During the 2007-08 hiring round, law firm graduate recruitment teams’ focus centred on accommodating the demands of Generation Y. Fast forward one year and the mood on campus could not be any more different.
Thanks to the recession, students are no longer calling the shots. What is more, for some it will be the first time they have to deal with rejection.
Meanwhile law firms, which typically hire trainees two years before their start dates, are being forced to consider what to do with trainees who are due to join later this year or in 2010.
The principal method adopted to tackle this problem is to ask future trainees to push back their start dates. The first firms to announce trainee deferrals were Newcastle-based Muckle and Ward Hadaway (TheLawyer.com, September 2008).
But, as our table shows, an ever-growing number of firms are following Muckle’s lead while others, including Birmingham-based Wragge & Co, are reviewing their positions on trainee deferral.
The majority of deferrals reported to date have been voluntary, but Lovells was forced to make them compulsory after not enough students volunteered. US firm Reed Smith has made its trainee deferrals compulsory in return for cash payments.
Midlands-based firm Shoosmiths, meanwhile, has also warned future joiners it may be forced to make the deferrals compulsory. But in a more worrying move, the firm has also asked trainees to withdraw their training contracts. And, as first reported by TheLawyer.com (30 April), it is not offering compensation.
However, Shoosmiths is the only firm not to offer cash to deferring trainees. Most firms are offering a flat payment of £5,000 to students who agree to defer for a year.
As one poster on TheLawyer.com writes: “Shoosmiths’ model is perfect if you want to ruin any chances of recruiting any decent graduates in the future.”
But others are more sympathetic and argue that Generation Y need to understand that they cannot always get their own way.
As one graduate recruitment partner claims, making a decision on whether to pay trainees to push back their start dates is the cause of many a headache for law firms that are being forced to balance looking after their existing staff against the negative PR associated with not getting out the cheque book.
That said, some firms are tackling the problem by just throwing money at it. Travers Smith, for instance, is paying £10,000 to trainees who push back their start dates by a year, while US firm Shearman & Sterlingis offering £5,000 in return for a six-month deferral.
In contrast, Clifford Chance, Norton Rose and Simmons & Simmons are making their trainees work for the money. Clifford Chance is offering an additional £3,000 on top of the £8,000 it is already paying to deferring trainees if they spend their gap year doing pro bono or community- related work, or if they pursue further study related to law or learn a language.
Simmons, meanwhile, has given trainees the option to enrol on a firm-specific MBA with BPP Law School. The firm, which claims that so far the initiative has been well received, will pay the course fees and provide a £15,000 maintenance grant.
Norton Rose’s cash also comes with strings attached. The firm has asked trainees who want to defer to put forward proposals on how they intend to spend the year in return for a payment of up to £10,000. The trainees have mostly come up with the usual suggestions including overseas charity work, further study and learning languages.
The firm’s graduate recruitment manager Karen Potts says: “We could’ve just let the trainees spend the year on a beach but we wanted to make sure they were developing skills as well.”
Her colleague Alex McGovern, also a graduate recruitment manager, adds: “Some students now have a lot of debt thanks to top-up fees, so asking them to take up to a year off to spend their time constructively, without any cash incentive, was something we weren’t prepared to consider.”
Even though firms are taking different views on how much money, if any, they should pay to trainees who delay their start dates, they do agree on one thing: starting a training contract in a downturn is detrimental to all concerned – especially the trainee.
It’s amazing how times have changed – before the downturn future trainees would’ve been begging firms to delay their training contracts – now firms are having to pay them to defer.
There are still firms that haven’t deferred trainees, is it just a matter of time or are some firms taking a different stance?
I am due to commence a TC this September with a major commercial firm. Last contact I had with them was a couple of months ago – should I be concerned? I have to move across the country for this job and I don’t want to put a deposit on a flat only to find out there is no job to go to!
It is important to note that for those students who are providing all of their own financial support, conducting the LPC (and the GDL) particularly in London is an expensive business, and living costs are often not met by the maintenance grants provided by the future employer. The students then take out graduate loans on the basis of commencing work immediately after the LPC- and not meeting repayments could be very detrimental to future trainees- bankruptcy obviously ruins their cances of ever practising as a solicitor.
Obviously people will retort “get a job” but with the incentives to defer seeming to require the outlay of money by doing community programmes/travel or languages where does this leave the more unfortunate poorer future trainees who will have if offered £5,000 the grant sum of approx £420 per month to live on with repayments of up to £250 per month on loans- £250 a month doesn’t go very far.
It is a different world in the recruitment market right now and current graduate are facing uncertain prospects, but have a more realistic idea as to job prospects and are less likely to incur debt in the current climate. For those people recruited 2 years before their training contract is to commence, who have incurred debt in honour of their side of the bargain, law firms ought to cough up. All the current offers do is illustrate once more that the city legal profession is much more accessible by those students with money behind them.
Many firms are still proceeding with their commencement dates as planned as they may still have the need for the trainees. Mnay of the firms making deferrals now are also the firms that would have taken on exceptionally large numbers of trainees so they need to balance that out a bit.
Nobody though seems to have addressed the fact that many of these firms are still recruiting for the dates when the deferring trainees are starting, obviously something will need to be done as the point of deferrals was to balance intakes and it wouldn’t be in anyone’s interests to have a new expectation of applying for a training contract in a certain year knowing you’ll be deferred automatically.
I agree with the anonymous poster at 1:58pm.
As the first lawyer in my family and someone who comes from a disabled single parent family background I have found the current situation with regards training contracts extremely difficult.
After leaving Cambridge with a 2:i in a non law subject I decided to take out a professional studies loan to finance my GDL in the hope that I would be able to recoup my outlay when I landed a training contract.
I now face an uncertain future as recruitment levels are slashed to accomodate deferred September 2010 trainees. I have already had to turn down my LPC place for this September due to lack of funds. I am hoping to be able to paralegal for a year before recommencing my studies but that market is also suffering so I may struggle to find a job.
Frankly I find this talk of being an impatient generation Y deeply insulting. I have worked extremely hard to get where I am only to be left high and dry by a financial crisis that was not of my generation’s making.
For all the talk the profession makes about diversity it is the well off and well connected who will be best placed to ride out this period. Nepotism has always been a factor in this industry, I am under no illusions regarding that, but as the market has contracted it has become more of a factor.
My resolve to become a solicitor has not weakened and I will continue to fight tooth and nail to get a training contract – whether that be this year or next.
I too find this rather insulting – having spent two years searching for the all important training contract and finally securing one with a big firm I now face the difficult decision of whether or not to defer. I have spent the past year and a half planning my life and working full time hours in a temporary job in order to save enough money to move across the country to start my LPC and training contract, only to be told out of the blue that I may have to wait another year. It is all very well that the firms are offering compensation to defer, but realistically to those of us who aren’t lucky enough to have a large bank balance or parents who can support us, the sums offered by these firms simply aren’t enough to fly off around around the world or spend the year doing charity work. I am NOT suggesting that more money should be offered, simply that if firms can look so far ahead in their recruitment campaigns then why is it we are only being notified of these deferrals at the last minute? We have kept our side of the bargain, now its time for the firms to keep theirs.
I would love to see the partners and HR managers that agreed to offer a £5000 payment or less try and survive for a year with that amount of money. Wake up law firms!!! There are no temporary jobs for graduates without recent work experience. The weak sterling means that travelling is very expensive in most places. Banks will not provide loans for postgraduate studies. What exactly so you expect future trainees to do?! We do not all have parents that can afford to support us!
Well done to those law firms offering a sensible sum of money along with innovative incentives to ensure that trainees use their year productively.
Stacking shelves is very fulfilling and allows you to gain commercial awareness.
It would be interesting to hear if firms other than the magic circle and large firms are defering. Smaller firms may be able to cope. Any insights will be carefully noted.
Very Aged lawyer who does not have to worry about training contracts
I’m afraid I’m not very sympathetic. I’ve always thought it seems rather unfair that the big city firms pay trainees more than double the minimum recommended salary, plus GDL fees, plus LPC fees, plus a living allowance. Now, these incentives represent more money for nothing! Lucky things.
If you aren’t interested in pursuing a city career or working for a big corporate firm then you often receive no assistance with fees at all and are expected to live on £16,500 for 2 years whilst training. I don’t think it is fair to assume that those trainees are any less intelligent or hardworking than their city peers. You can’t assume their income is supplemented by parents either. They will also have student loans and be in debt (probably with a professional studies loan) as it is virtually impossible to leave university/law school without this now.
As far as I’m aware Maclay Murray and Spens are offering the standard £5,000 to defer rather than the zero stated. Unless there is a disparity between London and elsewhere!
I have a training contract with a firm that (as far as anyone can tell) seems to be weathering the storm. I will put my hand up and say that I am terrified that I will be asked to defer, I have worked long and hard to get here (as we all have) and I just want to get out and work.
However, is it just me who is slightly peeved that the firms are not only putting qualification another 12 months in the future and seriously disturbing our plans, but trying to dictate how you spend the time? I think it’s outrageous that they would stipulate that a trainee does certain things with their year, when the situation is hardly their fault. I am deeply sick of studying – I have been doing it non-stop since I was 4 (bar holidays, before anyone says) and I am scraping at the door to get out and earn some money. If my firm tried to stipulate I do a masters to be entitled to more money I would certainly have something to say about it.
Many Scottish firms including the one I was due to join this September are not offering any sort of compensation to their trainees which have been forced to defer.