Why bother with uni and the SQE when non-graduate jobs pay the same as a solicitor at a small firm?
The UK’s imminent minimum wage hike could put students off pursuing a career in law, as smaller firms increasingly offer starting salaries on a par with those at McDonald’s — despite requiring new recruits to self-fund costly SQE courses.
The expected rise in annual pay for a full-time minimum wage worker — from £25,376 to £26,416 under Chancellor Rachel Reeves’ upcoming Budget — will be welcome news for millions. But City bosses warn that the gap between the minimum wage and graduate starting salaries in professional services roles, including law, is closing fast, particularly at smaller firms where long hours are common.
They argue the increase in minimum wage could deter young people from pursuing degrees if pay for non-graduate roles, such as working in McDonalds or supermarkets, remains broadly the same. This is predicted to hit students from lower socio-economic backgrounds the hardest, “as only the people who can afford to pay their way through university will be immediately incentivised to do so.” As one chief executive told the Financial Times:
“Why would young people take on £45,000 of student debt if they can earn the same stacking shelves?”
According to FT research, some smaller law firms currently pay first-year trainees little more than the current minimum wage. Law Society vice-president Brett Dixon warned:
“When a newly qualified solicitor in a small firm earns barely more than the minimum wage, graduates in entry level jobs are likely to lose interest in pursuing a career in the legal sector. Especially considering the long hours needed in this field, legal careers may not seem attractive any more.”
That said, law graduates still fare better on average than their peers in finance and other professional services roles. Data from the Institute of Student Employers (ISE) shows the median starting salary across graduate roles is £32,000, whereas entry-level law roles average close to £50,000.
This disparity is largely down to the bumper pay packets offered by elite City law firms. Three firms at the top of the Legal Cheek Firms Most List — Davis Polk & Wardwell, Milbank, and Sullivan & Cromwell — pay their first-year trainees a hefty £65,000.
Fortunately for aspiring solicitors, the ISE also found that the legal sector offers the largest salary increase of any graduate field, with average pay rising by 86% over the course of three years to £90,000.
Still, the gap between US firms paying big bucks and smaller regional practices looks set to widen further. And as firms face higher costs from rising graduate pay, increased national insurance contributions, and the planned introduction of “day one” employment rights, one FTSE 100 chair warned that hiring young staff has become a “high-risk venture”. Recruiters told the FT this could ultimately mean “fewer opportunities overall” as well as fewer graduates choosing to enter the legal profession in the first place.