Legal Recruitment from Ten-Percent Legal

Thursday, October 17, 2013

Are Local Authorities Ripping off the Tax Payer with the Rates they pay for Locum Solicitors?

I have been writing articles on the discrepancies between local authority rates and private practice solicitor firm rates for locums for some years now.

They are starting to get ridiculous.

To give a few examples:

1. We have over 500 immigration solicitors on our books. Most have a reasonable amount of experience. In private practice work the going rate on the permanent side is a salary range of about £20,000-£30,000. Very rare to get much more than this. On the locum side the hourly rate will almost always be about £20-23 per hour depending on the length of assignment. This is for legal aid work. For private and corporate immigration the rates can go up to around £30-40,000 and £25-28 per hour.

These are competitive market rates - if the market gets tighter, the salaries and hourly rates go up.

2. We have over 1,500 family solicitors on our books, about 200 of these have child care experience. Family solicitor locum rates are usually around the £25 per hour mark, going up to £35 per hour for professional locums and those in demand with repeat bookings. Salaries are usually around the £22,000-£40,0000 range.

Local authorities and NGOs are paying immigration locums around £30-35 per hour. To put this into context, this equates to a salary of £63,000 (7.5 hour day, 5 day week, 48 week year). Local authorities are paying child care solicitors up to £45 per hour, which equates to £81,000.

Why?

I went to a meeting one of our local authorities put on about 5 years ago when they switched over to a new way of working - the use of a Recruitment Process Outsourcing company. This basically meant the council outsourcing their HR department and a private contractor managing all the use of temporary staff across the county.

Suddenly any agency who wanted to supply to the council had to go through this company, which required agencies to purchase high levels of insurance, employ all locum staff and set fixed percentage rates for certain types of candidates - eg 18% for a solicitor.

The council staff assured us that this was the future. It meant lots of savings for the council in time, money and effort. I sat there at the time and thought that this was only going one way and that involved the council HR department laying off their staff. This was the only way the council were going to save money and this was all to do with the HR departments being extremely lazy and not wanting to call round more than one agency to find someone.

I shook my head in disbelief that someone could be so daft as to outsource their own job.

In fact I know that the main council employee was later being coached to find another post after being made redundant - less than 1 year after this meeting!

So why do I think that local authorities have ripped off the tax payer?

I think the LAs have created an artificial recruitment market with unsustainable hourly rates. The amounts indicated above for family law for example are more than most commercial property locums get in London in private practice.

Furthermore, most local authority locum posts tend to be longer term rather than shorter so the cost to the councils must be astronomical.

If our local council wants to get a locum in for 2 weeks to cover annual leave then they would have to contact their outsourcer and lodge the vacancy. The vacancy is then posted on a job board and an alert sent to a load of recruitment agencies at 'Tier 1'.

These agencies get first bite at the cherry. Each one will post CVs onto the site as quickly as possible, which are forwarded across to the council. If none of these are suitable, the Tier 2 and Tier 3 agencies will be offered a chance.

Each of these agencies will have had to comply with the outsourcers criteria to be allowed access - this includes employing locums - whereas in private practice most are self-employed and invoice directly - cheaper for all concerned and taking out high levels of insurance.

The market is set up to exclude smaller agencies, who really do not stand a chance of recruiting through the system. In law most locums are registered with a number of agencies anyway and so the Tier 1, 2 and 3 agencies will be almost certainly posting the same candidates.

As a result, every time a locum is used, I reckon the local authority is paying about 50% too much by way of hourly rates.

Is this a scandal?

I suspect most local authority locums will not think so!

After all, it is about time public sector work paid better than private practice, but what is the point in opening up services to the private sector and then creating a closed shop akin to the union dominance of workplaces back in the 1970s?

I reckon that in future this is going to be a scandal exposed in Private Eye or similar..... What do you think?

Jonathan Fagan is a non-practising solicitor and Director of Ten-Percent Legal Recruitment, owners of Interim Lawyers. We are not on any local authority panels, although we do have local authority locums!

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1 comment:

LauraLou said...

I think these are disgusting rates to be paid, especially when councils needs to save money instead of spend. Too often now are we seeing HR roles outsources instead of done in-house for a fraction of the cost. Laura, Tilly, Bailey & Irvine.