"I have a training contract with a medium-sized London firm that starts in September 2009. The firm does a range of work including AIM deals, litigation, employment, corporate etc. Given that a large part of the firm's work will be badly hit by the current economic conditions, I am worried about how safe my training contract is. Can they just call me and cancel it?
"My concerns are now more acute because I have recently heard that they have made a number of their support staff and fee earners redundant. Unsurprisingly these have been mainly in their corporate and real estate departments.
"What is the likelihood of training contracts being cancelled for 2009 in the current economic climate? And if my contract was cancelled what would I be entitled to from them? Would they have to pay compensation or help me get a contract elsewhere (I know that is unlikely)?"
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It is unlikely that firms will be cancelling training contracts as they will need newly-qualifieds once the market recovers. I wouldn't worry too much. Might be an idea to have a word with Graduate Recruitment.
Great question. I am in the same boat as you. People have told me as trainees are cheap labour, a firm will honour the training contract. I hope they are right!
A medium-sized London firm is highly unlikely to cancel training contracts. Finding good trainees is hard, and they will want to get you through the door. At most they may offer voluntary deferrals by a year or even more to those who are tempted by a gap year.
Firms are getting rid of people who have expensive but unnecessary skills; trainees are neither expensive nor blessed with any skill, and so are not stuck in the wrong area and there is less of an imperative to be rid of them.
If times remain tight, though, you might find a lower proportion of your intake gets taken on upon qualification. So make sure you work hard and kiss the right arses whilst you get the chance.
Don't worry - they're more likely to be getting rid of their 4-8 year PQE associates than not taking on new trainees. Most firms learnt the hard way from the last recession that cutting off future growth by stopping homegrown talent from coming up the firm is a seriously bad move. It's much more sensible to lay off expensive mid-rankers when times are tough, and then make lateral hires at those levels once things pick up again. Trainees are a long-term investment and no sane firm would jeapordise this in a reaction to a temporary downturn.
No point worrying as some have said already, you're cheap and they will need to plan for the market upturn in a couple of years' time, so chances are that you'll start when you're supposed to - in which case, work hard and make sure you get picked to stay on qualification. As for seeking compensation - if they went back on their training contract, I think that's the wrong way to think about the situation, not least because you will scare other firms away from employing you. I'd try and negotiate so that you defer the start for a while. You might not want another gap year but a deferred start has to be better than nothing. The reality is that in this market ALL other firms will be tightening their belts - you might even say it would be a waste of your time to even think you could find another firm to take you on as a trainee. Don't worry, and be positive!
Any firm will lay trainees off as a very last resort. The PR would be terrible if they cancelled training contracts. Its just not an option, unless the whole firm is going out of business. I don't see that you have much of an alternative given that its now December, other than to wait, be positive and hope for the best. Chances are, you'll be fine.
The posters are evidently too young to remember the early 1990s when many City firms cancelled training contracts, in some cases 'buying off' the contracts. At the time it was unprecedented and regarded by many 'old school' lawyers to be bordering on the ungentlemanly. But then, as now, many firms had experienced rapid expansion followed by a collapsing economy. The circumstances were different but the effect may be similar. To the poster I say: take nothing for granted and have a Plan B in place.
I agree with Percy. The last downturn did see some contracts being bought off. If your firm tries to do that to you, suggest taking a gap year and for them to review the situation on your return. TCs are so hard to secure that you should do all you can to hang onto it. Good luck
Agree with the post above. A regional firm in Scotland of a decent size wrote to all of its 2008 intake saying that their offer of a traineeship had been withdrawn about two months before they were due to start.
It was suffering as its main competitor continued to pick up the best work in the area.
I don't think the almost-trainees in question got any compensation.
Probably unlikely in the bigger Scottish firms, and I'd be surprised to hear of it happening in a big City firm down south, but nothing can be guaranteed.
Trainees are cheap labour, essential in the current market. More worrying are the firms not retaining their trainees on qualification, as I now find myself (handy for them, it's not technically redundancy).
I have spoken to a few trainees who have been made redundant during their training contract in the last few weeks. Despite trainees being cheap labour, they normally require more hand-holding than experienced legal clerks or paralegals who are a bit older, more experienced and confident. I would secure some paralegal or clerking work for now in case things don't work out.
I am a victim of the credit crunch - my TC due to start this September was cancelled in July. It was offered in Oct '06. It was with a smaller regional firm, however. Not to worry you unduly, but solicitors firms are businesses out to make profit - they owe you nothing. I'm sure a London firm will have planned for their trainees properly, but there's nothing wrong with exploring the job market in case.
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