INTRODUCTION
These guidelines address the question of whether a law practice is entitled to
charge out for the value of their practice trainees’ contribution. The
guidelines are not meant to be an advisory or a Practice Direction but simply
an aide-memoire if a law practice chooses to charge out for work done by its
practice trainee. The Law Society is not making it compulsory or obligatory for
law practices to charge out for work done, contributions made or time clocked
in by a practice trainee.
EVOLVING RELATIONSHIP
Over the years, the relationship between supervising solicitor and practice
trainee has evolved. It has moved from an apprenticeship-style relationship
between pupil and pupil master to a relationship with the character of
employer-employee. Practice trainees want some certainty during their Practice
Training Period (‘PTP‘)
that their work is recognised and they add value to the law practice.
Similarly, supervising solicitors and law practices want to give due
recognition to the practice trainee for work done. This does not mean the
profession is abandoning its traditional paradigmatic pupil/pupil-master
relationship. It is recognising the evolving nature of that relationship with a
longer and more rigorous PTP from 2023 and preparing itself for the
future.
Charging out for the value of practice trainees’ contribution is consistent
with the incremental approach to training under the proposed training framework
of the Committee on the Professional Training of Lawyers, set to be in place by
2023. The Report published by the Committee on the Professional Training of
Lawyers (‘the Report’) recognises that the inability to charge out for the
practice trainee’s time is a strain on the law practice’s resources especially
with the PTP set to double from six months to one year in 2023. Giving the law
practice the option to charge out for work done by their practice trainee eases
the burden of taking on trainees especially for smaller law practices. It might
even encourage more practitioners to become supervising solicitors. This will
engender a greater sense of belonging, nurturing and guidance within the
profession which in turn will facilitate the transmission of values from
supervising solicitors to practice trainees, ensuring practice trainees who
eventually become practitioners maintain the high standards that the public
expects of an Advocate & Solicitor.
Furthermore, as clients are generally cost-conscious, they might be willing to
pay for work done by a practice trainee in lieu of for example, an associate
doing the same job. There are also “equity” practice trainees who are quick on
the take from the word go and who would be strongly adding value to files
whether on research, drafting or discovery. The important touchstone however is
that it must be clearly explained to the client in advance that that a practice
trainee will be apprenticing (under supervision) on the file for which the
client will be charged. The Letter of Engagement should clearly and
transparently explain this and also set out the basis for the charge (which
should be rational e.g. hourly rates or a premium to the supervising
solicitors’ rates to recognise the trainee’s work). If the client being so
apprised, and agreeable for the practice trainee to contribute to the file, it
will be a potentially win-win-win outcome for all three parties – the client,
the supervising solicitor and the practice trainee.
For the foregoing reasons, the Council is of the view that a rigid policy cast
in stone of not charging out for work done by a practice trainee belongs to
antiquity. While there is no denying the purity of the apprenticeship and the
fundamental nature of the training contract which is training, the time has
come to recognise the dignity and value of our trainees during the PTP in a
more meaningful way.
BENEFITS
First, we look at the benefit to all stakeholders on charging-out for trainees’
work and then address some of the questions you might have. We have also
included a sample practice training contract
for your perusal and adoption/adaptation if appropriate.
(1) Benefit from the
perspective of the law practice
Taking on practice trainees can be a costly affair for some smaller law
practices. Allowing the law practice to charge out for their practice trainee’s
contribution can help defray the cost of hiring a trainee.
(2) Benefit from the
perspective of the supervising solicitor
If the practice trainee knows the client is aware he/she will be working on the
file under the guidance of the supervising solicitor, while there is still
on-the-job training, this could serve as an incentive to put in quality work.
The benefit to the supervising solicitor is a higher standard of work from the
practice trainee and a boost in the efficiency levels of the firm.
(3) Benefit from the
perspective of the practice trainee
The understanding that his/her contribution and work adds value to the management
of the file gives the practice trainee the assurance that they are more than
just ‘cheap labour’. It recognises the dignity and worth of the practice
trainee (as a valuable team member) and the value of their contribution. It
could also secondarily, engender a trusting relationship between the practice
trainee and the law practice.
(4) Benefit from the
perspective of the Bar at large
Charging out for trainee’s contribution sends the signal that we as a
profession value our practice trainees and that they belong to the profession
from day one of their practice traineeship. From 2023, the 12 month PTP allows
supervising solicitors a much longer period to transmit knowledge, skills and
even expertise to their practice trainees. These 12 months afford an invaluable
runway to practice trainees to develop their skills and be an integral part of
the legal profession.
(5) Benefit to the
client
As a practice trainee’s billable hours will be less costly than an Associate’s,
some clients might opt to have a practice trainee work on their matter instead
of an Associate (especially for research, discovery, etc). It increases
flexibility of choices available to the client. The charge out rates of a
Senior Counsel, Partner, Associate and practice trainee are different. It is
important to list the charge out rates upfront so the client is aware of the
difference from the outset. The client cannot subsequently remonstrate that he
or she is dealing with a practice trainee instead of a Partner as the client
would have gone into the engagement with eyes wide open. Of course, in some
cases, the client may expect a waiver of any charge for the value, work or time
of a practice trainee but this is a function of market economics and the
bargaining power between client and solicitor for individual matters.
(6) Benefit from the
perspective of the public
Charging out for a practice trainee’s contributions sends the message to the
public that practice trainees are a valued part of the legal profession. They
are not orphaned, economic digits handpicked to provide free labour under the
guise of practice training only to be discarded at will after the end of the
practice traineeship. Practice trainees belong.
FAQs
Question 1.
What should I charge for
my practice trainee’s time?
From our research, we note that law firms in Hong Kong publish their trainee
solicitors’ rates at about one third of the charge of a 10 year PQE solicitor.
A rational and logical approach is something between a legal executive’s charge
out rate and a first year lawyer’s hourly rate.
Question 2.
Will my clients be unhappy
that a practice trainee is doing the chargeable work?
If it is explained clearly and transparently to the client that the practice
trainee will be part of the team managing the file, this situation should not
practically arise. It is the responsibility of the supervising solicitor to
make this crystal clear to the client in the Letter of Engagement and during
preliminary discussions with the client.
Question 3.
My trainee is not admitted
to the Supreme Court; wouldn’t my trainee be in breach of s.33 LPA
(Unauthorised person acting as advocate or solicitor) if I charge for his/her
work?
In discussions with your client, it must be explicitly stated that the
individual is a practice trainee and his/her work is fully supervised by a
qualified advocate and solicitor. Clearly and transparently state that the
practice trainee will be working on the file. This must also be explicitly
stated in the Letter of Engagement.
Your law practice should not hold out the practice trainee as an Advocate &
Solicitor and should ensure that the practice trainee is properly supervised.
Your practice trainee should not be allowed to practise law as a fully-fledged
lawyer as that would court risk. Emphasising that the practice trainee remains
a trainee and is neither qualified nor authorised to act as a qualified
Advocate & Solicitor will prevent a breach of s.33. We recommend that you
include this in your Letter of Engagement to nip any misperceptions on the practice
trainee’s role in the bud.
The practice trainee’s charge out rate should obviously not be the same as that
of an Associate. The lower charge out rate for the practice trainee is a
supporting indicator that they are not a full-fledged professional.
Question 4.
What about CPF
obligations?
If there is a clear employer-employee relationship, CPF obligations arise. The
CPF Board views the PTP as an apprenticeship, thus no CPF obligation will arise
unless the employer-employee relationship is established.
Question 5.
What about my obligations
under the Employment Act?
If there is a clear employer-employee relationship, certain terms of the
Employment Act will be statutorily implied such as leave and medical
benefits.
Question 6.
Does charging out
automatically mean an employer-employee relationship is established?
No it does not. However, in the interests of fairness to our practice trainees
and ensuring that the fundamental obligation owed by supervising solicitors to
train practice trainees is not derogated from, we urge all supervising
solicitors to sign a training contract with their practice trainees. Such a
contract will crystallise the practice trainee’s rights and obligations during
the PTP.
Question 7.
Is it compulsory to charge
out for work done by my practice trainee?
No, it is not obligatory. Charging out for the value of the practice trainee’s
contributions, work or time is only one means of recognising the worth of your
practice trainee’s contribution. Law firms may have other ideas of affirming
the dignity and worth of practice trainee (both tangible and intangible).
Click here for the sample practice
training contract.