City lawyer speaks out after aspiring solicitor faces SQE fee clawback from top law firm

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By Angus Simpson on

42

Failed challenging exams, leading to the withdrawal of TC offer


A City lawyer has shared how a future trainee reached out for advice and support after her firm said it was rescinding her training contract and attempting to recover the costs of her SQE prep course, after she failed to pass the challenging assessments.

Chris Lee, a real estate lawyer, shared a now-viral LinkedIn post about two future trainees who had reached out to him after their training contracts were withdrawn due to SQE failures. One aspiring solicitor, referred to as “Amy”, told Lee that her firm went a step further — informing her they intended to recover the tuition fees and maintenance grants they had paid out, totalling a sum “in excess of five figures”.

Lee, sharing Amy’s story at her request, explains that she has not only lost her training contract — along with the £90,000 typically earned by trainees over two years at the firm — but now also finds herself suddenly unemployed and in debt.

The lawyer warns that the professional consequences can be severe. Without savings, if Amy is forced to declare bankruptcy, it’s unlikely she would be able to practise as a solicitor.

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The unnamed firm, described as “comfortably in the UK’s top 20” by revenue, does have the right to rescind training contracts, Lee acknowledges, though he notes that clawback is “very unusual”. He adds in the comments that Amy is “still in dialogue” with the firm.

The situation set out by Lee has garnered strong views, with over 400 reactions and some 50 comments. One CMS associate urges Amy to “name and shame”, whilst another commenter notes this makes the firm look “vindictive” and “cruel”.

Another trainee has highlighted the “luck” involved with passing the SQE with pass rates for SQE1 and SQE2 currently sitting at 44% and 81% respectively

Lee’s post subsequently made its way to the message boards of Reddit, where reactions were just as strong. Users described the firm’s actions as “heartless”, “disgraceful”, and “shortsighted”, with calls to “name and shame”—and one commenter branding the clawback “absolute scumbaggery”.

It’s unclear from the post how many attempts Amy took to pass the challenging exams, but law firms made headlines last year for their varied responses to candidates who didn’t succeed on their first try. Some firms were praised for their supportive approach, offering trainees multiple attempts. Others, however, faced heavy criticism for rescinding offers from those who failed to make the grade at the first attempt.

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42 Comments

Anonymous

This is disgraceful and if the SRA has any integrity left it should intervene. Shame on Julie Brannan for being the architect of the SQE model which has paved the way for this. There is no public interest being achieved here by being so punitive.

SQE survivor

The thing is why should firms give you a second chance when 99% of your fellow trainees have passed the exam. Additionally, the maintenance grant was given on the understanding that you will pass the exams and become a solicitor of the firm. It’s therefore within their rights to claw back the maintenance grant in accordance with the terms of the TC. It’s after all a commercial / business relationship / transaction.

(26)(107)

Dave the accountant

Less than half pass the SQE1. Considerably less than 99% pass SQE2. Your mathematical analysis may need some work even if you did pass the law parts of your training. Otherwise, your career in commercial law may be very short.

SQE survivor

I said 99% of your fellow trainees [within the firm]. Those who failed SQE don’t typically hold a TC.

Anon

To be fair, the c.50% pass rate of SQE1 is a national statistic, and I would assume that the figures are dramatically higher among those with City law firm TCs

Darth Vader

Because a lot of hopeless candidates take the exam. If you’ve got a TC at a top 20 law firm, it’s pretty embarrassing if you then fail to get in to the top 44 per cent of people taking the test, which suggests you’ve pissed the firms grant up the wall and not done any work.

SittingSQE

To be fair, on sponsored cohorts the pass rate is MUCH higher than 44%. I am doing the CCP and have heard the pass rate is VERY high.

Demanding the money back is insane though.

Anonymous

Because:

1. SQE isn’t fit for purpose and will never be a test of a solicitor’s ability to practise as a solicitor

2. The consequences of pulling a TC offer and launching the candidate into debt significantly outweighs the law firm’s reasons for doing so

3. The candidate should be able to retake as a matter of good sense and administrative efforts

The root cause is the SQE and how it has already devastated, and will continue to devastate, the legal market. The consequences will truly be felt in years to come.

ErnieMitchell’sAsbestosOutfit(Celery)

You sound extremely bitter. Anyway, the clawback is unenforceable under penalty clause/restraint of trade principles. “Amy” needs to challenge it on these grounds.

Overly keen law student

Can someone/ Ernie explain why it’s unenforceable in more detail? Purely out of legal curiosity

Retired lawyer.

I really hate seeing the pressure that aspiring lawyers are subjected to nowadays. I’m out of practice, but, if I were her, I’d be researching Class 2 presumed undue influence, if that’s still going nowadays. It may not be.

not a litigator

how is it a penalty when it reflects the genuine financial loss to the firm? The most it seems you could argue is that they can’t charge interest on top.

not saying the clawback is a good thing but the legal question stands.

Overly keen maw student

But it’s not their loss; it’s the money they’ve put in — they were never gonna get it back directly. They contractually agree to forego the money so it is not a loss flowing from the failure. But is it allowed as damages quantification? Can they claw back on the reliance interest? @litigators in the chat

Francis

One answer might be because the financial and psychological ramifications of failing the exam and then being landed with huge debt with no immediate income stream make it infinitely more humane for the firm to take the hit…

MachinaImproba

The pass rates are 44% and 81% as detailed in the article so your 99% of trainees passing first time is a number plucked from your imagination, and undermines your entire argument. You’re either foolish or wilfully distorting facts and neither are good qualities in a solicitor.

Critical thinking

As has been explained by others, the pass rate for sponsored students is between 95% and 100% depending on the sitting. Overconfidence in commenting…

Critical thinking

Tbf it’s the firm’s fault

Machiavelli

Why should the firm cover the costs of the SQE and maintenance grant. They entered into a contract with the trainee, with the consideration being that they will pass and join the firm on training contract. She failed to meet the terms of the contract so it is rescinded.

The candidates need to take responsibility for themselves and not expect the firms to pick up the tab for their failure out of partners profits, as much or little as they may be.

US Lawyer

Firstly, the contract is not ‘rescinded’. The terms of the contract are, in fact, being enforced.

Secondly, no one is questioning whether or not the firm has the contractual right to do this. People are questioning whether it is the morally right choice for the firm to put a young person in this situation given the hardship it creates. There are legal rights and wrongs and there are moral rights and wrongs.

Critical thinking

Agreed and also — do they even have the contractual right? I’ve heard anecdotally (and this is hearsay) of a big firm trying to get clawback and losing in the employment tribunal (idk what the terms of the contract actually said tho and i’m sure its case by case)

Cruel and stupid practice

This is such a braindead take.

Even from a business perspective what firm in their right mind expects to recover circa £20-30k from a TC holder? A full-time student at the start of their career?

They’ll have ruined her life with debt and bankruptcy with no hope of actually recovering the sum, which let’s be honest, is a tiny sum for a Top 20 Firm.

If you want to be “fair” about it, then lwts be 100% transparent. She should name and shame the firm. What trainee in their right mind would want to join that will ruin your life on a failure? What clients would want to work with such a damaged brand with predatory, and stupid, business practices like this? The brand damage will be a bit more than 5 figures.

Your understanding of “responsibility” is hilarious and your username is the icing on the cake; to be Machiavellian is to be ruthless for the sake of good results. Not to be cruel and stupid lol.

Critical thinking

Agreed —- no chance they’ll get their money back, so they’re literally just trying to ruin her life because they can. What tw***.

Anon

Not sure the clients will care. The firm have shown themselves to be heartless moral vacuums with no interest in anything that’s not money.

The average PE partner/Petrostate SWF boss will just think “fair play, my kind of people”.

Machiavelli

On this basis no one should pursue a tenant who can’t pay their rent on the grounds that it is immoral.

We life in a capital society which we encourage. Indeed had this trainee passed and qualified they would be part of rich lawyers of the future… who will pursue debts on behalf of clients regardless of whether it is moral to do so or not.

Critical thinking

Just because you have a contractual right to ruin someone’s life doesn’t mean you should. What a mug argument

Unfair

The SQE is a fair shitshow with the content and exams. I also would lay blame at the feet of the training provider(s). When I did SQE 1, it was sprung on us 2 weeks into the course that rather than taking the exams in July, they would be brought forward to January. After starting in September! Luckily I passed, but flk 2 by the skin of my teeth. But (and here’s my point) had i have been aware of only taking sqe1 within 4 months of starting, I would have made damn sure that I would have revised the material from the degree and bought to pre read all the revise sqe books (other resources are available). I don’t know the circumstances of their training experience or whether we shared a training provider (mine shall remain nameless But I thought they were Pretty Poor) but it seems to me with 4 months prep it really is not sufficient to stand a reasonable chance of passing let’s be honest some very challenging exams.

Intelligent scholar

I passed with only 3 weeks of prep. You don’t need 4 months to prepare for SQE1, let alone a year

Anon

No you didn’t lol

Critical thinking

This is a lie.

J Rae

Lots of people fail exams. That is an indicator, but not a compelling indicator, that they have failed to manage their priorities, an essential skill for City solicitors.
There may be a hundred mitigating circumstances, but in the last resort you need to pass exams
A career at the bar comprises repeated different examinations, often before a bewigged examiner, without any practical possibility of retakes. A career as a City Solicitor must be much the same. If you can’t pass the initial and final examinations, by whatever name, you are in the wrong job, and no City firm is going to put up with you for long.
As usual, we do not have the necessary facts to judge the possibly Draconian step of demanding repayment, but I can imagine situations where it would be clearly right or wrong.
I cannot any decent lawyer presuming to judge that question without knowing the
course of the applicant’s attempt(s)
Unless the applicant is a male WASP, no doubt they will proceed to play the discrimination game?

Scouser of Counsel

This wouldn’t happen at the Bar though, James.

Have you ever heard of an Inn asking repayment of a scholarship from a Bar student who failed the BVC/BPTC or didn’t get a pupillage?

I really want to know

Please name the firm. I want to see their TC applications cut in half. This really should be in the public domain.

Guest

Everyone pointing out that these training contracts contain a clause allowing for clawback is missing the bigger picture here – just because they CAN, doesn’t mean they SHOULD – both from a moral perspective but also from a commercial awareness perspective (think time/resources spent on pursuing this debt, bad press, etc).

Jacket Potato Kink Shamer

I don’t have anything in particular to add other than the fact I bloody love jacket potatoes. I saw a Tiktok of someone pouring butter chicken curry on a smashed jacket potato and it looked bloody lovely.

Kink Sharma

You need help, along with the Drynites troll!

SQEs Top Hater

The SQE and its consequences…

We’re now at the stage where even firms don’t know what’s going on. Some are refusing to sponsor future trainees, while others are caught up in this madness (presumably to save costs?).

I really feel for Amy and hope she isn’t forced to repay her course fees. When will we finally admit that the SQE is not fit for purpose? It’s frustrating trying to explain how unfair this exam is to those outside the legal profession (or even those who qualified before its introduction) because they just don’t understand the chaos it’s causing.

Anon

An idea: The SRA allows 3 SQE attempts. Shouldn’t law firms follow the same principle?

SQEs Top Hater

No, why should firms have to commit to paying almost £7,000 per candidate. Whilst I understand where you’re coming from, this would just reduce the amount of TC offers and force more people to have to self-fund. The exam itself needs to be revised..

London lawyer

The SQE is an unmitigated disaster in all respects. It reflects the utter incompetence which characterises the SRA. Truly, they have an ‘anti-Midas touch’: everything they touch turns to sh#t.

THE SRA WAS WARNED, but insisted that they knew better. See the comments under this 2020 story:

https://www.lawgazette.co.uk/news/childs-play-unprepared-15-year-old-scores-half-marks-in-super-exam/5103230.article

Order the comments by Most Liked, then see my own, which began:

“SQE is a pitiful abortion of a social engineering project which has at its heart the unevidenced assumption that if you create new, almost certainly inferior, routes to qualification then (a) more solicitor jobs will be created (they won’t: market demand won’t change, if anything it will worsen as the qualification degrades);”

And continued:

“The SRA’s lobotomised pursuit of the SQE is an immense discredit to it, and it suggests a regulator which is either too incomptent to realise its failure or too arrogant to admit it. Can we now – please – put a stake in the SQE?”

There are many more stories around the same time, including virtually the entire profession telling the SRA that the SQE would be a disaster. Sadly, the SQEis merely a symptom of a larger problem: the SRA is not fit for purpose. The Legal Services Act 2007 reforms have failed, and the SRA ought to be abolished, followed quickly by the SQE.

When designing a replacement, a useful comparator is both the New York and California bar exams. Qualifying in those jurisdictions is exponentially more rigorous than the UK, even under the old Articles or LPC regimes, let alone the SQE charade.

Anonymous

Amy chose to run enormous risks by entering a top law firm, so she is now paying the price. There is no free lunch in the world.

Reality

Aspiring lawyer signs contract then moans when it is enforced.

ThankfullyNonCityLawyer

Congratulations to those who passed the SQE but the whole concept of the SQE is laughable. Passing an exam does not make you a good solicitor. The traditional LPC and TC route were not broken and create more well rounded solicitors. The SRA has again shown it is not fit for purpose in another money spinning scheme. The sooner the Law Society goes back to its traditional role and the SRA abolished… the better

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