The training debate – The fear of freedom

Julie Brannan, Solicitors Regulation Authority: It certainly is an important moment for the training of the profession, so it is sensible to start with a reminder of what it is all about. First, better assurance of high professional standards is at the heart of this. Protecting consumers of legal services by making sure everybody we admit as a solicitor is competent to practise is a core part of our regulatory duty. It is also the platform supporting the standing of the profession in this country and abroad. SQE [Solicitors Qualifying Examination] is about assuring high professional standards.

It is also the key that unlocks the possibility of greater flexibility in how people train. If we can be sure those who we admit have the right knowledge and skills to practise, we can open the market to much more flexibility of training. We would no longer need to prescribe particular routes to practice. We know there are people who want to qualify but get stuck. They might get stuck because they cannot afford the Legal Practice Course [LPC] or do not want to take the risk and pay for the LPC without a guarantee of a job at the end of it. We know there are people in the system who have the talent but cannot proceed. We want to do something about that.

It is also an opportunity for businesses to get access to that talent. We no longer need a ‘one size fits all’. People can get creative.

This is a great opportunity. We are on target for 2021. We have tested SQE1 and we are about to test SQE2 in December. Now is the time to start looking closely at how we train and recruit.

‘It is an opportunity for businesses to get access to talent. We no longer need a “one size fits all”. People can get creative.’
Julie Brannan, SRA

I leave you with one final thought. Many years ago, the profession took a radical step. We opened up the profession to non-law graduates. We introduced the first crammer course, the CPE [Common Professional Examination], and the heavens did not fall in. In the City, approaching 50% of trainee solicitors now come from the non-law route. We have seen other professions follow suit. I urge you all to view the current reforms. This moment is another opportunity to open your eyes to the talent out there.

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Alex Novarese, Legal Business: The SQE is a big shakeup. Richard, how well do you feel Pinsents has gotten its head around it?

Richard Foley, Pinsent Masons: I have certainly done much better in the last week. Was I really familiar with the detail? No. When you reach out into your organisation, are those who should know all over it? Absolutely.

Alex Novarese: Were they though?

Richard Foley: Absolutely. The headline challenge always is that nobody likes change. Is the sky going to fall in? Of course not. Will there be unintended consequences? Yes. Will they be manageable? Of course. For us, with anything that can help around diversity, social mobility or otherwise, which helps create flexibility for those who learn in different ways and reduce cost – if it does – what is not to like?

Alex Novarese: Has anyone else had a chance to get the heads around the reforms?

Dan Kayne, Network Rail: The O-shaped lawyer is behind a lot of the work that several colleagues and I have been doing on the introduction of the SQE. The T-shaped professional was everywhere. It was all about someone who had deep technical expertise, married with this ability to work across boundaries. We said, ‘That’s just not sufficient for what we need in-house. We need someone really well rounded.’ It became the O-shaped lawyer.

‘The massive opportunity is the flexibility to move away from the two-year training contract.’
Melissa Fogarty, Clifford Chance

We have developed that and started to work with learning and development [L&D] people at law firms, and some managing partners. Law schools are showing interest. We see so many people saying this will be good and might well work, but others are saying, ‘We will just carry on as we are.’ But where is the true leadership in this profession saying ‘this is what the next generation of lawyers will look like, should look like’? We have taken a very half-hearted approach to this so far and it is now time we start to deliver on some of the possibilities this change brings.

Matthew Kellett, EY: Big Four organisations tend to be more diverse already. We see the SQE more as an evolution of what we are already doing, because we are already drawing members of our team from other teams outside law. They will then join the team perhaps as paralegals and go through the training route on the back of that. Something like 80% of the trainees we hired in the [past] five years came through that route. On the benefits of the SQE, the jury will be out for a long time. But we notice a stark difference between those who have come through that internal route with other skillsets and those who come straight out of the university/LPC process.

Alex Novarese: Mel, as a deal lawyer, how well served are you by the current regime?

Melissa Fogarty, Clifford Chance: The massive opportunity you alluded to is the flexibility to move away from the two-year training contract. The training contract may not be working in a way that enables us to develop that sort of rounded lawyer as holistically as we might want.

Somebody who joins us could join a practice area a lot sooner than currently. Then we could tailor training to the particular discipline and embed them in the practice, earlier. I qualified in Australia, where there is a one-year articled clerkship, so you hit the ground running sooner. That works for the business, so I am positive on that front.

Alex Novarese: John, what wins can you see coming from this?

John Croft, Elevate: Nobody is deliberately trying to do anything wrong, but in most law firms you walk into today, at the partnership level is an 80/20 mix of old, white men. The bottom or entry level is a much better mix, yet they are still people who, broadly, went to the same school and university.

There is nothing wrong with being a good lawyer. The very fact that people say to me ‘I’m not a lawyer’ or people tell me to my face, ‘I am a non-lawyer,’ I find extraordinary. I go to a hospital and they do not call me a non-doctor.

Alex Novarese: Do you take on trainees?

John Croft: Next year, we will for the first time. We are starting with four, who are going to do their seat with some law firms and law departments we work with.

Melissa Fogarty: I agree this whole lawyer/non-lawyer dichotomy is appalling. We are teams. Even in law firms, we have embedded non… I am doing it; we have embedded other disciplines in our practice areas very successfully.

‘Senior people in law firms don’t know training reform is coming. Without their buy-in, the chances for change are slim.’
Dan Kayne, Network Rail

We are working at changing the way we deliver legal services, but it is important to focus on this as the legal part of legal service delivery. Some of the discussions are trying to make lawyers all things to all people. Lawyers need to be more rounded, but I do not buy into the thought process that lawyers needs to be able to code or know every other element of what it takes to run a business. What I am concerned about is that we lose sight of the fundamental part of being a lawyer, which is expertise. We can build on that and deliver a more holistic service, but without that bedrock, we do not have a profession.

Dan Kayne: Law firms do not necessarily understand that the client does not care about the law. No one has said to me and my team, ‘That was a fantastic bit of contract interpretation, Dan.’ They want to feel like they are getting a good service.

Alex Novarese: Let us open it up to the floor. Neville, what can we learn from other markets?

Neville Carter, College of Law Australia and New Zealand: When the jurisdiction of England and Wales decides to fundamentally reform its systems for education of the profession, the rest of the Commonwealth family takes a keen interest. Already, Julie, you are talking to people about mutual recognition issues, which have a range of implications for the rest of Commonwealth.

I have been absolutely astonished by the sector-wide sense of cautious inaction. The regulator, having opened this up, sees little evidence of new models and thinking coming forward. That is surprising to me, having been in this field for a long time. I see opportunities for other jurisdictions to put some models up that might be thought about.

What will it look like? I don’t know. There is a series of compromises to be struck between quality and cost, in all parts of the profession. My prediction is that what comes from this is a diverse and plural range of training opportunities that different employers and students will take. There is evidence from Australia that the benefit of modern education technologies is that that can be achieved with high efficiency.

Alex Novarese: Any other thoughts?

‘We as a profession have a responsibility to the people being trained. Surplus capacity is a major issue.’
Matthew Kellett, EY

Sarah Hutchinson, BARBRI International: I am going to talk about our experience from the US. We have a stage one of qualification that is structured similarly to the proposed SQE. The next generation look very different from the existing leadership of law firms. They are very technology focused for one. We found in the States that learners want to get through the early stages in a way that is as efficient as possible. That means technology. It means driving the efficiency of learning. They want to get on with learning in the workplace.

Alex Novarese: So much in law firms is based on the trainee-to-partner track. How much do we need to move away from that as the dominant system?

Richard Foley: A long way. It holds back law firms and perhaps the profession. The assumption is that, if you are not a partner, you are not good, old or experienced enough. If we could ditch the word ‘partner’ tomorrow, it would be positive.

As or perhaps more importantly, you have to change the ownership of equity. As long as the people who qualified as lawyers are the people who can own the business and everyone else is in a kind of parallel universe of career paths, you will never fracture this idea that legal services businesses are about getting diverse teams of people with different skills to deliver customer solutions.

Melissa Fogarty: I agree with a lot of what Richard said and I speak about this from the perspective of somebody who is primarily an M&A lawyer, who has a little management responsibility on the side. The landscape and the people who we have in our teams have already changed radically and will continue to change. [But] when it comes to producing a lawyer able to run a transaction where there might be £2bn worth of risk, I am afraid you need six, seven, eight years’ time to learn to work at that level. There might be other ways of obtaining that experience and I am open minded, but I believe in on-the-job training. Then you supplement that with some rich training programmes.

This panel is representative of what is happening in the profession: it is going to fragment. There will be some fantastic alternative legal service delivery and there already is. But a law firm in my position should focus on how, ultimately, there will still be a need for that expertise but how do you build that expertise? My view is you learn on the job.

Matthew Kellett: Qualifying as a lawyer is great training for a lot of other things outside law. Look at the Fortune 500 in the US; the boards of those large companies are populated by lawyers, when in this country, boards tend to be populated by people who have come out of accounting or consulting. I want to make another point, which is that there are legal trainers in the room here, who have a lot of interest in training a lot of lawyers. We as a profession have a responsibility to the people being trained, so that there are roles for them to go to. Surplus capacity is a major issue.

Alex Novarese: Does anybody in the room think we have oversupply?

Neville Carter: Certainly the ratio of lawyer to client is low in the UK compared to other jurisdictions.

Matthew Kellett: You have to look at the lag to training contract, which particularly came out of the credit crunch. Those going to the paralegal population spiked massively, because people were not able to get training contracts. I see people, day in day out, who, instead of being able to go straight into a training environment, have waited three, five or ten years to get a training contract. That’s oversupply.

Professor Nigel Savage, The College of Legal Practice: This depends on what you mean by a lawyer. I talk to Clifford Chance, and it has lawyers in India and Newcastle now. Lawyers all over the place. The key is what Julie said. She said we have removed all the impediments. This week, the rulebook changed radically [on 25 November], so you do not need the traditional training contract.

Julie is saying that we have created a framework, but within it is a blank canvas. Fill it in and create young lawyers to deliver your own strategic plan. It is getting lost in the middle somewhere, between L&D and HR. The solicitor qualification will become more generic and widely open, which the kids at A&O in Belfast or Clifford Chance in Newcastle will acquire.

‘Law firms have been very poor in getting everybody in the business to understand the strategy of our firm is for all of us.’
Richard Foley, Pinsent Masons

Matthew Kellett: We are in violent agreement. What I am saying is that you need to broaden the opportunities for people who qualify as lawyers to address the problem of overcapacity.

Dan Kayne: The reality is senior people in organisations do not necessarily know this is coming, understand what it is going to mean, and it is being pushed to the L&D community to help to identify solutions – it does not have buy-in from the very top. If you do not have buy-in from the very top, the chances of the training approach changing fundamentally are slim.

Melissa Fogarty: We are looking at an M&A transaction, for example, and we are looking at it as components. We are debundling things that can be done elsewhere more cheaply. There will be a narrower sliver that is still what I am getting at, which is the legal element of that legal service delivery. Firms are understanding this, which is why you are seeing new things arise like Newcastle, India, technology and legal project management.

Alex Novarese: Are we at a point when major law firms need to invest more money on training or is that not realistic?

Richard Foley: Chucking an extra £100,000 in towards training is not necessarily going to equip you for the future. We stumbled on something interesting a moment ago. Whether you are in the HR or learning department, in finance, facilities or whatever, do you think about delivering the strategy of the firm, or do you think, ‘no, I do what finance does in a best-practice way’?

Law firms have been very poor in getting everybody in the business to understand the strategy of our firm is for all of us. If you can change that, if your HR and learning teams understand the strategy of the firm and what you need from them to deliver it, changes like this will be embraced in a way that is strategically relevant.

Alex Novarese: Richard, in Pinsents and other major law firms, where are the high fliers? Are top performers going into training and development, or HR? HR teams in law firms do not have the best reputations.

Richard Foley: That is nonsense. I mean, maybe they do not, but one of the challenges around change is that you need motivated enthusiasts who will support you in building that momentum. What you do not need is massive generalised cynicism. There are some stunningly talented people in HR departments in law firms, so get behind them. Do not seep away their confidence.

Alex Novarese: I am not criticising individuals. I am saying the perception in many law firms is that they do not want robust, talented HR and learning and development teams. Law firms want people who do what they are told. So the best people don’t go into those teams.

Richard Foley: I wish I had some people who did what they are told.

Melissa Fogarty: In many respects, our HR team helps us change. They challenge us, rather than sitting there being inert and taking instructions. I accept that, as lawyers, we are very slow to change, but I do not recognise the dynamic you mentioned.

Alex Novarese: I take the point that CC has a reputation for being more progressive than peers. Julie, do you have any thoughts on what you heard?

Julie Brannan: Shall I say a word or two about the numbers? We have about 6,000 training contracts a year. We have a bit more than 7,000 people passing the LPC each year, so there is still a mismatch in what we call the training contract bottleneck. It is also worth reflecting on how, when the Law Society, as it was then, introduced the LPC in 1993, there were something like 63,000 solicitors. We now have just short of 150,000 solicitors with practising certificates. It is great that the profession has grown. The City is awash with beautiful, ornate buildings of professions, such as the apothecaries, which have died. The solicitor profession is not one of those; it is expanding and doing well.

There is not a finite number of jobs. The reforms [to the SRA rulebook] that came in on 25 November have opened up opportunities for solicitors to practise in wider areas. We have already had applications from people who want to practise as freelancers. SQE is part of the wider reform and needs to be seen in that wider context.

Alex Novarese: Perhaps we could end on opportunities or areas where training can change.

Matthew Kellett: The obvious thing is the rise of legal project management. We are fortunate in the organisation to have some of the best project managers and process improvers in the industry. The rise of legal operations and understanding law as a business, not just in private practice, but also in the context of bigger businesses, is a vital area that our teams should understand.

Richard Foley: There is a change afoot, which is designed to create flexibility, embrace diversity and, hopefully, drive down costs. Think about how that can help the way you train and develop all of those within your business, not just the lawyer community. If it does that, it will be popular.

Alex Novarese: Thank you to our panel. LB

alex.novarese@legalease.co.uk

For more on legal education see our feature: ‘Regime change – The scorched-earth approach to legal education reform’