James Pritchard

Two of the SRA’s aims for the new Solicitors Qualifying Exam (SQE) are to create a more diverse profession and drive up standards. In this blog, we examine whether the SRA will succeed in its quest or whether it will have the opposite effect as some critics are predicting. 

The legal profession has a diversity problem. A report published by the SRA in 2017 found that partnerships remain dominated by white males. “Females, and BAME females especially, appear disadvantaged when it comes to career progression in the solicitors’ profession,” it said.

A strong, diverse profession

The new SQE examination forms part of the SRA’s commitment to creating a strong, diverse and effective profession reflecting the communities it serves, however, many in the profession doubt the SQE will help the SRA meet this goal.

A “devastating effect” on individuals?

The junior lawyers division (JLD) of the Law Society has been vociferous in its criticism of the new exam. Its chair, Amy Clowry, believes the cost of taking the exam of around £3,000 to £4,500 will have “a negative social mobility impact”.

Similarly, two university academics claim that the new exam will have “a devastating effect” on many individuals.

University academics Dr Jessica Guth of Leeds Beckett University and Dr Kathryn Dutton of York St John University wrote about the exam in The Law Teacher journal and said: “For many, equality of opportunity remains a distant dream… The inequalities inherent in the higher education system – the route which most still take to becoming a solicitor – are perpetuated in the profession.”

They laud the SRA for its aims but say unless firms change their recruitment practices they are excluding “very talented young minds” due to where they are born and who their parents are. One suggestion they make to overcome this problem is to introduce genuinely blind recruitment practices.

Revolutionising access to the profession

Others take the opposite view about the potential effect of the SQE. Susan Pearlman is a former head of legal knowledge at Herbert Smith Freehills and a tutor at the University of Law. In an article in The Lawyer she says she was initially sceptical about the new exam but says she “realised that to truly consider the merits of the SQE, you have to look beyond the exams themselves”.

“Allowing candidates to gain qualifying work experience in a far wider range of settings will be revolutionary in opening up access to the profession,” she says. Not so argues Clowly, who contends that this will simply move the current training contract bottleneck to those seeking newly qualified positions.

One thing seems inevitable, and this is that more solicitors will qualify each year. If so, is this necessarily a bad thing?

Not according to Mark Edwards, senior vice-president of online legal services provider Rocket Lawyer. He thinks that in a few years there will probably be four times as many qualified solicitors and that this is a positive as these new lawyers “are going to be able to help all those people currently not able to access justice”.

A wider talent pool

Susan Pearlman also sees the upside of more lawyers qualifying. She says that teaching at the University of Law has shown her that many “bright and committed students” were being lost to the profession as a result of failure to secure a training contract.

“Not only will [the SQE] mean a career in law becomes a realistic ambition for a far more diverse range of people, but it will widen the pool of talent of new joiners, which will result in benefits to the legal profession and therefore the clients, the people and the communities lawyers work with,” she says.

No one can argue against the benefits of diversity and the SRA is to be applauded for this assuming the concerns about the cost of the exam and recruitment mentioned above are overcome.

Improved standards

What about the SRA’s goal of driving up standards?

On this, there is also some disquiet with the JLD saying the removal of the requirement to study academic law and the inclusion of multiple-choice questions in the exam “will lead to a lowering of professional standards”.

This is echoed by the House of Commons Justice Select Committee, who have written to the Legal Services Board saying that it has “significant concerns” about the new exam. In particular, it said it is “unconvinced that enough attention has been paid to the potential long-term impact of removing the requirement for academic study of law”.

Are the JLD and select committee right? Will the new exam lower standards rather than raise them? This is something we will examine further in a future blog.

In part two of our autumn 2019 retentions round-up, we report on the latest announcements by leading firms, some notable NQ salary increases and an interesting statistic revealed by Eversheds Sutherland. (read part one here)

Global firm Eversheds Sutherland added some attention-grabbing spin to its retention announcement this autumn. As well as stating that 39 out of its 49 NQs are staying put (80%), the firm revealed that 70% of these are female and 26% are Black, Asian and Minority Ethnic (BAME). This compares to its BAME figure of 18% in 2018.

Evershed Sutherland’s HR director Lorraine Kilborn said: “We strive to attract individuals from a range of backgrounds and perspectives, unlocking talent that can provide us with a competitive edge in an increasingly global legal market.”

Perhaps this announcement is a sign of things to come and something other firms will follow. Or perhaps not.

Macfarlanes has repeated its perfect spring 2019 retention score, with all 25 of its NQs remaining at the firm. They will start on a newly boosted basic salary of £85,000 per annum with the opportunity to earn between £98,600 and £110,250 once individual and firm-wide bonuses are taken into account. The firm says 98% of its staff received bonuses last year.

International firm Hogan Lovells is retaining 28 out of 31 of its qualifying lawyers this autumn (90%), two in Birmingham and the remainder in London. The London qualifiers will start on £90,000.

The London office of Ashurst is keeping on 20 out its 24 NQs (83%), a slight dip from its 93% this time last year. They will start on £84,000 although this could rise to £105,000 depending on bonuses.

International outfit Stephenson Harwood has revealed an impressive score of 92% in its London office, with all but one of its 13 qualifiers accepting offers to stay with the firm. They will start on £75,000, a figure that could go as high as £97,500 once bonuses are factored in.

Clyde & Co meanwhile is retaining 37 of its 43 trainees (86%) of whom 33 will be based in London, three in Manchester and one in Guildford. It too is upping NQ pay, in this case to £70,000 (an uplift from £65,000).

There has been a flurry of pay hikes for NQs in recent weeks. There will be smiling faces at US firm Dechert, which has boosted salaries for its London-based NQs to £116,000 from an already impressive £100,000. As if things couldn’t get any better, lawyers at the firm are now allowed to wear jeans to work. The firm believes this is about “inclusivity, empowering our people, and attracting the best talent”.

NQs at Addleshaw Goddard will now be on £75,000, which places themselves alongside their counterparts at Bryan Cave Leighton Paisner, Dentons, K&L Gates and Stephenson Harwood and £2,000 ahead of those at CMS and Squire Patton Boggs.

Gowling WLG has raised NQ pay to slightly below this level for its London lawyers (£71,000 from £66,000) and £44,000 for those in Birmingham (up from £42,500). This brings its London NQs alongside Bird & Bird, who recently announced an uplift to £71,000 (a bump of 15%).

These improved pay packets are certainly good news for NQs but an article in the Financial Times suggests they could be causing tensions to rise at some firms.

The FT reports that anonymous senior associates at Slaughter and May and Clifford Chance are unhappy about uneven pay rises. One unnamed Slaughter and May associate is quoted as saying: “We are seeing real compression in pay. The headlines are all about the newly-qualified pay, but there’s been very little uplift for lawyers who are two, three, four and five-years qualified.”

Clients are also said to be unhappy about it. Linklaters managing partner Gideon Moore commented on Freshfields’ decision to increase NQ pay in May by saying: “Clients have been clear that they don’t want to pay for the increases.” “But,” he added, “like it or not you have to be seen to be competitive in that first wave of salaries.”

The autumn retention season has got off to a solid start with all five magic circle firms and some US firms announcing positive numbers. In the first part of our regular round-up, we look at the autumn retention rates revealed so far and the salaries NQs will be starting on.

All the magic circle firms have now released their autumn retention scores, with Freshfields and Slaughter and May sharing top honours.

Both firms are retaining 93% of their qualifying trainees, Freshfields keeping on 38 out of 41 qualifiers and Slaughter and May 37 out of 40.

Freshfields’s figures are an uplift on their spring 2019 score of 78% and last year’s autumn result of 83%. Their newly qualified solicitors will start on £100,000, as will Slaughter and May’s (although Freshfield’s newbies can earn a bonus on top of this salary, while Slaughter and May’s figure is said to include a discretionary bonus). This season’s results are another strong showing from Slaughter and May, whose scores in the previous three rounds have been 97%, 95% and 86%.

Linklaters was only a sliver behind the top two, keeping on 49 out of 54 qualifiers (91%). Their lawyers will also be on £100,000 per annum plus a discretionary performance bonus.

The last magic circle to announce this year was Allen & Overy whose 89% (39 from 44) edges the firm out of last place. Not to be outdone on the remuneration front, their NQs will earn “minimum total cash” of £100,000 in the form of salary and “a sign on bonus”. The firm received 43 applications and made 40 offers.

Meanwhile, Clifford Chance props up the table of magic circle firms. Their figures are hardly bad though as they will be keeping on a healthy 41 out of 47 (87%). Their NQs will earn “around £100,000”, assuming they receive their discretionary bonuses. This year’s results compared favourably to last autumn’s less impressive showing of 77%.

International firm Mayer Brown was first out the blocks once again, announcing their 82% score in early June. Nine of its 11 qualifiers will remain with the firm, with only one qualifier who applied for an NQ role being unsuccessful.

New York stalwart Shearman & Sterling posted similar figures for its London office, keeping on 13 of its 16 autumn qualifiers for a score of 81%. Twelve of these NQs will be based in London, with one joining the firm’s arbitration team in Abu Dhabi. They will start on a staggering £120,000.

Another New York-based firm, White & Case, has scored at impressive 89%, with 16 out of 18 staying with the firm. They will start their qualified careers on £105,000. In announcing the results, partner Inigo Esteve, who heads the firm’s trainee solicitor programme in London, had positive news for junior lawyers saying: “The business need for English law qualified lawyers continues to increase despite ongoing economic and political uncertainties, including Brexit.”

Elsewhere, Pinsent Masons is retaining 57 out of 72 trainees (79%) at a time when managing partner John Cleland has said the firm is “continuing the transformation of [its] business”. The firm’s London NQs will start on £72,500, compared to those in the regions and Scotland on £44,000 and £43,500 respectively.

This puts their NQs slightly behind those at Travers Smith’s, who will start on £85,000. The City firm is keeping on 17 out of 21 trainees for a score of 81%, a slight drop from its 90% this time last year and 94% the year before.

National firm Irwin Mitchell has announced an impressive 96% retention rate, with 45 of its qualifiers staying on. Of these, 15 will be based in London with the remainder spread between Birmingham (nine), Sheffield (seven), Manchester (five), Leeds (four), Newcastle and Southampton (two each) and Bristol (one).

Last and, unfortunately, least in this first autumn 2019 summary come international firm RPC with a disappointing retention rate of just 42%. Ten of the firm’s 12 autumn qualifiers applied for roles at the firm’s London office, but only five were successful. Partner Simon Hart explained the result by saying that the retention rate was lower than usual “largely due to applications into certain practice areas being significantly oversubscribed and us being unable to accommodate everybody with the number of roles available”. The firm expects better figures next year.

We’ll keep an eye on further announcements over the coming weeks and will reveal all in the second part of this blog.

The legal profession’s battle to get to grips with the new Solicitors Qualifying Exam (SQE) shows no sign of abating as we hurtle towards the September 2021 start date. As the key stakeholders try to work out how the new exam will affect them, one major concern is starting to emerge. This is, whether the new exam will lead to a two-tier profession? (For a recap on how SQE will work and its potential pitfalls, you can read our previous SQE blogs here, here and here.)

Let’s start by asking what we mean by a two-tier profession in relation to training.

According to Legal Cheek: “In the elite tier, the theory goes, you’d have City law firm trainees who have been put through expensive, extended SQE-LLM courses; then in second class there’d be the students who do the exam via a combination of cheaper preparatory courses and on-the-job learning.”

If this theory holds true, how will it fit with the SRA’s goals for the SQE? And how is the new exam likely to affect each of the three main stakeholder groups:

• Student lawyers

• Firms

• Training providers

Recap: The SRA’s goals for the SQE

The SRA’s stated aims for the SQE are to drive up standards, reduce costs for students and remove barriers to entry.

The SRA’s Julie Bannon, who is the architect of the new exam, has said the centrally assessed SQE exam will be harder to pass than the LPC and will improve standards. And, as SQE 2 will be taught on the job, this will reduce training costs and make access to the profession easier.

“There will be a wide range of courses available to students and this will impact cost. The cheapest option is likely to be a law degree with the integrated SQE and that will cost within the £9,000 fee cap which is cheaper than the LPC as it stands,” she says.

Students and junior lawyers

Not everyone agrees with Bannon. The Junior Lawyers Division (JLD) has been vociferous in raising its concerns about the exam.

Last week, the JLD wrote an open letter to the House of Commons Justice Committee requesting an enquiry into the decision to go ahead with the SQE. The letter says it believes the exam “will lead to a lowering of professional standards which will be detrimental to users of legal services and damage the reputation of the profession”.

Its specific concerns are:

• the removal of the requirement to study academic law and the fact that assessment will be by multiple choice;

• training requiring only “the opportunity” to develop the necessary competencies and sign-off being possible by a newly qualified solicitor who may not ever have met the trainee; and,

• the unresolved question of how much it will cost to qualify, (and whether loans will be available), and concerns about social mobility.

The JLD also wrote an open letter to the SRA last April, warning that the SQE could lead to the exploitation of student lawyers.

In the letter, the JLD focused on the decision to no longer regulate training contracts and training principals. This, it said, could result in junior lawyers being “exploited in unhealthy cultures, work and training environments”. It also claimed the abolition of a minimum trainee salary will be a barrier to entry to the profession for those from lower socio-economic backgrounds.

Law firms

Law firms face two significant challenges under the SQE. The first is whether their student lawyers should complete the two SQE exams consecutively (as they do now with the GDL or law degree, followed by the LPC) or separately.

Firms are said to be worried about the practicalities of releasing students to study for and sit the SQE2 exams. Questions arise such as when and how much time they would be given? And, what happens if they finish their work experience but fail SQE2?

The SRA recommends students complete SQE1, then do SQE2 after they have completed their qualifying work experience. It wants to avoid the financial gamble that can lead to students paying for and passing their LPC but not gaining the training contract they need to qualify. This has led to a bottleneck in the profession at the trainee stage. Critics say the new exam could result in that bottleneck simply moving to the qualification stage, with a glut of qualified lawyers unable to get jobs.

The second concern for firms is the content of the SQE. The new course lacks elective modules and the larger firms are concerned that their students won’t get the education they require. The result could be courses specifically designed for the bigger firms and it is here that fears of a two-tier system are most acute.

Even the SRA’s Bannon recognises the fact that the profession is likely to divide at this point: “I think we will see a range of different provision emerging,” she says. “At the very top-end there may be gold-plated courses designed for the particular needs of City law firms. These firms recruit up to two years in advance and provide funding so it’s up to them how best to prepare their future trainees.”

 “If you think about the sector as a whole, it may well be the case that different law firms have different requirements — it’s no longer one size fits all,” she says.

A similar split is probable during the work experience itself. Students at larger firms are likely to gain focused, hands-on experience designed to help them through SQE2, and get paid time off to study for it. Other, less fortunate, students may have to rely on gaining their two years’ experience by working for up to four firms on more of a paralegal basis, possibly at a low salary, and may need to take unpaid time off or work evenings and weekends to study for SQE2.

The training providers

The training providers come at the SQE from a commercial angle. Their interest is in providing courses that satisfy the SQEs minimum requirements and ones that go beyond these and meet the demands of the larger firms.

The University of Law’s director of business development, Morette Jackson anticipated this when she said: “It all starts with communication and making sure that all our entrants are aware that while doing the bare minimum of preparation courses and different bits of qualifying work experience will get you admitted, you may not be on a par with other candidates who have studied a more comprehensive and structured programme.”

Conclusion

It seems certain that post-SQE there will be a spectrum of qualifying standards in terms of both training and work experience.

This may or may not be a good thing, depending on your vested interest and where you are likely to sit on the spectrum. What is certain is that the SQE will be the subject of much debate in the months ahead. We will be keeping tabs on how the key stakeholders are preparing for the new qualifying process as we head towards the September 2021 start date, so watch this space.