Controversial rule changes that scrap the minimum salary for trainee solicitors and allow solicitors to refer clients to tied financial advisers were approved last month by the Legal Services Board. In both cases the LSB found that there was no reason to refuse the applications.
The last week has seen both a victory and a defeat for lawyer lobbying, and perhaps the most fearsome legal lobbying machine – the Bar – crank into action. The victory came in the surprise climbdown by HSBC over its restricted conveyancing panel. A global banking giant felled by a campaign spearheaded by the Law Society but with strong support from the likes of the Bold Group. It was pursued at a national level, with coverage in several national newspapers, and also at a local level, with solicitors talking to their estate agent contacts.
The minimum salary for trainee solicitors will be scrapped on 1 August 2014, the board of the SRA decided yesterday, saying it is not the job of a regulator to control wages. Firms will be required to pay the national minimum wage of £6.08 an hour.
Scrapping the minimum salary for trainee solicitors is likely to stimulate more training contracts – but the majority will pay below the current minimum level, a Solicitors Regulation Authority report has concluded. However, the negative impact on diversity is not as clear-cut as critics think.
The prospect of trainee solicitors claiming housing benefit and taking on second jobs because the minimum salary has been scrapped “is not the type of image that befits the profession”, the Law Society has claimed.
The Solicitors Regulation Authority is to consider retaining the minimum salary for trainee solicitors at the level of the national minimum wage after discovering that without it trainees would be classed as apprentices and so could be paid just £2.60 an hour in their first year – less than £5,000.
News round-up: Kennedys eyes investment, run-off cover call, Manchester firms’ growth stalls, and more
Our latest news round-up reports on City firm Kennedys’ likely need for external investment, Law Society lobbying over run-off cover, Mishcon’s new private client service, a review of Manchester firms’ financials and an anti-HSBC petition.
There is no regulatory justification for retaining the 30-year-old policy of minimum salaries for trainee solicitors, the Solicitors Regulation Authority has said. It also admitted to concerns that the Legal Education and Training Review’s timetable is too tight.