In House Interim Lawyers

Navigating IR35 can be a significant challenge for employers in the UK, particularly after the reforms introduced in April 2021, which shifted the responsibility for determining IR35 status from the contractor to the client in the private sector. Employers now bear the liability for determining whether their contract workers fall inside or outside IR35. As such, it’s crucial that employers understand how to structure their relationships with contractors to ensure compliance while mitigating the risk of falling inside IR35.

Understanding IR35

First, it is important to understand what IR35 is. IR35, also known as the off-payroll working rules, is designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a limited company, but who would be an employee if the intermediary was not used. If a contract is caught by IR35, it means that the contractor should be treated as an employee for tax and National Insurance contributions (NICs).

Smaller Sized Businesses Exempt

End-clients will be considered by HMRC to be a ‘small business’ – and therefore exempt from the IR35 legislation – if they meet at least two of the following criteria for two consecutive financial years:

• Turnover of no more than £10.2 million
• A balance sheet total (assets) of no more than £5.1 million
• An average of no more than 50 employees

Key Factors to Consider

To ensure that a contractor is operating outside of IR35, employers need to consider several key factors that HM Revenue and Customs (HMRC) looks at:

1. Control: Employers should avoid exerting excessive control over how contractors complete their work. Contractors should have the freedom to decide how to carry out their tasks, without needing to adhere to strict company schedules or processes.
2. Substitution: The right of substitution is a strong indicator of self-employment. Contractors should be allowed, contractually and in practice, to send a substitute in their place should they be unable to complete the work themselves.
3. Mutuality of Obligation (MOO): This should be clearly absent in the contractual relationship. MOO exists when the employer is obliged to offer work and the worker is obliged to accept it. Contracts should be project-based, with a start and an end, and without the expectation of ongoing work.

Practical Steps to Avoid Being Inside IR35

1. Clear Contracts: Draft clear, concise contracts that reflect the true nature of the relationship between the parties. These contracts should include clauses that demonstrate a lack of control, the right of substitution without unreasonable restrictions, and the absence of mutuality of obligation.
2. Conduct Regular Reviews: The working practices should match what is stipulated in the contract. Regular reviews of contract terms and working practices should be conducted to ensure compliance.
3. Use a Confirmation of Arrangements (CoA): Employers should have a CoA document signed by both parties at the start of each contract. This document should confirm the actual working practices and that they reflect the terms agreed upon.
4. Provide Training and Support to Staff: Ensure that those responsible for hiring and managing contractors within your organisation understand IR35 and its implications. They should be able to identify potential risks and know how to structure relationships appropriately. Try to get away from the situation where your HR department just says ‘IR35’ to every contractor they come across.
5. Engage with Specialist Advisors: Given the complexities of IR35 legislation, consulting with legal and tax professionals who specialise in employment status can provide valuable guidance and help mitigate risks.
6. Implement a Robust Determination Process: Develop and implement a rigorous process for determining the IR35 status of every contract, using the Check Employment Status for Tax (CEST) tool provided by HMRC, supplemented with professional advice as needed.
7. Consider Outsourcing: If managing IR35 compliance becomes too cumbersome, consider outsourcing certain roles or using umbrella companies for contracting needs. This transfers the IR35 compliance obligations away from your company. Umbrella companies can be a nightmare to deal with so be careful..
8. Maintain Transparency with Contractors: Clearly communicate how IR35 determinations are made and provide contractors with the reasons for their status determination. This transparency can help manage expectations and reduce disputes.

You can run a test on the HMRC website to see whether or not your arrangement is caught by the rules.

Conclusion

Contractors hate IR35 and will try to avoid roles that fall within its remit. If at all possible try to keep consultant roles outside the provisions. Life is a lot easier and you will get a lot more interest for your role. For all private practice and in house locum legal recruitment please visit www.interimlawyers.co.uk.

Why Your Company Should Employ an In-House Lawyer in the UK

In today’s complex legal and regulatory environment with trigger-happy litigants looking for any excuse to sue the pants of anyone they come across, businesses face a range of challenges that can impact their operations, reputation, and bottom line. Employing an in-house lawyer can provide a strategic advantage by ensuring that your company not only remains compliant with the law but also has the capability to foresee legal issues before they escalate. This article discusses the reasons why employing an in-house counsel is beneficial to business.

Strategic Legal Insight and Risk Management

In-house lawyers are deeply integrated within the company, providing tailored (as well as confidential & impartial) legal advice. Unlike external firms of solicitors and barristers in chambers, who may require time to understand the nuances of your business, in-house lawyers have an intimate knowledge of your company’s operations, culture, and goals. This allows them to foresee potential legal issues, offer proactive solutions, and manage risks effectively.

Cost-Effectiveness

While the upfront cost of employing an in-house lawyer may seem high, over time, it can be significantly more cost-effective than repeatedly outsourcing legal work to law firms. Firms of solicitors charge a huge amount of money to provide external advice, mainly because they have to pay huge amounts of costs for professional indemnity insurance to cover them for any negligence advice. In-house lawyers can also manage a broad spectrum of routine legal matters internally, such as contract negotiations, compliance issues, and corporate governance, thus reducing the need for external legal fees.

Faster Response Times

Business moves fast, and decisions often need to be made swiftly. Having an in-house lawyer ensures that your company can obtain immediate legal advice, which is crucial when quick decisions are needed that have legal implications.

Improved Compliance

Compliance with laws and regulations is critical to avoid fines and legal penalties that can harm your business financially and damage your reputation. An in-house lawyer continually monitors compliance with UK laws and regulations, such as GDPR, employment laws, and industry-specific legislation. Their ongoing oversight helps ensure that your business operates within the law at all times.

Enhanced Negotiation Capabilities

Whether dealing with contracts, mergers, acquisitions, or partnerships, having an in-house lawyer skilled in negotiation can lead to better terms.

Training and Development

In-house lawyers often undertake the role of training and educating staff on legal matters, promoting a culture of compliance throughout the organisation. This can be particularly valuable in areas such as data protection and employment law (eg a lot of businesses still regularly fail to understand there are strict procedures for making staff redundant).

Professional Indemnity Insurance for In-House Lawyers

In the UK, in-house lawyers not are required to have professional indemnity insurance (PII) to advise their employers. Solicitors in private practice are very tightly regulated in relation to PII and often get charged a fortune for it. PII is insurance that protects against legal liability while performing their professional duties, covering both the individual lawyer and the organisation. As in-house lawyers are advising their sole client, usually their employer, they do not need the same PII as their counterparts in private practice. We understand that the current guidance from the Solicitors Regulation Authority (SRA) is to require in-house solicitors make sure they are satisfied with the level of cover their company has in place.

What Does an In-House Lawyer Do? An Insight into the Role and Salary Guide in the UK

An in-house solicitor or barrister, often referred to as in-house counsel, general counsel or corporate lawyer working in-house, is a lawyer employed directly by a company or organisation, as opposed to working for a law firm. This role differs significantly from that of a private practice lawyer due to its integrated nature within a business rather than serving external clients.

Role and Responsibilities of an In-House Lawyer

The primary responsibility of an in-house lawyer is to provide legal advice tailored to the needs of the organisation they work for, whether this is a company or a public organisation or institution. This advice covers a broad spectrum of areas including:

1. Contract Management: Drafting, reviewing, and negotiating contracts are fundamental aspects of the job. Usually involve contracts with suppliers, customers and employees.
2. Compliance and Risk Management: In-house lawyers monitor the business’s operations to ensure compliance with legal regulations. This includes GDPR/data protection law, employment law, and any industry-specific legislation. Identifying and advising on potential risks to the company is also a crucial part of their duties.
3. Dispute Resolution: In-house lawyers can handle any disputes in which the company is involved, although most in-house lawyers will swiftly outsource any litigation to external solicitors to handle. However work can range from litigation and arbitration to negotiating settlements. As ever with the state of the courts and the risk to most businesses of huge financial loss from continuing litigation, lawyers often work to resolve issues before they reach court.
4. Intellectual Property: For companies in tech, media, or manufacturing, protecting intellectual property is vital. In-house lawyers very often manage patents, copyrights, and trademarks, ensuring that the company’s assets are legally protected.
5. Corporate Governance: General Counsel or in-house corporate lawyers are heavily involved in many aspects of corporate governance, providing advice on company policies, the legal implications of business decisions, and ensuring compliance with corporate laws and regulations.
6. Employment Law: This includes advising on hiring practices, drafting employment contracts, managing redundancies, and dealing with workplace disputes. Quite often more senior counsel will outsource this side of things to external solicitors where possible.

The Strategic Role

In addition to these tasks, in-house lawyers play a strategic role by participating in executive decisions and sitting on the company board of directors, or governing body. .

Salary Guide

Salaries for in-house lawyers in the UK can vary widely depending on the sector, the size and type of the company, geographical location, and the lawyer’s experience. According to recent data:

• Starting Salaries: Junior in-house lawyers or newly qualified solicitors in smaller companies might expect to start at around £30,000 to £55,000 per annum.
• Mid-Career Salaries: With several years of experience, particularly in mid to large-sized companies or in financial services, technology, or pharmaceuticals, salaries can range from £55,000 to £95,000.
• Senior In-House Counsel: Those occupying senior roles or working in very large corporations, especially in London, can earn anywhere from £95,000 to well over £200,000 not including potential bonuses and other benefits.

Temporary In House Lawyers

Interim Lawyers are specialists for locum and consultant in-house lawyers in the UK and offshore. Get in touch with us to discuss our services or register an assignment here.

No, you don’t. Professional indemnity insurance is specialist insurance to cover you in cases where your company has provided negligent advice or services to a customer, and the customer seeks redress for your failings.

Solicitors who work out of a solicitors firm have to hold high levels of professional indemnity insurance, which usually costs many thousands of pounds, but this is because they are providing advice to members of the public and individual clients, and regulators have determined that clients need lots of protection in case of incompetence on the part of their professional advisers.

If you have your own in-house legal adviser working directly for you on a part-time, ad-hoc or fulltime basis, then they are providing you specifically with legal advice for you to act upon if you wish. If you decide to act upon it and the advice as negligent, then that is your own issue and nobody else’s.

If someone else acts upon the advice of your in-house lawyer, i.e., a third party, then this is where the insurance kicks in. However, because you are using an in-house lawyer who is specifically providing you with advice, and not third parties, you do not need professional indemnity insurance.

In fact, most in-house lawyers across the country who work for firms big and small, do not usually have their own professional indemnity insurance, simply because they do not need it. Quite a few will not have a practising certificate, because again they don’t actually need to practise and provide advice to individuals if they’re working on an in-house basis providing advice specifically to their employer or contractor (i.e. if they are a sub-contractor).

It seems to be a bit of a red herring for quite a few companies who seem to think they need professional indemnity insurance to take on an in-house lawyer. Funnily enough, they don’t think the same when taking on an accountant or some other professional working in the business, but only solicitors. I think part of the problem with this is that there is so much information online about professional indemnity insurance for solicitors that there is a considerable amount of confusion as to exactly what is needed and why.

The easiest way to sum it up is to say that professional indemnity insurance is in place in solicitors firms, and solicitors charge an hourly rate based on the fact that if they get the advice wrong to you and you act upon it, and suffer finance loss, you have a claim against them for negligence. If an in-house lawyer provides you with duff advice and you act upon it, then chances are you will not be able to get any compensation for it, because you were the person who recruited the in-house lawyer in the first place. This is why there is such a substantial difference in the hourly rates of solicitors firms compared with hourly rates of individual solicitors working for you as a contractor or part-time employee on an in-house basis.

So, essentially your decision on whether to take on an in-house lawyer or use an external firm of solicitors should not be based on whether or not one has professional indemnity insurance and one does not, but more on the relative skill levels you are going to get from each of the two options, and whether or not you want recompense if things go wrong.

If you would like to discuss using an in-house lawyer on an ad-hoc basis, please get in touch with www.interimlawyers.co.uk, specialists for in-house and private practice solicitors for over 20 years.

Am I considered as self-employed or as an employee?

About 95% of locums working through Interim Lawyers are self-employed. Working on a self-employed basis gives both the locum and the law firm or in house legal department so much more flexibility and is better from a tax perspective.

However the question as to whether the assignment is classed as self-employed or employed also depends on the Inland Revenue (HMRC). For example, if you worked for one firm for 3 years on a regular monthly salary payment equivalent, HMRC may well determine that your arrangement is one of an employee/employer and you would be treated as such from a tax perspective. It is quite clear however that locums engaged for short periods of time who regularly work for a wide range of law firms or in house legal departments are self-employed for the purposes of tax and national insurance.

Longer-term or regular locum employment for specific fixed hours each week may be regarded by the Inland Revenue and contributions agency as salaried employment and therefore liable to PAYE and employer’s NIC. We have never come across an arrangement that has fallen prey to this, but you do need to be aware of the tax implications of just working for one firm for a lengthy period of time.

Q: Am I covered by professional indemnity insurance if I work as a locum or do I need to take out a policy?

A: Unlike doctors and other professions, solicitors’ firm Professional Indemnity Insurance usually covers locum solicitors working on behalf of the law firm. In 99.5% of cases, locum and temporary members of staff are covered by our clients’ professional indemnity insurance policy. If you are unsure at any time before an assignment begins please contact us and we will gladly check for you. Whilst you are on-site with a client you can ask the firm’s practice manager or one of the partners and ask for confirmation.

Most law firms would be surprised to be asked about PII because it is taken for granted that locums are covered, but with all the changes in the market and different rules applying to so many areas of a law firm practice, it can be worth checking.

Some locum solicitors do take out their own policies just to be on the safe side, and the cheapest way of doing this is to use a price comparison site.

To give you an idea of the cost, we have professional indemnity insurance ourselves, although our terms exclude liability, and the cost is minimal – less than £30 per month. We would expect a similar rate for a locum solicitor because we understand that liability for any errors will rest with the client in most circumstances rather than the locum.

For a further article with advice on professional indemnity insurance, please visit: https://interimlawyers.co.uk/locums-and-professional-indemnity-insurance-2/

What are the locum rates of pay for a solicitor or lawyer?

This is a difficult question to answer but we a produce a monthly guide which you can access by clicking here.

The hourly or daily rate is usually a matter of negotiation between the parties although we very often specify an hourly rate based on discussions with our client before an introduction is made.

A lot of locums have an hourly rate they use to start negotiations and this tends to vary according to the length of an assignment. Longer assignments can sometimes attract lower hourly rates but not always.

Rates of pay can depend on the time of year, level of demand, availability of locums and the location of the assignment.

Q: What is the cost of having a locum?

A: Locum costs depend on a wide range of factors, but usually the rule of thumb is that the longer the assignment the lower the rates.

Location plays an important part in determining hourly rates. For example, if you work in Kings Lynn there are very few locums who live within say 75 miles of your offices. This means that a locum will have to stop overnight. Accommodation costs in Kings Lynn are usually reasonable so the hourly rate will not be that affected. However – if you are based in Newquay in Cornwall there are again very few locums residing close by but the accommodation costs at certain times of the year are exceptionally high so hourly rates will be considerably higher.

Length is the other major issue, although a good number of locums have become fairly immune to promises of length assignments that are offered simply to try and haggle the hourly rate down! It is fairly easy to spot firms who are trying it on and recruit a locum for 2 weeks cover at a low rate by indicating a likely duration of 6 months. The rates will probably be lower for longer-term assignments, but this can only be a very small reduction in a lot of cases.

Costs can be broken down into the following:

1. Hourly rate paid directly to the locum lawyer. This is usually termed as the “locum hourly rate” in our correspondence with you.
2. Our fee – this is paid separately and is based on 18% of monies paid to the locum.

There are no other costs. The locum will issue an invoice to you on a weekly basis, payable within 3 working days by BACS. We issue an invoice for our fee on a monthly basis, based on the amounts the locum invoices you for during the month.

As a general guide, the overwhelming majority of our locums work on a rate of £25-35 per hour (this has increased in recent times and varies year on year) – see our hourly rate guide for details.

Our fee of 18% is non-negotiable – we charge the same rate on every assignment – click here for our locum fee page. However, if a locum takes a permanent role with you we have different arrangements. Please contact us for details.

Q: How are locums screened – what qualifications do they have?

A: Our recruitment process involves all locums being thoroughly screened before being registered. We always obtain two professional references and get proof of ID/residence plus a copy of a practising certificate before arranging an assignment for a locum. Sometimes we do introduce locums who are available at short notice and then try and get the above documents over as quickly as possible. The skills sets of our locums vary so please let us know if you require any specific qualifications or accreditations and we’ll make sure that we find a locum who matches your requirements.

Q: How quickly can you respond to emergency requests?

A: We open the Interim Lawyers office at 08.30 hrs every weekday and we are able to respond very rapidly to requests for emergency cover for locum solicitors and lawyers. We can dispatch solicitors and lawyers within minutes of a call being made, although naturally, every call depends on the current availability and status of our locum teams.

Our out of hours service is operated by email. We regularly check for emergency cover requests throughout the evening as well as early morning, so if you need someone at short notice please email us at jobs@interimlawyers.co.uk if you get in touch after 5pm or before 8.30am.

Q: We are a Limited Company looking to use a Solicitor. Is having a locum or interim lawyer handling a case a cheaper option than using a law firm?

A: Yes, in a nutshell, but using a locum solicitor is a slightly different experience to engaging a solicitors firm to do the work for you.

Firstly, you will need to be aware that if your contracted solicitor makes a mistake, you will not have any recompense against the solicitor individually if they are acting as your company representative.

Secondly, you will be restricted to the knowledge an individual solicitor is able to provide rather than a law firm.

Thirdly, the solicitor will need to be contracted to you and will not be an independent lawyer per se.

Fourthly, you will need to check that an in house contracted lawyer can do the same things a solicitors firm can when dealing with your matter.

Whilst it is correct that the hourly rate is going to be dramatically different – budget for about £30-40 per hour for a locum or interim lawyer compared with £175-225 per hour for a solicitors firm, there are reasons for this – the main one being that if a mistake is made, you will have recompense against a law firm – they have professional indemnity insurance.

You cannot employ your own solicitor on a private basis for most types of work, but a limited company can indeed save substantial amounts by using an interim lawyer or locum solicitor. It really depends on the work you want them to do as to how they can assist.

Please note that we do not supply locums to defend winding up actions against your company or similar litigation. It is unlikely also that a locum would be prepared to handle professional negligence claims on your behalf. We credit check every limited company before accepting an assignment.

Get in touch with us to discuss your assignment, and we can advise as to whether using an interim lawyer will be the best course of action or cost-effective.

jobs@interimlawyers.co.uk

Q: How many locum legal recruitment agencies should I register my CV with?

A: As many as you like, but we recommend giving one agency priority over others. This will be the agency you have your primary relationship with and you can become a ‘trusted’ locum. We tend to know before sending out an assignment which of our locums is likely to respond, how long it will take them to respond, and also which one we are likely to go with once they have responded.

We also know that there will be certain locums who will only respond to us if they have already checked with their primary agency to make sure they do not have the same vacancy on their books as well.

This is good practice because your relationship with the locum recruitment consultant is extremely important for ensuring you get continued assignments flowing your way.

Obviously, for assignments in far-flung places where there are fewer locums, you will get more offerings if you are flexible on travel and this will open doors for you, but for assignments in central London for example we get a very healthy response usually for every assignment coming our way.

The use of the term ‘contractor’ tends to describe a situation where a lawyer or solicitor is working on an ongoing basis, usually to deal with excess capacity or a busy period.

The use of the word ‘locum’ tends to be used when referring to a lawyer or solicitor covering for sick leave, maternity cover, replacement cover (during notice periods) or any short term cover.

In the IT industry, quite a few skilled employees are used on a contractor basis to deal with specific projects. This does not tend to happen with the legal profession – projects per se do not tend to crop up. It is usually cover for specific incidents or periods of time that is more relevant.

Locums work on a self-employed basis. In other industries, contractors work on an employed basis via the employment agency that introduced them. In law firms, contractors work on a self-employed basis as well, not usually via agencies unless dealing with a large multinational.

Very easily! Simply click this link, download the form, fill it out and email or post it to us. We welcome all feedback on locum assignments, whether positive or negative.

There is no difference between a locum lawyer and an interim lawyer. It is just a question of language. We set up Interim Lawyers many years ago simply because all other domain names of a similar nature have been taken! Interim lawyers are exactly the same as locum lawyers; they work on an interim or temporary basis.

In-house interim lawyers work in the same way. There has been some confusion at times because of the way local authorities use the word locum when looking for staff, and in the past, there has been a distinction between lawyers working on a fixed-term basis to cover say annual leave for two weeks, and lawyers working on an ongoing basis covering specific cases or caseloads as and when required.

Some recruitment agencies have referred to lawyers working on an ad-hoc basis but ongoing as “interim lawyers”, and lawyers working on a fixed-term basis covering annual leave or similar as “locum lawyers”.

In reality, there is no difference between the two, but the differentiation has been made because of the way some locum solicitors are paid for their work.

Some recruitment agencies have a commission deal with umbrella companies (not to be confused with a dodgy backhander of course), whereby if a locum signs with a specific umbrella company, the locum agency gets paid a fee. Locums sign up to umbrella companies to get paid for work on a fixed-term basis and the umbrella company pays them as an employee of their own limited company. We have been offered £200.00 per introduction by umbrella companies, so we can only presume that there is some considerable profit to be made in their use. Umbrella companies however are really only relevant to locums who are working on a fixed-term basis, rather than ad-hoc as and when required. Our company does not recommend using them – they are, for most people, an unwanted administrative expense. We think this is why the terms have differed with some agencies – umbrella companies are not really relevant for ad hoc interim solicitor roles and more suited to a fixed term.

When a law firm or business uses our services to procure a locum solicitor, we charge a monthly introduction fee, which is calculated as a percentage of monies paid to the locum during their time working with your business.

The question that quite often arises is how long this fee is applicable for, and we know this has been subject to court proceedings in the past via other companies because we have been approached to comment on it and advise on our own experience. As far as we are aware, all our competitors charge their fees ad infinitum (and beyond).

Interim Lawyers will only request a fee for a set period of time from the date the locum or consultant invoices you for the first time. 

We have decided that it is much easier and fairer for everyone if there is a set limit to how long we enforce our fees for.

This arrangement works particularly well if you take locums on repeat bookings or want to use a consultant for ad hoc work.

You may want to ask our competitors how long their agreements will last for. Expect a Buzz Lightyear answer (to infinity and beyond for anyone who hasn’t watched Toy Story!).