Regulators recently voted to make a change to the minimum wage that trainee solicitors receive, thirty years after the measure was reduced. Following the vote, concern has grown that the move will prevent less financially well off trainees from breaking into the industry. Others, however, believe that the deregulatory step will help to stimulate the number of opportunities available in terms of job numbers, but at what expense to quality?
The Solicitors Regulation Authority (SRA) decided to implement a change to the salary terms of trainees, with the amendment coming into effect from September 2014. It states that the minimum tailored solicitor salary will be scrapped. In its place, the SRA will seek to ensure a minimum trainee salary that equates to the National Minimum Wage, currently set at £6.08 per hour.
The decision to make the change was deferred for 2 years in a bid to minimise the effects on those already working through their training contract and to allow prospective entrants into the system time to make a fully informed choice about their financial situation. Five months of consultation with the profession have been carried out, but the criticisms about poorer applicants being unable to take up training contracts have failed to prevent the change from being implemented.
Who has criticised the move?
The Law Society itself questioned the wisdom of this new measure within their consultation response. The SRA has conceded that industry fears to exist that this removal of minimum salary will have a disproportionally negative effect on certain groups of employees, particularly minority ethnic groups and women, who are already less represented within the industry as a whole.
The board papers released from the SRA have also admitted that the risk exists that employers will also decide to cut subsequent salary levels as a direct result of the deregulation. Calls have been made to further defer a decision until the results of the Legal Education & Training review are known. So far these calls have not been responded to with substantive action and the deregulation of trainee salaries does look set to go ahead as per the original timescale.
And those in favor?
A minority group of stakeholders were in favor of the move, including some potential future trainees and the group for Sole Practitioners, who argue for a more open market for training contracts and greater opportunities to get into the industry.
In total, 130 respondents engaged with the consultation process and sixty individuals attended one of 9 focus groups across 4 UK cities. A further 1,300 people submitted their views via an online survey. Currently firms are obliged to pay trainees £16,650 annually and £18,590 in London. This minimum salary was introduced as a protective measure originally by the Law Society to protect new entrants against workplace exploitation and to encourage greater numbers of strong quality candidates into the profession. What impact this new legislation will have on the profession remains to be seen.