Training contract deferrals force Generation Y to learn patience

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.