On September 12, 2013, the U.S. Department of Labor’s Solicitor M. Patricia Smith issued a letter to the American Bar Association (“ABA”) stating that interns working in private law firms need to be paid in certain circumstances. The ABA specifically inquired into situations in which a law school places a student with a private law firm and acts as an intermediary to monitor the internship’s progress, and in which the law firm provides written assurance that the student will receive an educational experience and work exclusively on pro bono matters that do not generate fees for the law firm.
While the FLSA does not generally permit individuals to volunteer their services to for-profit businesses such as law firms, it does, however, permit individuals to participate in unpaid internships or training programs conducted by for-profit entities, if certain criteria are met. Thus, like many issues under the FLSA, the determination of whether a law student’s internship is excluded from the FLSA is fact specific.
According to Ms. Smith’s letter, when all of the following criteria are met, law students performing unpaid internships for for-profit law firms need not be paid:
• the internship is similar to training the student would receive in an educational environment;
• the experience is for the benefit of the student;
• the law firm’s regular employees are not displaced by the student, and the student works under their close supervision;
• the student’s activities do not provide an immediate advantage to the law firm;
• the student is not guaranteed a job; and
• both the law firm and the student understand that he/she is not entitled to wages.
Under such circumstances, “the student may be considered a trainee and not an employee,” even though the law firm may derive intangible, long-term benefits such as general reputational benefits associated with pro bono activities.
Internships involving students participating in or observing substantive legal work were also discussed. Smith wrote that, in order for the students to be legally treated as unpaid interns, such experiences should be consistent with the educational experience students receive in clinical programs.
Smith also addressed the ABA’s concerns “that recent law school graduates who have not yet passed any state bar should be able to participate in unpaid internships with law firms working on pro bono matters to the same extent as current law students.” She concluded that a graduate’s situation differs from that of a student because graduates have completed their legal education and law schools would be unable to act as intermediaries between the students and the law firms, so they must be paid.