Why LL.M. students pay for their internships

By Desiree Jaeger-Fine

The other day I had a conversation with an LL.M. student, and he said, “You know what, Desiree. I am paying for my internship.”

“What do you mean?” I asked.

“Well, I receive two law school credits for the thesis I have to write for my summer internship, and I have to pay for those credits just like any other credit. Without these credits, I could not do my internship. Ergo, I am paying for my internship.”

He was not happy and struggled to see how fortunate he was to have an internship. I understand that his situation seemed unpleasant. We “work” at a law firm, write a thesis, complete other course requirements, and pay for those extra credits on top of it.

As often, I find myself liaising between unhappy LL.M. students and law schools. In this case, however, law schools have little opportunity to improve the situation. The reason is labor laws.

Internship versus externship

Intern- and externships are often used interchangeably, but they do have subtle differences.

Internships are usually longer than externships, which may last for only a few days. Internships are often more intensive and provide the intern with a firsthand experience, whereas externships provide job shadowing to the extern. Some schools use a different distinction and say that externships take place during the academic year and are compensated with school credit. Internships, on the other hand, take place over the summer and are frequently compensated with a stipend.

In this article, I will use the term internship to refer to placements during the academic semester or during the summer.

So, why do we have to receive credits and in turn pay for them to be able to do an internship?

Internship programs under the Fair Labor Standards Act

To legally offer an unpaid internship, “for-profit” private sector employers such as private law firms must meet the requirements of the federal Fair Labor Standards Act (FLSA).

In general, an employer is exempt from the payment requirement only if the intern is not in an employment relationship. The FLSA defines the term “employ” broadly as to “suffer or permit to work.” Internships in private law firms or companies are viewed as employment unless the following test determines otherwise.

The test for unpaid interns

There are circumstances under which LL.M. students may intern in private law firms or companies without compensation. The U.S. Supreme Court has held that this is the case when the work provides only an educational benefit to the intern and the employer provides aid or instruction to it. The determination of whether an internship or training program meets the educational benefit requirement depends upon all the facts and circumstances of each program.

All the following criteria must be fulfilled:

1.    The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;

2.    The internship experience is for the benefit of the intern;

3.    The intern does not displace regular employees, but works under the close supervision of existing staff;

4.    The employer that provides the training derives no immediate advantage from the activities of the intern, and on occasion, its operations may be impeded;

5.    The intern is not necessarily entitled to a job after the internship; and

6.    The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

In general, the more an internship program is structured around a classroom or academic experience as opposed to the employer’s actual operations, the more likely the internship will be viewed as an extension of the individual’s educational experience. This often occurs where a law school exercises oversight over the internship program and provides educational credit. On the other hand, if the intern is engaged in the operations of the employer (for example, writing memoranda, filing or performing other clerical work), the fact that the intern may be receiving some benefits in the form of a new skill will not exclude him or her from the FLSA’s minimum wage requirements because the employer benefits from the intern’s work.

Internships under state labor laws

As LL.M. students may have already learned, states can have additional labor laws. The New York State Minimum Wage Act and Wage Orders, for example, contain the state’s rules for pay and overtime. As under federal law, an intern is only exempt from the payment requirements if the intern is not in an employment relationship. Under state law, five additional criteria must be met to determine whether an employment relationship exists:

1.    Any clinical training is performed under the supervision and direction of people who are knowledgeable and experienced in the activity;

2.    The trainees or students do not receive employee benefits;

3.    The training is general and qualifies trainees or students to work in any similar business;

4.    The screening process for the internship program is not the same as for employment and does not appear to be for that purpose. The screening must use only criteria relevant for admission to an independent educational program. Educational institutions or other organizations should not consider employment-related factors when they place students with for-profit employers. They should only consider the needs of the student and the educational program;

5.    Advertisements, postings or solicitations for the program clearly discuss education or training, rather than employment, although employers may indicate that qualified graduates may be considered for employment.[1]

Because of these regulations, were law schools not to offer credit-bearing opportunities for such positions, then LL.M. and JD students could not do internships because law firms would violate labor laws. If you are lucky enough to find a paid internship — and you are eligible to be paid — the situation, is of course, different.

Even though it is a burden to have to pay for credits and write a thesis while also interning at a law firm, we should be happy about the internship opportunity. I encourage everyone to complement his or her LL.M. degree with an internship. It is different to learn about the law in theory and to see it in action. I am forever grateful to have spent a summer in a boutique IP firm and to write a thesis about “Zombie Trademarks.” Those three months in the firm showed me more than any class could have ever done. 

Desiree Jaeger-Fine is principal of the Jaeger-Fine Group, a career management firm for international attorneys in New York, and author of "A Short & Happy Guide to Networking" (West Academic Publishing).

[1] New York State Labor Standards, Fact Sheet: Wage Requirements for Interns in For-Profit Businesses, https://www.labor.ny.gov/formsdocs/factsheets/pdfs/p725.pdf