Questions arise over legal status of firm’s lock-in clause
The battle by mid-tier City law firms to prevent bigger-paying rivals from snapping up their top young talent has taken an interesting twist — amid doubts about the validity of a tough new loyalty clause used by DWF.
The national firm, which has a delightful London office high up in the Walkie Talkie building, has a clause in its training contract stating that new recruits are liable to repay their Legal Practice Course (LPC) sponsorship if they leave before they have completed two years as qualified solicitors at the firm.
The four-year lock in — which is double the length of the traditional requirement for students to complete their training contracts to avoid any liabilities — is currently being challenged by one of the firm’s former rookies who quit DWF to go elsewhere.
DWF is on the record telling legal blog RollOnFriday that “there’s no point having a clause in a contract if you are not prepared to enforce it”. The firm is also reported as stating that trainees who failed to read the contract “might want to perhaps consider a different profession”.
But Legal Cheek can reveal that the firm may have a problem, as it appears to have failed to include a sliding scale to allow for less money to be clawed back according to length of time served by junior lawyers. DWF has declined to issue a response to our repeated requests for comment on this element of its contract.
Commenting on the spat, top employment solicitor Alex Mizzi, who is a senior associate at Howard Kennedy, told us:
If such repayment provisions are clearly set out in the contract, they can generally be enforced against departing employees, although it’s usual to have a sliding scale so that the longer they stay, the less is recouped. He might try to argue that it’s an unenforceable restraint of trade. If he succeeded, it would mean some hasty redrafting work across the profession.
Lawyers are notoriously bad at managing their own legal affairs, but this demonstrates why we tell clients to read contracts carefully.
Meanwhile, the Solicitors Regulation Authority has moved to distance itself from the dispute — which represents an area of contention that is rising in prominence amid a wave of newly qualified lawyer hiring by US firms’ London offices. A spokesman for the body told Legal Cheek:
Our involvement in training contracts is about the quality of the training received. Issues such as length of service and payment of fees are already covered by employment law.
UPDATE: 19:00 — A DWF spokesperson has issued this comment to Legal Cheek:
It’s a reasonable expectation that if a business invests in a two-year training programme for someone and they leave during or shortly after that investment has been made that the individual, or their new employer, reimburses that cost. This is a fairly standard clause in law firm training contracts and is also made very clear in our offer letters at the point at which we offer to pay the fees. We’ve never taken a trainee to court whether to exact reimbursement of fees or for any other reason, however in one recent case we did look to do so due to the circumstances, behaviours and attitude of the individual.