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Magic circle firms 'making loss on trainees'

Posted by: Laurence Simons 29/04/13

Trainees, eh? Who needs them? Whether they are tasked with keeping the coffee-cups of more senior workers full, sent to pick up holes for the hole punches, employed to reduce the morale of disliked employees by standing around them and talking about rock music, or given a strong grounding in the basics of a legal career, they are a ubiquitous feature of the modern law firm.

However, new research from the Lawyer magazine has indicated that these fresh-faced, optimistic baby lawyers are in fact costing the majority of magic circle organisations money.

Trainee attrition last year cost magic circle outfits more than £10 million between them, with top firm Allen and Overy the company that lost more cash than any of its counterparts.

Calculations based on 2012-13 cohorts show A&O wasted £2.8 million of the £11.1 million it spent on its prestigous trainee scheme - including the LPC course fee, maintenance grants and first and second-year salaries.

This has been calculated by suggesting that 28 of its 111 trainees were not retained, with an average spend of £100,000 on each one.

An A&O spokesperson said: "When you factor in revenue generated by the trainees during their contract we don't make a loss on our trainee group. But more importantly this a crucial investment in the future of the business. While retention rates may rise and fall with the market, there will always be a need to attract and retain the most talented people and that's an investment well worth making."

Furthermore, data compiled by the news provider indicated that retention rates are dropping slightly, falling by roughly five per cent over the last year.

It's impossible to gauge exactly why trainees are dropping out - some could suddenly discover a crippling allergic reaction to gavels, or run off to be scuba instructors in Goa - but despite the brave face put on by A&O, it's clear firms will want to keep their retention rates high in the coming years.