A splintering graduate recruitment model will create opportunities for savvy wannabe lawyers, forecasts Legal Cheek managing editor Alex Aldridge
1. The two-year-in-advance graduate recruitment model will keep shrinking
Hiring graduates two years in advance is a rather luxurious approach to recruitment. With firms having to cover the cost of new recruits’ law school fees, plus provide living expense grants, it’s an expensive business.
And because of its cost, the popularity of this system is declining — even in a recovering market. Magic circle duo Allen & Overy and Freshfields both cut their training contract numbers from 90 to, respectively, 85 and 80 last year. (These two, lest we forget, each offered 120 training contracts in 2008). Other prominent firms to reduce TCs in 2014 included Pinsent Masons (from 80 to 75), Baker & McKenzie (from 34 to 30) and Mayer Brown (20 to 15), with many others keeping numbers flat despite improving economic conditions.
Why? Because the rise of the paralegal and the low cost “support centre” means firms have found a cheaper alternative to trainees.
2. The immediate-entry graduate recruitment model will keep growing
Last year, Allen & Overy and Baker & McKenzie both cut training contracts in London while ramping up the hiring of graduates in their Belfast “support centre” offices. Neither firm employs the two-year-in-advance hiring model in Belfast, instead recruiting graduates on an ad hoc basis as paralegals with a view to a training contract. Hogan Lovells and Berwin Leighton Paisner are expected to operate in a similar way as business gets underway this year in their new offices in Birmingham and Manchester, although the former will restrict training contracts to its London office.
Other firms have been increasing the number of paralegals in their London offices. Statistics are hard to come by, but recruiters specialising in the paralegal market, such as the Stephen James Partnership, reported a sharp increase in graduate paralegal roles in the City during 2014 and anticipate a busy 2015.
Significantly, regulators seem intent to make this way of operating sustainable, with moves afoot following the Legal Education and Training Review to allow paralegals to gain solicitor status outside the formal training contract framework by virtue of time spent on the job. The two-year-in-advance graduate recruitment model will remain as firms battle to attract the cream of students, but for everyone else the paralegal entry route will grow and grow.
3. Money will keep flowing to the 1%
2014 saw the legal profession reflect wider society in the way that the gap between the haves and have nots widened. While pay for legal aid lawyers continued to collapse — helped by the abolition of the trainee solicitor minimum salary — remuneration at some top City firms increased. The magic circle led the way, with Allen & Overy, Clifford Chance, Freshfields and Linklaters all boosting trainee and junior lawyer pay by around 4% following Slaughter and May‘s 2013 wage increase.
There is an expectation that the “silver circle” and other top 20 City firms will follow with their own rises this year. Meanwhile, the top chambers — where business is booming — are due an increase on their pupillage awards, which last went up in 2011.
Where things could get interesting is how firms deal with the disconnect between salaries for graduates recruited via the traditional two-year-in-advance model and money for graduates recruited as paralegals straight off the LPC. While the likes of A&O may be able to get away with paying their Belfast lawyers lower salaries, ambitious graduates who have entered big firms in London, Birmingham and Manchester via the paralegal path will soon start to push for money on a par with their peers who’ve come in through the training contract route.
4. Less ‘CV Blind’, more socio-economic diversity
Clifford Chance’s ‘CV Blind’ initiative — in which it gave vac scheme places to students solely on the basis of their performance in an essay — was perhaps the diversity story of 2014.
For an elite firm operating in a profession defined by the high educational standards of its members to effectively waive its minimum academic requirements was a bold step. Certainly, it sent a powerful signal to the world about law’s enthusiasm to widen its recruitment model. But, in ignoring both school and university grades, it went further than most firms are comfortable with. Note the decision of the other members of the magic circle not to follow.
Still, CV Blind got firms thinking about their longstanding unhealthy obsession with A-level results. Why rule out the large pool of potential recruits who did badly at school (often because of poor schooling) but went on to get top grades at (an often unfashionable) university? To do so strikes of indirect discrimination in favour of the privately educated or those wealthy enough to live in the catchment areas of top state schools.
Having successfully broadened the gender and ethnic diversity of their trainee intake over the last two decades, firms now seem ready commit to broadening the socio-economic diversity of their trainee intake. The penchant for Oxbridge and Russell Group graduates won’t disappear, but the success of diversity group Aspiring Solicitors in 2014 — which helps big firms reach students at universities they don’t normally target — is indicative of a wider shift in mindset.
At work here is a mixture of altruism (lawyers tend to have more of a social conscience than most City professionals), meeting a business case (lawyers need to reflect their client base) but also an anxiousness to be seen to be fair. Trainees are symbolically very important to law firms — even more so, paradoxically, as training contract numbers shrink. Now, with fewer graduates than before bagging these coveted jobs, big-earning firms have become alive to the very real danger of being perceived as old boys’ clubs.
5. Bar training model nears breaking point
Surprisingly, big declines in the number of students doing the LPC and the GDL hasn’t been mirrored by the Bar Professional Training Course (BPTC), which continues to attract around 1,700 students each year.
According to the 2014 Bar Barometer, criminal law accounts for 24% of all pupillages — by far the highest of all practice areas — followed by family on 13%. Both areas are being hit hard by the legal aid cuts and some chambers specialising in this work have ditched their pupillage programmes altogether.
Slightly oddly, the Bar Council has failed to release the number of pupillages available since 2011/12, when there were 438 pupillages — a figure which has remained fairly constant since 2008. If, when it is finally produced, the next round of stats shows a sharp drop on this number, change could be on the way.
A happy new year to all Legal Cheek readers and best wishes for 2015.