The image of the sleek, suited city lawyer or the portly wig-clad barrister, perhaps unfairly, dominate the public perception of the legal profession. Yet the path to such auspicious heights might require putting up with a degree of austerity for trainee lawyers. The most startling aspect of an amendment to the Solicitors Regulation Authority (SRA) proposal for ending minimum wage could result in trainee solicitors being paid as little as £2.60 per hour. The move has been condemned by the Law Society’s Junior Lawyers Division (JLD) as another step towards making the profession the preserve of the wealthy. The SRA had amended its proposal after receiving advice that trainees would be classed as apprentices within the national minimum wage regulations. The JLD has argued that the classification is most inappropriate because the apprentice wage had been designed for school leavers rather than individuals who might already have completed multiple years of studying, before embarking on a training contract.
Perhaps the most empathetic measure to help the lowly first year trainee wage was offered by a contributor to the Law Society Gazzette, who argued that the seven-figure earning sleek city lawyer should ‘forego the Porsche this year and fund a trainee’s salary instead, thereby safeguarding the heterogeneity of this great profession’. The consequence of the lowly minimum wage is even more worrying since the latest National Admission Test for Law (LNAT) has revealed an eight percent increase in applicants. LNAT is an entrance requirement to study law at undergraduate level at nine universities - Birmingham, Bristol, Durham, Glasgow, Manchester, Nottingham, Oxford, King's College London and UCL.
The steady increase in applicants and graduate numbers has resulted in more students applying for fewer legal jobs. The legal education and training review (LETR) is perhaps the most comprehensive assessment of legal training since the Ormrod report of 1971. It aims to address the training process with particular reference to the need to protect and promote the interests of consumers, and to ensure an independent, strong, diverse and effective legal profession. LETR is being conducted by the profession’s three main regulators – Solicitors Regulation Authority, Bar Standards Board and ILEX Professional Standards, under close observation from the Legal Services Board. The discussion so far has been focused on solicitors and barristers, yet, there needs to be more recognition of the other recognised professions, particularly Chartered Legal Executives, the only route to becoming a fully qualified lawyer for those without a degree. The question of where paralegals fit into the regulatory framework also require addressing. LETR could potentially offer the possibility of national assessments at the point of entry to the profession comprising of common training for solicitors and barristers.
LETR could replace the training contract or pupillage system with a more flexible period of ‘supervised practice’ and a new approach to post-qualification continuing professional development focusing on ongoing competence rather than the current system of simply counting how many hours of courses lawyers have been on. However, no amount of restructuring of the training process could really return the profession to its former prosperity until a further five percent of fee earners were removed, according to a report for RBS, a leading banker to law firms. Such a move in England & Wales would constitute the loss of nearly 6,000 solicitor jobs based on the most recent figures, with the Law Society research last year showing 117,862 practising solicitors. The bank estimates this would save around £280m in annual costs for the UK legal profession. RBS argues that cuts to over-capacity is required to return the profession to a more stable financial performance as the industry wrestles with a sustained period of low demand and the impact of new entrants under the Legal Services Act.
The impact of ABS upon conveyancing firms has been such that more than a third is considering the alternative business structure, according to research conducted by Searches UK. The survey of 361 conveyancers also revealed predictions of large scale closures to traditional law firms due to competition. The most notable recent change to have impacted conveyancing had been the introduction of smaller panels by the lending banks such as Lloyds TSB and HSBC. The latter had been particularly criticised for having just 43 firms in its panel. Other major lenders are expected to follow suit. A rise in indemnity insurance premium has also affected the margins. However, the net effect of the removal of smaller High Street firms from the lender panels could severely impact upon consumer choice. While smaller firms could theoretically act for buyers, the need for a separate approved firm to act on behalf of the lending bank increases the final cost to the property buyer.
The campaign group ‘Keep Sunday Special’ has expressed reservations against government plans for Sunday Trading Laws to be suspended on eight weekends during the Olympics and Paralympics. George Osborne, the Chancellor of the Exchequer stated that Britain should be open for business as millions of visitors visit the country. This would allow for large retailers to trade for more than 6 hours on the eight Sundays. The shopworkers union Usdaw ‘vehemently opposes’ the plan, pointing to the government's own consultation last year, which showed there is no widespread support from either retailers or the general public for change, and citing that ‘deregulation would have a very detrimental impact on the lives of millions of shopworkers’. The Church of England has given a lukewarm response to the plans. While it does not oppose longer opening during the Olympics, and some clergy are even cancelling Sunday services so they do not clash with big sporting events, there is some fear that Sunday trading laws could be permanently scrapped by the back door.
The Law Society has dismissed an extra £20 million in government funding for the not-for-profit advice sector as ‘simply not enough’. Chancellor George Osborne has promised £20 million a year over the next two years but the sum was immediately and widely condemned as being not enough to replace shortfalls left by spending cuts. Justice for All, a coalition of advice agencies including CABx and the Law Centres Federation has recently published a survey of 230 advice organisations, which showed that three quarters were suffering serious funding cuts and one in five fighting for survival. The most alarming news to be revealed by the survey was that more than half were cutting back on services for people with the most complex problems and a third cutting back on the number of volunteers. The legal sector has offered a cautious welcome to the government’s National Loan Guarantee Scheme (NLGS), which aims to increase bank lending to small and medium-sized businesses by guaranteeing £20bn of the banks’ own borrowing. This would allow banks to borrow more cheaply than usual and pass on the savings in the form of interest rates that are one percentage point lower than the norm. Firms with turnovers of up to £50m are eligible for the scheme. Barclays, Santander, Lloyds, Royal Bank of Scotland and new market entrant Aldermore have so far signed up to the scheme. One commentator from the consultancy 360 Legal Group called the new scheme ‘not a nirvana to solve all the profession’s ills, but more of the same old story - if a firm was good enough to lend to before the NLGS, then it is good enough to lend to after it.’
Several international stories have been of interest to me this week. 16 year old Amina Filali from Morocco committed suicide after intense pressure from her family and a judge to marry her abuser. The Justice Ministry had originally suggested that Filali was consenting to sex and therefore was not a victim. But her death has prompted outrage over an article in the penal code absolving the perpetrator of the rape of a minor if he marries the victim. In India, a proposed change in law to retrospectively tax capital gains by foreign companies could have a negative impact on investment in the nation. Finance Minister Pranab Mukherjee, struggling to rein in the widest budget deficit among major emerging economies, wants the change to ensure that the government gets additional tax payments that officials say is under litigation. In the US, responding to an international petition, celebrity tweets, and spreading public outrage, the US Justice Department opened an investigation into the shooting of a black teenager, Trayvon Martin by a neighbourhood watch captain George Zimmerman, who escaped arrest. In China, the Justice Ministry has ordered lawyers to swear an oath of allegiance to the Communist party. Lastly, Sri Lanka’s human rights record has been criticised at the UN Human Rights Council for alleged war crimes during the civil war with LTTE.
My two recommended reading articles from this week are firstly, an analysis of the justice system in Hungary and secondly, what should UK judges say outside of the courtroom. Krisztina Than and Marton Dunai in Reuters Insight discuss how Hungary is implementing potentially illiberal laws that suit the political cause of the ruling conservative party. Lawrence McNamara, in his Guardian article argues if Lord Neuberger’s recently proposed principles for ‘extra-judicial’ statements go far enough.
Once again, I thank the legal representatives, journalists, web editors and publications I have cited, and linked, for allowing me to compose this week’s Sunday Law Review. Readers are welcome to highlight any critical omissions, offer factual corrections or discuss the issues raised in my review.