Adelaide firm Adlawgroup has abandoned its proposal to offer law graduates ‘employment’ in return for $22,000 after the Law Society of South Australia raised concerns about its business model.
Adlawgroup, an offshoot of commercial law firm WBH Legal, was widely criticised after it revealed plans to charge graduates almost half an average annual salary to participate in a two-year 'employment' program.
In SA, law graduates must be employed full-time for two years before they can qualify for an unrestricted practising certificate. Adlawgroup intended to bridge this gap by having graduates pay upfront for a job opportunity.
Speaking with Lawyers Weekly, project manager for Adlawgroup and consultant for WBH Legal Tina Hailstone defended the proposal.
“The original concept of Adlawgroup was to quite significantly increase the number of [those] who could get access to employment, experience and learn how to be a lawyer,” she said.
“The intention never was to be exploitative,” she said. “[It] was to provide an alternative opportunity where others didn't exist.”
She said the program had been scaled back and that graduates would no longer have to pay $22,000 for a job. WBH Legal will now absorb most of the costs and run the program within its own offices.
She said the team had decided to “stop fighting this because it was very time consuming”.
“You get people hating you because you don't intend to pay except by commission, or something akin to commission,” she said. “And we say, 'everybody else is not paying them at all and none of their experience counts towards them being able to set up their own firms’.”
The issue of unpaid internships was highlighted by Australian Law Students’ Association last week after the group made a submission to the Productivity Commission.
While acknowledging that the Adlawgroup proposal was being scaled back, Ms Hailstone denied that this represented a significant change in the business model.
This conflicts with the Law Society’s interpretation. In a statement released on Monday, the Law Society said that there had been a “significant shift” away from Adlawgroup’s original plan to charge employees a mandatory fee of $22,000.
However, the Law Society said they have received little information about the proposed new model.
The Law Society has been in correspondence with Adlawgroup since June and has raised concerns that its offering may not be consistent with an employment relationship because remuneration is based on participants generating their own clients.
"If there is an employment relationship, the Law Society does not believe the participants will be able to generate sufficient work for full-time employment during their two-year contract period [to qualify for an unrestricted practising certificate], " said Law Society president Rocky Perrotta.
Ms Hailstone admitted that if graduates did not count as employees under the model, it would undermine the entire purpose of the enterprise.
However, she said that WBH Legal believes their program constitutes employment. She said that many businesses ask employees to bring in clients.
“We will continue to engage with the Law Society until they are satisfied that it is still employment,” she said.
Ms Hailstone said between 20 and 30 graduates had applied under Adlawgroup’s original model.
“One presumes somehow they […] could find access to those funds because they expressed a very keen interest in joining on that basis,” she said.
Ms Hailstone suggested these law graduates might have borrowed money from their parents or taken out bank loans to cover the $22,000 fee.
“When you enter law school there is a very reasonable expectation that when you come out of it you are going to be a lawyer,” she said.
“These are largely young people who have already invested a hell of a lot, not just financially but emotionally, into the career that they thought they were going to enter into.”
Ms Hailstone said training more lawyers was necessary to cater for the “literally hundreds and thousands of thousands of Australians each year who can't get adequate, affordable access to justice”.
Adlawgroup has said it will not launch the new initiative until they can provide participants with complete confidence in the program.
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