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Minimum salary for trainees has no justification, SRA says

Young lawyers warn of 'exploitation' if trainee minimum wage is scrapped

16 January 2012

The SRA has backed abolition of the minimum salary for trainee solicitors and suggested that they could instead be paid the national minimum wage.

In response, the junior lawyers’ division (JLD) of the Law Society warned that there would be “more examples of exploitation” of trainees.

“Individuals could find themselves encouraged or simply due to desperation forced to work for very low salaries or next to nothing (if not free),” a JLD spokesman said.

“There is a danger that the future generations of the legal profession could be mainly populated by individuals from wealthy backgrounds who are able to accept low-salaried training contracts as they are in a position to receive additional financial support from their family to supplement their low wage.”

The JLD warned that abolishing the minimum salary would have a “devastating effect” on the lack of diversity in the legal sector.

“How is this going to help encourage those from disadvantaged backgrounds to pursue a legal career if they have more debt from university, debt from legal education and now could face an even harder struggle to have any prospect of paying off that debt, and in fact incurring more?

“This is in a situation where many trainees and qualified solicitors already struggle with the high levels of debt.”

In a consultation paper launched last week, the SRA argued that the minimum salary for trainees was introduced in 1982, before the arrival of the national minimum.

The minimum salary for trainees is currently set at £18,590 in central London and £16,650 outside, for the year from 1 August 2011 to 1 August 2012.

The rate is unchanged from the previous year. The national minimum wage for those aged 21 and above is £6.08 per hour.

Samantha Barrass, SRA executive director, said there was no clear evidence that setting a minimum salary for trainees fulfilled “any of the regulatory objectives” within the Legal Services Act.

“We do not regulate prices, including rates of pay, in any other area of our work. We have compared the practice with other professional regulators and found very few examples where this occurs.”

SRA officials said in the consultation paper that with the exception of the Bar Standards Board, no other regulator included in the sample prescribed or suggested a minimum salary for trainees.

“The SRA board is of the view, therefore, that there is no clear regulatory justification for the SRA to continue to set a minimum salary for trainees and we would welcome your views on the prospect of deregulation in this area.”

Officials said 30 per cent of trainees were paid just above the minimum wage, but if it was abolished they would still be “protected” by a national minimum wage of £6.08 per hour.

“The potential for employers to reduce salary levels in the event of deregulation must be balanced against the fact that the existence of a prescribed minimum salary level that is higher than the national minimum wage could also be acting as a deterrent to some firms taking on trainees.

“Deregulation could have a positive effect if some firms decide to start taking trainees or decide to take on more trainees than they might have done if the minimum requirement remained in force.”

The consultation paper revealed that 42 per cent of BME trainees were paid the minimum salary, compared to 27 per cent of white trainees.

The SRA last considered abolishing the minimum salary in 2007, but decided against it after a consultation showed overwhelming support to prevent exploitation of trainees and improve access to the profession (see, 5 June 2007).

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