I have a training contract (TC) lined up to start next September with a top 10 firm. I have been having discussions with friends whose TCs start next September and in two years' time, all at top 10 and top 20 firms. A couple of those starting in 2009 are worried the credit crunch will mean their TC gets cancelled, especially those that are away on gap years.
I told them it`s unlikely as firms that big, with a broad range of practice areas, could cope with the crunch. Likewise, most are already recruiting for their next intake. Any thoughts?
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It's unlikely that any top-10 UK firm is going to admit that its financial difficulties are such that it won't honour its committment to providing you with a TC. It doesn't, however, stop them from offering you money to defer another year. This tactic, together with paying potential trainees to go away, has been used in other difficult times and usually results in such bad publicity for the firm concerned, others tend to avoid doing likewise. Yes the credit crunch isn't good news at the moment as clients struggle to quantify their exposure or restructure to avoid its worst effects. This has a knock on effect to law firms as some departments such as corporate may not be as busy with corporate finance work but may be busier with restructuring and corporate reorganisations. Litigators too seem to be getting busier (and chippier) so that should be good news for trainees. Also, don't forget that most of the top 10 have good cross-border networks and will be still very busy in emerging markets work. Some of that work, such as acquisitions for sovreign funds, will mean that they'll be busy for quite a while.
Agreed - no top 10 firm is going to want the negative publicity that goes with cancelling training contracts - they have spent a lot of money on you already sponsoring you through law school. During your training contract you get paid a relatively modest wage (compared to associates) and can, after not too long, start generating some revenue. As the previous poster pointed out, they may seek to encourage some trainees to defer (voluntarily). I don't see that this is such a bad thing - if your firm offers you money to defer why not take it and use it to go to a language school in France/Italy/China.... for a few months or something else that is fun and at the same time enhances your skills?
My former firm offered all its trainees the opportunity to defer for six-12 months when there was a slowdown in 1999. There was some cash on the table for worthwhile extra-curricular projects, such as language courses. Looking back, I wish I'd leapt at the chance!
More to the point, what impact will the credit crunch have on trainee qualification in September!?
I would be very surprised if TC's were cancelled. A TC is an investment in the future and no firm wants to find themselves with a shortage of associates at a junior level in a future years when things pick up again. If I was a current trainee approaching qualification I would be more concerned.
Agreed. When I qualified in early 2002, only about 80% of my intake was kept on. This was a shock as we'd only ever known 100% retention before then.
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