Monday, 24 August 2015

AdLaw Group - $22k Law Jobs - Why this is a problem.

I read this article on The Australian, which set out a little bit about the AdLaw group's $22k law jobs. The comments on the article, however, demonstrated just how little people understand about what it takes to become a lawyer. I thought I would try to clear that up.

I acknowledge the irony - this explanation will appear on a blog written by a lawyer, and probably read mostly by... well, me, but a few people around me who DO know what it takes to become a lawyer.

How does one become a lawyer?
This sounds like a simple question, but there is a bit more to it than is obvious.

Firstly, and obviously, one must earn a law degree. This involves completing the requisite courses to the requisite standard... duh.

Secondly, (in South Australia at least) you have to complete a post-graduate program, called a Graduate Diploma in Legal Practice. This involves the practical side of working as a lawyer, and includes at least 6 weeks' placement with a law firm (or legal body, such as the Crown or DPP). Frankly, this practical experience is the most valuable part of the Graduate Diploma, and is why people who work in legal firms as secretaries and clerks are often the most sought-after graduates - they have simply been around the business, and know what they are doing.



Once a person has their GDLP, they can apply for admission to the Supreme Court, and have to prove that they have completed the required elements, and that they are a 'fit and proper person' to practise law.

If admitted, they may then apply for a Practising Certificate, which costs around $5,000/year. This is usually paid by the person's employer, if they are employed.

For the first two years of full-time employment, a solicitor is only issued a restricted practising certificate, which means that they have a number of limitations. They cannot be a partner, they must be an employee, and they must be supervised by a lawyer with at least 5 years experience.

Once they have completed at least two years of supervised employment, they can apply to have their restrictions lifted, and can then act as an independent lawyer.

So what's the problem?
Fresh graduates are a liability. They have to be paid, which means an investment of at least $45,000/annum (plus super) by the employer. They have to be supported, which means secretaries, office space, printing/internet/computers, which realistically costs at least another $30,000/annum.

They also have to be taught and actively supervised, and this is where the costs really add up for a firm. It takes time for a senior lawyer to review client files, settle letters, and advise the graduate lawyer.

They also take up easy work which can be done efficiently by senior lawyers. What a senior lawyer can do 'in their sleep' is good work for a junior, because they can trudge through it, learning the ropes. But what a senior lawyer can do in 5 minutes might take a junior two hours. That work is still only billable at the one rate, and so the senior lawyer has lost easy billable work, and the junior is still taking a wage.

Then there is the fact that you can't let them see clients by themselves until the firm is satisfied that they know what they are doing. They have to sit in on senior lawyers' appointments until they know the practical side of things.

A graduate who scored straight distinctions may be absolutely at sea when confronted by a client with real problems. I could explain the concept of a criminal offence from the day I finished Crim 101, but could I represent you in court? No way!

So the firm hiring a junior has to shell out for wages, work, and time. If a junior lawyer is making a profit for the firm within 6 months, they are doing well.

Add to that the amount of legal work to go around. Much of the work which used to be reserved for solicitors is being cut away, such as the small claims jurisdiction of the Magistrates Court, and the changes to the personal injury motor accident system.

All of this adds up to a... cautiousness by firms thinking of expanding. It also explains why a solicitor with 2-3 years experience is such a hot commodity - they have the experience to start working and making money immediately, but without the high price-tag of a senior lawyer. They can usually be trusted to work without supervision, and turn a profit for the firm from day 1.

And now, try to get a job as a junior with no experience!

What is the AdLaw Group?
Their website (www.adlawgroup.com.au) says this:

is an exciting new law firm opening its doors in Adelaide in July 2015. Theconcept has been developed to fill the critical gap in the employment market for law graduates in South Australia.

It then talks about the 2000 law graduates with no employment prospects, and their proposal to offer them all jobs... if they can pay $22,000. The structure is that they will earn a living from the fees they earn, but have to bring in all their own clients. They offer supervision by senior practitioners, and "provide young lawyers with the real opportunity to invest in their future and learn their craft while delivering quality and value to our clients." (pdf here)

Sounds great, doesn't it! After all, the $22,000 will pay for their practising certificates, which will be well over $5,000/year. So in other words, these graduates will only be paying about $10,000 for supervision and an office.

This seems to clog a hole in the system - allowing graduates to get that vital 2 years experience and an unrestricted practising certificate, all the while earning a living!

So what's the problem?
There are a few. Firstly, the legality of this system. Whilst a graduate can do work, they can't act without supervision, and currently the supervisor must be employed by the same firm, and practise at the same firm. A local firm had a senior and a junior lawyer, and when the senior lawyer took time off to have a baby, the junior couldn't do any legal work unless there was another lawyer in the building.

But the graduate lawyers aren't 'employed' by AdLaw! They are working on commission, with no base salary or holidays, which means that they aren't 'employed.' They are effectively 'contractors.' So, on the face of it, because they are not allowed to work as a solicitor unless they are employed, the AdLaw group won't work.

Secondly, the only way for these graduates to make money is if they get enough work, and AdLaw isn't guaranteeing anything of the sort. They have to bring in their own clients, and hope they can bill enough to make ends meet. Since AdLaw will take a cut of any billings, but isn't liable to pay a salary, this seems somewhat unethical.

Thirdly, part of the reason there aren't any jobs is that there isn't enough work. Pumping 2000 new lawyers into the system will simply result in lots of under-employed lawyers, not lots more employed!

Fourthly, it isn't yet clear what sort of supervision these graduates will be getting. As described above, they need intensive supervision for at least the first six months, and realistically much longer.

Fifthly, I would be very nervous about being a client of this firm! There is no way of knowing how experienced your lawyer would be, and indeed, who their supervisor is! The website doesn't list any names whatsoever. The only way to contact them is via email, to a generic 'admin' email address.

A better way to resolve the employment prospects for graduates is to a) limit the number of government funded law degrees, and b) make it easier for firms to hire juniors. How to do that? Uhhhhhh

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