The Solicitors Regulation Authority has decided that – from 1 August 2014 – employers will not have to pay trainees a minimum salary above the national minimum wage.
At a meeting today, the SRA Board took the view that setting a minimum salary above the national minimum wage was “not in the public interest”. The two-year delay is designed to minimise the impact of the change.
The national minimum wage rate is currently £6.08 an hour.
Samantha Barrass, SRA Executive Director, said: "This decision was based on an objective consideration of very full and detailed evidence gathered through a variety of sources.”
The SRA said it had received 130 responses to its consultation. Sixty individuals in total attended nine focus group sessions held in four different cities, while more than 1,300 individuals responded to the regulator’s online survey.
The papers for the SRA Board meeting said the key messages from the consultation responses were:
- stakeholders were concerned that removal of the minimum salary would have a disproportionate impact on women and Black and Minority Ethnic (BME) groups who tended to be paid at the lower end of the market;
- stakeholders believed that the minimum salary promoted access to the profession for individuals from a range of backgrounds and that the SRA had a remit in that respect;
- stakeholders believed that there was a link between the salary an employer payed a trainee and the quality of the training it provided and that the potential for employers to offer lower salaries might produce less competent solicitors;
- many stakeholders called for a deferral of a decision about the minimum salary until the findings of the Legal Education and Training Review (LETR) were known;
- the majority of stakeholders believed the SRA had a remit in the setting of a minimum salary because of its obligations to "encourage an independent, strong, diverse and effective legal profession";
- a minority of stakeholders responding to the consultation, including the Sole Practitioners' Group and some would-be trainees, were in favour of deregulation. “The basis of their support for deregulation was the potential for deregulation to open up the market for training contracts, even if these were lower paid training contracts, and create more opportunities for individuals currently excluded from qualification due to difficulties securing a training contract.”
Under the current rules, law firms are required to pay trainees a minimum of £16,650 a year. In London, the figure is £18,590.
The Law Society, which brought in the minimum salary in 1982, attacked the SRA’s decision, saying the minimum wage for trainees “plays a crucial role in promoting equality of opportunity and acts as a safeguard to avoid exploitation.”
It also pointed out that the threat to diversity in the profession was highlighted by the SRA's equalities impact assessment.
A Chancery Lane spokeswoman said: “The Law Society was concerned that the result of this decision will be that trainees who will be offered the reduced minimum salary, who are likely already to have substantial debts, will find themselves in significant financial difficulty and forced to take on other work which will distract them from giving full attention to the training contract.
“Alternatively, those trainees who have private means will receive an undue advantage over potentially more meritorious candidates. Neither result will be good for the diversity of the profession. These views were supported by the SRA's own Equalities Impact Assessment and we are surprised and disappointed that the SRA did not place greater weight on its findings.”
The Law Society said it would be monitoring the effects of the decision closely.