There is no regulatory justification for retaining the 30-year-old policy of minimum salaries for trainee solicitors, the Solicitors Regulation Authority (SRA) has said.
Following an announcement of a consultation on the issue at the SRA’s monthly board meeting yesterday, the authority’s executive director Samantha Barrass said “there is no clear evidence that setting a minimum salary for trainees fulfils any of the regulatory objectives within the Legal Services Act”.
The consultation paper – due to be published tomorrow – admits there is some evidence that fixing a minimum salary affects wage levels, but says “it does not follow that the requirement supports the regulatory objective to ‘encourage an independent, strong, diverse and effective legal profession’ – indeed, it is possible that it has the reverse effect”.
Mr Barrass pointed out that the SRA does “not regulate prices, including rate of pay, in any other area of our work”. It was unclear that the minimum salary improves access to the profession, she said – one of the original reasons for its adoption.
In the consultation paper, the SRA board says that since the prescription of a minimum salary “does not address any identified risk to the public interest… [it is] out of step with our outcomes-focused regulation strategy”.
It rejected the argument that removing the minimum salary could result in a lower standard of graduate entering the profession and argued that its existence might be deterring some firms from taking on trainees. Trainees would be protected by the national minimum wage, currently £6.08 per hour for over 21s.
The paper reports that no other professional regulator, apart from the Bar Standards Board (BSB), “prescribes, or suggests, a minimum salary for trainees”.
At the board meeting, SRA chief executive Antony Townsend pledged that in addition to “a very full consultation”, the question of retaining minimum salaries would be put to “stakeholder focus groups” before any decision is taken.
Of the 9,088 trainees presently registered with the SRA, 30% receive the minimum salary. A higher proportion of black and minority ethnic trainees (42%) are paid the minimum salary that their white counterparts (27%).
Minimum trainee salaries, current
ly £18,590 in central London and £16,650 elsewhere, have been in force since 1982, long before the national minimum was introduced in 1999. According to the SRA, they were brought in to prevent exploitation of trainees and “to encourage high-calibre graduates into the profession”.
The authority consulted on minimum salaries in 2007 when it took over responsibility for setting them, but shelved any action until training contract arrangements had been reviewed. Similar consultations took place in 1992 and 1996.
A Law Society spokesman said: “Obviously it is right for rules to be reviewed occasionally, but we believe that it is important that the SRA should consider the impact on trainees if the rule is removed. In addition, the SRA will need to look closely at the diversity implications. We will be consulting the profession and responding on its behalf.” The SRA consultation closes on 10 April.
Also at the board meeting, the chief executive’s report revealed that researchers working for the Legal Education and Training Review (LETR) have relayed concerns that the timeframe is too tight to allow proper discussion of results as they emerge.
The LETR – a joint project of the SRA, the BSB and ILEX Professional Standards – is due to publish final recommendations by the end of this year. According to the LETR website, the research team is to publish interim consultation papers in March and July 2012 and seek comments on interim recommendations in October.
Mr Townsend’s report said: “From its initial fieldwork the research team reports concern in some quarters that the review timeframe will not allow for sufficient consultation on research papers as they are published.”
He added: “There is also some uncertainty among stakeholders about what actually constitutes the review – the work and reports of the research team or what subsequently happens once the regulators receive the recommendations.”
As a result, he said, the three frontline regulators would “improve communications about the review” and “ensure that the stakeholder engagement strategy allows adequate time for debate on the interim reports during 2012”.
He admitted that: “Greater clarity about the role and purpose of consultation with stakeholders is also required.”
It is not the first time the issue of the LETR timetable has been raised. In October a co-chair of the review’s consultation steering panel, the former appeal court judge Sir Mark Potter, hinted the finish date could slipinto 2013.