A law firm that came under fire for offering two-year work placements to law students if they paid them $22,000 has decided not to proceed with the project.

WBH Legal put plans for its new Adelaide-based firm, Adlawgroup, on hold in September 2015, after law students said the company was exploitative.

WBH Legal said at the time it was responding to an oversupply of law graduates who were desperate to find work.

It postponed the program "pending further analysis and engagement with the Law Society of South Australia (LSSA)".

"In particular, the firm was working to address the proposed fee for participation in the two-year Getting Started in Law program," it said.

In a statement released this week, WBH Legal said the firm would not be established despite a number of options having being explored.

"However, the concept is not economically viable without asking the participating new lawyers to invest in their own futures," WBH Legal said.

"While there were a significant number of applicants willing to pay the participation fee, the partners recognise that this carried the unpalatable consequence of creating an elitist solution to the fundamental problem of too many graduate and too few opportunities in law."

WBH Legal said its program did not address demand for legal services by people who had been "traditionally unable or reluctant, to seek professional legal advice and are therefore denied access to justice by circumstance".

WBH Legal said it had been more than a year since it put its proposed business model to the LSSA and still had "not received a response".

The Fair Work Ombudsman said it contacted the Adlawgroup in June 2015 in relation to "proposed employment models that involve charging new employees large upfront fees".

Law society welcomes Adlawgroup backdown

Law Society of SA president David Caruso said the backdown was good news.

"There was a benevolent motivation behind it, to try and find work for young people who are starting to find new careers," he said.

"The Law Society for a long time had concerns about the way in which that legal practice was to be operated, and the potential for young people to be brought into their careers on an uneven first step into their time in the law."

A Fair Work Ombudsman spokesperson said Adlawgroup was contacted in June 2015 in relation to "concerns about proposed employment models".

She said the company advised that it had not employed any employees under the model.

The spokesperson said the company was advised to seek legal advice before implementing any such model.

"The Fair Work Ombudsman has not received any requests for assistance from workers in relation to the matter," she said.