large regional sets – No 5 Chambers and St Philips in Birmingham and Manchester and Leeds-based Kings Chambers – currently pay below the going rates in London. However, St Philips is planning to nearly double its current pupillage award of £18,500 to £35,000 in 2007, the same as the majority of chambers in the capital.

Those responsible for choosing pupils and marketing them to clients think the awards are worth the money. As Keating Chambers senior clerk Nick Child said: “All I want is the best possible pupils to work with.”

As an extra inducement, all sets offer around a third of the award as an optional advance loan during the year at bar school. Several follow up with an interest-free loan during the first year of tenancy to enable young barristers to take out a mortgage or pay off a student debt.

But guaranteed earnings are growing in popularity as chambers aim to cushion the difficult transition between being a pupil and being a self-employed tenant. Four New Square is the most generous, offering a total of £150,000 for the first three years of tenancy. The earnings are split so that a new tenant will receive £60,000 in the first year, which shrinks to £40,000 in the third.

The chair of Four New Square’s pupillage committee Ben Hubble said: “Guaranteed earnings enable our new tenants to plan confidently for the transition from pupil to practitioner.”

Other sets offering guaranteed earnings include Maitland Chambers, Fountain Court Chambers and Serle Court. Fountain Court gives new tenants £37,000 in their first year at the set, the same amount as it currently pays pupils. Maitland extends the guarantee into the second year of tenancy, offering a total of £70,000 over the two years. Serle Court also offers a guarantee for two years, giving tenants £100,000.

All the chambers which operate a guaranteed earnings system say their junior tenants earn well over the amount paid. Several clerks in other chambers voiced doubts as to the need for a guarantee, with one describing the system as “artificial”.

Paul Shrubsall, senior clerk at One Essex Court, pointed out: “Those that make it through are really good. Young barristers are marketed very cheaply, therefore they put in a phenomenal amount of work to make these incomes.”

Earnings for young tenants at top sets compare favourably to those of assistant solicitors of the same age in City law firms, ranging from around £65,000 to as much as £150,000, depending on the practice area. This is before tax and chambers contribut-ions (often as much as 20 per cent) are taken into account.
3 Verulam Buildings senior practice manager Nicholas Hill said: “The junior bar still represents excellent value for money. I can still get someone really good at fees which beat law firms.”

The increase in awards will not help ease the pressure on pupillage places. As revealed by The Lawyer (2 May), there were 20 per cent fewer pupils at the bar in 2004 than in 2003, and this number is likely to drop again this year.

Pupillage salaries

Chambers Current award (£K) New award (£K) New award effective from… Guaranteed tenancy earnings?
Brick Court 35 38 1 April 2006 £50,000 interest-free loan available in first year of tenancy
Essex Court 37 40 October 2007 No
One Essex Court 40 N/A Due to rise in October 2007 No
Fountain Court 37 N/A To be reviewed in summer 2006 £37,000 in first year
Blackstone 35 N/A Always under review No
Wilberforce 37 40 October 2007 No
20 Essex Street 36 N/A Reviewed annually No
Maitland 40 N/A Not rising at present £70,000 during first two years
No 5 Chambers 30 N/A Not rising at present No
7 King’s Bench Walk 35 N/A Reviewed regularly No
3 Verulam Buildings 40 42 October 2006 No
3/4 South Square 37 N/A Not rising at present No
St Philips 18 35 October 2007 No
Serle Court 40 N/A Reviewed regularly £100,000 during first two years
39 Essex Street 300 N/A Reviewed regularly £30,000 interest-free loan offset against earnings
Keating 35 N/A Reviewed regularly No
4 Pump Court 35 38 October 2007 No
Littleton 30 N/A Not rising at present No
Four New Square 40 N/A Due to rise in October 2007 £150,000 during first three years
Landmark 35 N/A Reviewed regularly No
Quadrant 30 35 October 2007 £50,000 interest-free loan
Exchange 15 N/A Reviewed annually £50,000 interest-free loan during second six and first 18 months
7 Bedford Row 36 N/A Not rising at present No
Kings 25 N/A Reviewed annually No
One Crown Office Row 30 N/A Not rising at present No
Outer Temple 30 32 October 2006 No
4-5 Gray’s Inn Square 31 N/A Reviewed regularly No
XXIV Old Buildings 30 N/A Likely to rise for October 2006 No
Matrix 30 N/A Reviewed regularly No
2-3 Gray’s Inn Square 25 + 2nd six earnings N/A Reviewed annually No
  Source: The Lawyer