Regime change – The scorched-earth approach to legal education reform

Its supporters are accused of advocating reforms not fit for purpose, posing a threat to the standing of the profession; its detractors are derided as ‘dinosaurs’, apologists for inequality and ‘buggers’ who moan about everything.

Four years since the Solicitors Regulation Authority (SRA) announced plans to shake up legal education in England and Wales with the introduction of a new Solicitors Qualifying Examination (SQE), the debate is as passionate as on day one. And as deeply entrenched.

No matter that the SRA ran long consultations between 2015 and 2017, confirmed in spring 2017 that the plans were going ahead, and received the greenlight from the Legal Services Board (LSB) in March 2018 (see ‘The winding road to the SQE’, below). Not that most major law firms are up to speed.

After several delays, the new exam will be in place as of autumn 2021 – significantly a number of law firms and academics still predict chaos and a jump into the unknown. Supporters see the birth of a more flexible regime widening access to the profession, cutting costs and encouraging work-based learning.

SRA head of education and training Julie Brannan says the new system has two objectives: ‘Assure standards more rigorously and widen access by removing some of the barriers of the current system, which mean people who have the right talent can get stuck and not become solicitors.’

The new ‘super exam’ will remove the need for solicitors to hold an undergraduate law degree or a graduate diploma in law, and drop the requirement for a one-year legal practice course (LPC) with an accredited provider and a further two-year training contract at a law firm.

‘The SQE unlocks the ability for people to train in lots of different ways with the assurance that we will check their competence at the point of admission.’
Julie Brannan, Solicitors Regulation Authority

If there is one point everyone agrees on, it is that the change will be radical; the number of stakeholders affected is huge, spanning universities and training providers to law firms, accountants and ultimately clients… oh yes, and tens of thousands of aspiring lawyers. Perhaps most ominously even the supporters appear less confident that the shake-up is on track to achieve all its aims.

Is all this worth the effort? Will it achieve its aims? And, most importantly, how will it recast training in the world’s second-largest legal market?

The agenda

The motivations for the new regime rest on arguments for the need to open up an exclusive profession, introduce standardisation of the testing of lawyers, cut the costs of education and provide flexibility for law firms to train solicitors in a profession facing structural change.

Under the current regime, assessments have been distributed to over 100 educational organisations and thousands of law firms signing off on trainees, which the SRA says risks uneven standards. An indication of the erratic benchmark across providers is LPC pass rates, which range from 50% to 100% and, in truth, the case for standardisation is one of the areas in which the SRA’s agenda wins most support.

The reforms also address considerable criticism of high costs – the LPC can cost upwards of £15,000 – and entrenching elitism, as only academic high-fliers will get their costs picked up by sponsoring law firms. The near-duopoly of vocational training by BPP and the University of Law (ULaw) is widely felt to have contributed to such costs.

And across the graduate landscape the majority of those currently taking the LPC remain self-funding, with many arguing that law schools are profiteering by charging high fees to students with little chance of a training contract.

The SQE instead champions a more flexible approach to work-based learning, which the SRA hopes will provide more scope for candidates without a sponsoring employer as they have more means of putting together a portfolio of qualifying experience. Argues Brannan: ‘The SQE unlocks the ability for people to train in lots of different ways because we have the assurance that we will check on a standardised basis their competence at the point of admission.’

‘All City firms have now got low-cost legal service hubs in the UK and they will all be staffed by people who may well do the SQE.’
Sarah Hutchinson, BARBRI

SQE 1 assesses a candidate’s fundamental legal knowledge in a multiple-choice assessment, testing the competence of an individual to undertake qualifying work experience. A candidate should then be prepared to tackle the less understood SQE 2, according to the watchdog, which will be intended as a broader assessment of the skills a candidate has developed on placement (see ‘The new SQE regime at a glance’, below).

The scope for where these skills can be honed widens considerably against current practice. A graduate will need two years of work experience across no more than four different placements and have that experience signed off by a solicitor for it to count as qualifying work experience (QWE). Working in a law clinic; paralegal experience; work undertaken at a university; and apprenticeships could all be considered valid.

For many in the profession, the most promising practical route in the short term will be for paralegals to use their experience towards solicitor qualification, given the large and increasing number of paralegals at major UK law firms. ‘All City firms have now got [low-cost legal service hubs] in the UK and they will all be staffed by people who may well do the SQE,’ says Sarah Hutchinson, managing director of legal education provider BARBRI. ‘If somebody becomes successful, becomes a team leader, they could move into the City.’

BARBRI will be entering the market for those providing SQE preparation courses, with the US-based firm taking the decision immediately after the SRA released its assessment specification in June 2017. BARBRI enters the UK market via the College of Legal Practice, a joint venture with the dominant legal education provider in Australia, The College of Law.

‘The SQE gives us the opportunity to get trainees more involved with legal technology in their training.’
Michael Castle, Deloitte Legal

Such entrants somewhat validate claims that the SQE will see new providers loosen the grip of ULaw/BPP. The SRA hopes incoming courses could be provided by a plethora of education bodies in a variety of mediums, including more web-based learning.

The SRA is also planning to publish the pass rates of different training providers, so individuals can choose based on results rather than perceived status. And the benchmark the providers have to meet is clear, as Shearman & Sterling senior recruitment manager Paul Gascoyne puts tersely: ‘It’s an external exam. If you pass, you pass.’

Though the SRA has put social mobility at the heart of its argument, the regulator believes legal service providers as well as prospective solicitors will benefit from the new regime. ‘For years there’s been a disconnect between learning and development and strategy,’ says Nigel Savage, interim chief executive of The College of Legal Practice and a supporter of the reforms. ‘The SRA has given firms a blank canvas and told them to develop their own pathways to suit their strategy.’

Historically, the training contract forced individuals to rotate between three practice groups, though the obligation was dropped by the SRA in November in a decision some see as preparation for the SQE, which involves no such requirement. In theory a candidate could complete valid experience exclusively in one practice. Such bespoke arrangements allow firms to tailor training with client or strategical needs, albeit at the cost of breadth of knowledge.

Similar changes can be made in light of the removal of the LPC, which can struggle to reflect the business lines of major law firms. Here, however, part of the reticence of law firms is that recent years have seen increasing numbers of them strike bespoke deals with providers like BPP and ULaw to tailor the LPC to their firm. This development is generally felt to have improved standards, for commercial law firms at least.

There is also a feeling that the SQE’s preference for experience over academic credentials should make rookie solicitors more client-ready, says Osborne Clarke UK managing partner Ray Berg: ‘The new QWE means we can make our lawyers as client-focused as possible in understanding the business and make sure the way they work is as relevant as can be. Clients will benefit too.’

‘The SQE as it stands is not fit for purpose: it does not test the things the SRA says it tests and there is a real risk it will devalue the legal profession.’
Jess Guth, Association of Law Teachers

While most traditional law firms are still waiting for more details before they react to the SQE, alternative legal service providers and the legal arms of the major accountancy firms have been more proactive. Big Four outfit Deloitte revealed details of its new ‘SQE-ready’ training contract in September, with successful applicants commencing their three-year training stint in 2020 in a programme adapted from how graduates are trained to become accountants.

‘It means trainees can earn as they learn,’ says managing partner of Deloitte Legal Michael Castle. ‘It also gives us the opportunity to get trainees more involved with legal technology in their training, for example, so in that respect it looks to the future.’

Denise Nurse, chief executive of contract lawyer provider Halebury, says her company is looking at ways it can support its paralegals to qualification in preparation for the reforms. Lawyers On Demand co-founder Simon Harper is likewise enthusiastic about the ability to take on trainees once the SQE has been implemented.

Meanwhile, leading US New Law outfit UnitedLex has gone a step further and will be delivering a six-module course as part of its in-house training programme for the SQE. The modules are entitled: The Changing Landscape of Legal Practice; An Introduction to LegalTech; Skillsets for the Digital Age; Process Mastery and Fresh Thinking; and Tech Readiness. Notes chief executive Dan Reed: ‘The SQE is beautiful in that it shows the evolution of law compared to the progress made by the medical and business fields. The stratification in medicine and business is where law needs to go. There’s precedents all around and law needs to get there in creating more of a talent base for people with interests in other areas.’

The support of such sizeable New Law outfits should certainly not be glossed over by critics, reflecting one context in which the SRA’s reforms are harnessing industry trends rather than moving against them.

Such sentiments at least reflect the SRA’s insistence the new regime is a response to an industry beset by technological, generational and cultural change. Notes former SRA director of policy Crispin Passmore, who was a major force in drawing up the reforms before he set up a consultancy last year: ‘We are moving to a position where talent is about how well you do in the assessment, not about your training course – the same as any other profession. If law firms want more than the minimum, then fine. Law firms are already facing competition from the Big Four and New Law, and they are thinking differently about how they train.’

‘Ain’t broke’

Enthusiastic as the reformists are, their arguments have done little to convince the larger sceptic camp that the overhaul is valid. Indeed, whatever the merits of their case, a neutral observer would conclude the SRA has done a dismal job of bringing on board the profession’s predictably resistant stakeholders.

Examples include the chair of the Law Society’s education and training committee Alan East, who spent about five seconds of his 40-minute interview with Legal Business saying that ‘in principle we agree with having a centralised assessment’ and the rest explaining his long list of concerns.

‘The flexibility has also got to be a positive because there is not just one size fits all.’
Ray Berg, Osborne Clarke

In early November, Chancery Lane’s Junior Lawyers Division (JLD) called on Parliament to scrutinise the LSB’s decision to back the shake-up in principle last year. The group, which represents around 70,000 law students, trainees and junior solicitors, claimed that the introduction of the SQE is ‘by no means a foregone conclusion’.

While most believe an 11th-hour veto is highly unlikely, there is mounting pressure on the SRA to undertake further consultations before submitting the application for the final go-ahead from the LSB next summer. Such calls echo perceptions that earlier consultations largely ignored the feedback (the two main exceptions were the SRA accepting calls to insist qualifying lawyers hold a degree-level qualification and fixing the valid work experience period to two years).

And many academics go further. ‘The SQE as it stands is not fit for purpose: it does not test the things the SRA says it tests and there is a real risk it will devalue the legal profession as a whole,’ says Jess Guth, chair of the Association of Law Teachers.

The position of City firms is predictably more diplomatic but still far from enthusiastic. Says Macfarlanes senior partner Charles Martin: ‘The status quo has worked really well for us. From our perspective the system ain’t broke. There are concerns the gold standards of the present system should not be diluted. On the other hand, it clearly has a long way to go on social mobility. To the extent that the new system succeeds in broadening access to the profession, it will be doing something law firms will welcome.’

Berg, a long-time supporter of social mobility, is more positive, while agreeing that the SRA’s handling of the process left much room for improvement. He notes: ‘The underlying principle of ensuring consistency of standards for the profession is a good thing. The flexibility has also got to be a positive because there is not just one size fits all: even in the City there is a broad range of law firms. It encourages firms to take a much more holistic approach. It’s an opportunity to ensure flexibility.’

Yet in dozens of interviews for this article, the commercial legal profession remains fundamentally unhappy about the approach of dismantling the old regime in place of an untested replacement.

Certainly, controversies over what has been seen of the SQE will have not helped win converts. In SQE 1 ‘you have a huge number of multiple-choice questions and a couple of minutes to answer each, which means they cannot be that complex,’ says Guth. ‘Often in legal practice, things are not absolutely clear.’

‘There are concerns the gold standards of the present system should not be diluted. From our perspective the system ain’t broke.’
Charles Martin, Macfarlanes

The argument that the multiple-choice approach is used in the medical profession, the US Bars and the Qualified Lawyers Transfer Scheme (QLTS) is met with derision. Guth notes that in none of those cases is the test the sole method of assessing knowledge: you need to hold a degree in medicine to become a doctor, go to law school to become a US attorney, be qualified in another jurisdiction to sit the QLTS…

The SQE 1 pilot run in March attracted further concerns. A report published by Kaplan in July recommended that the open-question skills assessment element of the test be scrapped in its current form on the basis that it lacks reliability, accuracy and shows a worse performance from BAME candidates, which might be due to unintended bias.

At the time of writing, the SRA was yet to make a final announcement but was expected to drop the open skills element, which was originally aimed at ensuring people had a minimum standard of legal writing and research skills before starting work experience. Says Brannan: ‘We want to look holistically at how we assess skills across SQE 1 and 2. We’ll reach a decision in light of the SQE 2 [pilot] in the first half of next year.’

Nor is a further pilot of SQE 1 planned. Says Brannan: ‘The pilot was a success. The functioning legal knowledge assessment worked effectively.’ As for SQE 2, some of the details will only be confirmed after the December pilot, meaning education providers lack detail to design their new courses.

The deregulation of work experience is also a source of concern. ‘The SRA hasn’t given details as to practically how it will work,’ says East, adding that the Law Society is working with the regulator to set out detailed guidelines. Others, including the JLD, argue that ditching the requirement for work experience to be paid risks exploitation and entrenching privilege.

Moreover, the vision of a more open and socially mobile profession would be a lot stronger if it was backed by evidence that the new regime makes qualification cheaper. In November 2018, the cost for sitting the SQE was estimated at between £3,000 and £4,500. Of course, that is a lot cheaper than the £15,000-plus that elite institutions currently charge for their LPC. But it only covers the cost of the exam itself. While candidates might pick up the skills required for SQE 2 on the job, it is unlikely anyone will be able to pass SQE 1 without further formal preparation.

With no major law school announcing its tuition fees two years before the SQE is introduced, estimating total costs is difficult. Hutchinson offers some light, saying that BARBRI aims to keep costs under £10,000 including exam fees. However, it should be pointed out that some LPC providers charge considerably less than £10,000 for their LPC: fees at Leeds University, for example, were £8,500 in 2018/19.

Head of Exeter Law School Richard Moorhead makes a gloomy prediction: ‘Only ULaw, BPP and BARBRI have the expertise to run something of this scale: you have to develop a large bank of multiple choice questions, invest time and skills, and it will largely be those three that see value in doing that. The law schools lower down the league table will try to do that, but the universities teaching LPC have always struggled to get market share and I don’t see why it would be any easier for them to do it now.’

If universities prepared students to sit the SQE 1 during undergraduate law degrees, students would not need a separate preparation course. But given their distrust for the new exam, few academics are currently backing such a move. Guth reflects: ‘Less than half of law students are going to become solicitors. The simple notion that we might have degrees that are designed for the SQE is unethical.’

‘The reforms were presented as being about diversity initially and that argument has fallen. I don’t see anybody saying that anymore.’
Richard Moorhead, Exeter Law School

But perhaps the biggest obstacle is the attitude of City firms. While accepting they now have to focus on making the best of the regime, they are largely trying to make it look like the old one (see box, ‘New regime meets old law’, below).

As a result, the new system does little to bridge the gap between lawyers preparing for the SQE with a sponsoring firm and those going through the process without it.

The SQE tests few of the skills newly-qualified solicitors need for the City. While SQE 1 focuses on the six reserved legal activities, SQE 2 tests the skills geared towards a high-street solicitor rather than a Square Mile adviser. As such, firms will look to top up the SQE preparation with additional modules more fitting to City lawyers – M&A, finance, business development…

Many firms are also pushing for both parts of the SQE to be sat before their trainees even arrive to avoid having them out en masse to prepare for SQE 2 later on, which would undercut the notion that SQE 2 should test the skills acquired during training.

Far from broadening access to Big Law, the evidence points to an enduring two-tier profession: on one side, the few training at City firms, which will scout top third-year students at elite universities in the same way as now; and on the other, the many having to fund their way through the SQE at a similar price and potentially having to accept unpaid work experience. The latter group may end with the same qualification as the former, but it will not take them any closer to the top of the profession if elite employers do not trust that qualification ensures standards.

Even a supporter like Passmore concedes scepticism the reforms will deliver on social mobility, while Moorhead observes: ‘They presented it as being about diversity initially and that argument has fallen. I don’t see anybody saying that anymore.’

A question of belief

The introduction of SQE is compared to Brexit on several occasions researching this article, with people noting the SRA’s ideological fervour to demolish the old in favour of a bold yet uncertain new world. Under this reading, critics of the reform are at fault for not believing enough.

Bear in mind that legal education reform has been plagued by the conflicting agendas and incentives of various constituencies, a dynamic evident in the cross-profession Legal Education and Training Review (LETR), which begun in 2011, delivering a final report in 2013. Nevertheless, that report did ultimately conclude that the system overall was working well.

Probably the strangest tactic from the SRA was the willingness to demolish a status quo that enjoyed considerable support and had been refined over 25 years, rather than forge more targeted reforms that sat alongside the current framework.

The most obvious means of achieving that would have been introducing more standardised testing at the end of the LPC, as the Bar Standards Board did in response to the LETR, while introducing a new route with more flexible options for work-based learning.

Such reforms would have created a new route suitable to the growing band of paraprofessionals working in New Law models to qualify as solicitors, while working with the grain of the industry. They also would have been largely welcomed.

Yet legal regulators have rarely resisted the urge to upend established regimes, even though their ability to shape an educational ecosystem made up of a range of law firms, universities and vocational providers is profoundly limited. As it is, the sweeping nature of the reforms looks near certain to trigger the law of unintended consequences, not least that law firms show every sign of retrofitting the old regime into the new. As Moorhead concludes: ‘The SRA is not ready and they should be ready, and we should be clear about what’s happening.’

But ultimately, to borrow another phrase made familiar by Brexit, we are where we are. If nothing else, the introduction of more flexible routes to qualification looks a positive step reflecting structural changes in the legal industry. And there will be opportunities for the firms ready to seize them. Savage, citing the ability of the Big Four to harness such flexibility, concludes: ‘The irony is that the law firms have all the ingredients but haven’t noticed that they can make the cake.’ LB

thomas.alan@legalease.co.uk

marco.cillario@legalease.co.uk

The winding road to the SQE