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Lawyers Can Ethically Bill for Unpaid Interns, in New York at Least

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By Casey C. Sullivan, Esq. on September 08, 2016 1:58 PM

You can bill clients for the work your student interns do, even if you pay those interns nothing. That's the conclusion of a recent opinion from the New York State Bar Association's Committee on Professional Ethics.

In March, the committee addressed the situation law student interns who work, for free, for local firms, in exchange for academic credit in lieu of cold hard cash. The firm could ethically bill for that student work, the committee concluded, though it emphasized that it spoke only of attorney ethics, not applicable labor law.

The Bar's Logic

The brief ethics opinion begins with a reminder that the rules of professional conduct require attorneys to communicate to clients not only the nature of their representation, but also "the basis or rate of the fee and expenses for which the client will be responsible." The same rules also prohibit "excessive or illegal fees or expenses."

"We find nothing in the Rules that would prohibit a sponsoring law firm from billing for the services of a law student-intern on a fee basis," the opinion states, "even if the sponsoring firm is compensating neither the intern nor the sending law school." If the intern is billed as an expense, rather than on a fee basis, the lawyer may pass along the cost of supervising the intern to the client. In either case, all that is required is that the intern receives academic credit, that the internship program complies with the law, that the education institution "does not object to the client charges," and that the charge is not excessive.

The opinion noted, however, that it was speaking only of an attorney's professional obligations -- and not "otherwise applicable laws." The legal status of unpaid internships remains somewhat in flux after the Second Circuit rejected the Department of Labor's standards regarding unpaid internships and adopted its own "primary beneficiary" test last July.

The Backlash

Though the opinion was released in March, it only gained attention recently, after Joel Stashenko covered the opinion in the New York Law Journal in late August. That coverage inspired a rebuttal from several law student and labor law groups, including the National Employment Law Project, the American Federation of State, County, and Municipal Employees, and several New York law student associations. The ethics opinion "fails to consider the circumstances of most unpaid legal internships and the important moral questions they raise," the groups claim. Further:

As many have documented, law students today are burdened with enormous debt, stemming from the unprecedented cost of undergraduate and law school education. At the same time, entry-level, paid jobs are scarcer than ever. Students who cannot afford to work for free, including many students of color, either must forgo unpaid internships and lose out on the networking opportunities they offer, or take on more debt in order to intern unpaid.

The opinion "not only undermines the right to be paid 'a fair day's wage for a fair day's work' enshrined in federal and state minimum wage laws," the letter concludes, "it devalues the work of aspiring lawyers and ultimately all legal work."

What do you think? Is billing for unpaid law student internships acceptable? Let us know below.

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