Careers

Diversity, Equity & Inclusion

Experience

Innovation

Interactive Maps

Locations

About

Pages

Meet our team of innovators
Ask us how we do it

Professionals

Insights

Services

Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

Home | Thompson Hine LLP

Atlanta

Chicago

Cincinnati

Cleveland

Columbus

Dayton

Los Angeles

Minneapolis

New York

Silicon Valley

Washington, D.C.

<img style="max-width: 100%;height: auto;max-width: 100%;height: auto" loading="lazy" class="alignright size-medium wp-image-2491" src="https://www.thelawforlawyerstoday.com/wp-content/uploads/sites/754/2016/04/Unpaid-internships-300x272.jpg" alt="Unpaid internships" width="300" height="272">In&nbsp;today&rsquo;s soft legal services market, some aspiring members of the profession feel pressure to work for free,&nbsp;but the fairness of such arrangements in general&nbsp;has come under <a href="http://www.nytimes.com/2015/07/03/opinion/interns-victimized-yet-again.html?action=click&amp;contentCollection=Business%20Day&amp;modul&amp;_r=0">scrutiny</a>.&nbsp; In a twist (and just in time for the summer crop of interns),&nbsp;the New York State Bar Association earlier this month said that law firms can bill clients for services provided by unpaid legal interns, as long as the amount is not excessive, and the internship program complies with applicable law.&nbsp; If charged to clients as an expense, the law firm can build in its overhead costs, such as for supervising the intern, the Committee on Professional Ethics&nbsp;said in its <a href="https://nysba.org/ethics-opinion-1090/#" target="_blank" rel="noopener noreferrer">Opinion 1090</a>.
U.S. DOL standards judicially rejected
Last summer, the <a href="http://www.ca2.uscourts.gov/decisions/isysquery/d9055428-639d-4200-b09e-216153bacfc9/2/doc/13-4478_opn.pdf#xml=http://www.ca2.u">Second Circuit refused </a>to apply&nbsp;U.S. Department of Labor standards barring employers from deriving immediate economic advantage from unpaid interns, in favor of a non-exhaustive set of considerations that focus on what the intern receives in exchange for the work.&nbsp; The ruling overturned the grant of class certification in a wage case against Fox Entertainment.&nbsp;&nbsp;The Second Circuit also&nbsp;<a href="http://assets.law360news.com/0675000/675265/hearst.pdf">upheld </a>a trial court denial&nbsp;of class certification&nbsp;in another intern wage case against Hearst Corp.
Many law schools place students with private-sector employers who do not pay them; but the&nbsp;interns do benefit in some cases&nbsp;by getting&nbsp;academic credit.&nbsp; Whether and how clients can be billed for the work of such credit-earning interns was the subject of a law firm inquiry.
Billing intern work as fees vs. expenses
In response to the inquiry,&nbsp;the NYSBA ethics committee said that there was nothing in the state&rsquo;s ethics rules that would prohibit a law firm from billing clients for the services of a law student-intern on either a fee basis or as an expense to the firm, even if the firm didn&rsquo;t pay the intern or the law school.
The <a href="http://www.nysba.org/WorkArea/DownloadAsset.aspx?id=50671">state&rsquo;s version</a> of <a href="http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_5_fees.html">Model Rule 1.5(b)</a> mandates communicating to the client &ldquo;the basis or rate of the fee and expenses,&rdquo; and under Rule 1.5(a), as interpreted by previous opinions, neither the fee nor any expenses may be &ldquo;excessive&rdquo; &mdash;&nbsp;defined as one where a &ldquo;reasonable lawyer would be left with a definite and firm conviction&rdquo; that it is too much.&nbsp; Nothing in the opinion appears to require the firm to inform the client that although the intern receives academic credit, the firm is not compensating the intern.
While the firm could bill the student&rsquo;s work to the client as legal fees (by the hour or per task, for instance), the committee also approved&nbsp;the possibility of billing the work as&nbsp;an expense instead. &nbsp;In that case, the committee said, &ldquo;the lawyer may charge the client &lsquo;either ... an amount to which the client has agreed in advance or ... an amount that reflects the cost incurred by the lawyer&rsquo; to sponsor the intern (e.g., the cost of supervising the intern).&rdquo;
In other words,&nbsp;although the law firm does not have any direct costs in connection with&nbsp;using an unpaid intern, it does incur overhead costs, and may&nbsp;peg the expense value of the &nbsp;intern&rsquo;s work to include those costs to the firm.
ABA opinions on billing
The NYSBA&rsquo;s opinion tracks the <a href="http://www.americanbar.org/content/dam/aba/migrated/genpractice/resources/costrecovery/ABA_CommEthics_Opinion.authcheckdam.pdf">ABA&rsquo;s 1993 opinion</a> on billing issues.&nbsp; There, the ABA ethics committee said that&nbsp;in the absence of disclosure, it is improper to mark up expenses such as taxis and meals&nbsp;charged&nbsp;to the client unless the lawyer herself has incurred additional expenses beyond the actual cost of the disbursement item.&nbsp; Later, in 2000, the <a href="http://filehost.thompsonhine.com/uploads/ABA_Formal_Opinion_00-420_3ebd.pdf">ABA&rsquo;s committee expanded</a> the same principles to cover the work of temporary or contract lawyers.&nbsp; This most recent New York opinion continues the same line of reasoning to support using the lawyer&rsquo;s overhead cost to value an unpaid intern&rsquo;s work when it is charged to the client as an expense.
The social justice aspect of using unpaid interns is hotly debated; but at least in New York, lawyers and firms have some guidance about the rules of the road in billing clients.

core/freeform

Ethics

Legal Ethics, Professional Responsibility and the Business of Law

Unpaid legal interns’ work can be billed to clients as fees or costs, NY state bar ass’n says