Can a law firm have unpaid interns? Rules for law-student and paralegal internships

The guidance that lays the test out is the U.S. Department of Labor's Fact Sheet 71.

Courts use the primary beneficiary test — seven factors — to decide whether an intern at a for-profit employer is an employee owed minimum wage and overtime, and no single factor is determinative.

A private law firm is a for-profit employer, so this is the frame that applies to your interns; the volunteer rule described below is not.

The seven factors the DOL lists are: (1) the intern's expectation of compensation; (2) the extent to which the internship provides educational training; (3) whether the internship is tied to the intern's formal education program, including academic credit; (4) how the internship relates to the academic calendar; (5) the internship's duration; (6) whether the intern's work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern; and (7) whether the intern is entitled to a paid job when the internship ends.

One factor deserves a law firm's special attention: complements versus displaces.

An intern who observes depositions, drafts under close supervision and gets structured feedback complements your team.

An intern covering a paralegal's caseload is doing work you would otherwise have to pay someone to do — and that is the displacement the factor looks for.

For contrast, the same fact sheet treats one arrangement as generally permissible without this test: unpaid internships at public-sector and nonprofit charitable organizations, where the intern volunteers without expectation of compensation.

A for-profit law firm does not fall in that lane.

Its interns are judged by the seven factors, and the outcome decides the money: an intern who is an employee is owed minimum wage and overtime.

No single factor decides the question, so treat the classification as a whole-arrangement call to make before day one — and to confirm with employment counsel.

The factors are weighed together on the facts of your specific internship; the label the position carries is not what decides it.

Academic credit is one of the seven factors — not a decision by itself.

The DOL's guidance is explicit that no single factor is determinative, so arranging credit through the student's school does not settle the pay question on its own.

A for-credit internship can be unpaid only where the full test still comes out the same way: the intern, not the firm, is the primary beneficiary of the arrangement.

The factors that reward an education-first structure are the ones a for-credit placement should be built around: a tie to the formal education program, a schedule that tracks the academic calendar, and a duration limited to the learning period.

The factor that cuts the other way is displacement — the intern whose productive output starts to substitute for a paid hire.

Credit paperwork does not change what that factor says.

Before the placement starts, write down what the intern will learn, who supervises, and which dates the internship spans.

If the honest description of the role is an extra pair of hands for the caseload, the test points toward employment — and employment means pay, with or without the credit.

The same frame covers practicums.

Where a paralegal student's program includes a practicum or field placement hosted by a for-profit firm, the pay question is the one Fact Sheet 71 frames for interns at for-profit employers: courts use the seven-factor primary beneficiary test to decide whether the intern is an employee owed minimum wage and overtime — and academic credit is one factor among seven.

The volunteer permission the DOL describes belongs to public-sector and nonprofit charitable organizations; it is not a for-profit firm's arrangement.

For a firm hosting a student, that means the same education test as anywhere else on this page.

A placement built around shadowing, supervised training exercises and feedback complements your paid staff.

A placement built around your intake backlog displaces them, and the credit the student earns does not move that factor.

The title on the placement does not decide anything either.

Calling a role an internship, externship or practicum does not make the analysis come out one way — the factors weigh the arrangement itself, and the label is not one of them.

Pay is the first question; what the intern may lawfully do is the second, and the ethics rules attach to law student interns whether they are employees or independent contractors.

The comment to ABA Model Rule 5.3 on nonlawyer assistants explicitly lists law student interns alongside secretaries, investigators and paraprofessionals — and says lawyers must instruct those assistants on the ethics rules, confidentiality above all.

An intern sits inside that supervision structure.

The duty structure itself — firm measures, direct-supervision efforts, responsibility for a nonlawyer's misconduct — is in our guide to supervising non-lawyer staff.

An intern is a nonlawyer for this purpose.

Model Rule 5.5(a) bars a lawyer from practicing law in violation of a jurisdiction's regulation of the profession, or assisting another in doing so — the assist clause is where a firm's exposure lives when an intern drifts into lawyer work.

Giving a student intern client contact, filings or advice-shaped questions to answer is an intern-sized version of the UPL risks that come with nonlawyer hires; our guide to paralegal UPL risks maps the boundary in detail.

What a law student may actually do for clients is state-specific.

California's Certified Law Student Program is the example our research verified: under rule 9.42(d) of the California Rules of Court, JD students who have completed one full year of law school — at least 270 hours — who have passed the first-year law students' examination (FYLSX) where required and are in good standing may be certified to provide legal services under attorney supervision.

That is California's program, not a national one, and it is the only state program our research verified.

Before an intern works on a matter, appears in court or signs anything for a client, check what your state's student-practice rules allow.

The hiring upside is real.

The Bureau of Labor Statistics notes that successful completion of a summer job or internship may result in an offer of employment after graduation.

For a firm, an internship is an extended evaluation — work product, client handling and judgment, all observed on real matters with less guesswork than interviews leave.

The same decision point is where the wage test bites.

One of the seven factors is whether the intern is entitled to a paid job when the internship ends, and the factors around it — displacement of paid staff, expectation of compensation — read the same way.

An internship that is effectively a hiring tryout — the intern substituting for a paid hire from the first week — accumulates the wrong kind of evidence.

Keep the hiring decision genuinely open, keep the work training-shaped, and make any offer at the end rather than a promise at the start.

When the answer is yes and the internship turns into a paid hire, the classification changes with it.

The federal regulation that exempts practicing lawyers applies to an employee holding a valid license to practice law who is actually engaged in practice — and for those employees, the salary requirements do not apply.

A graduate awaiting bar results, or an unlicensed law clerk, does not fit that rule: the role has to meet another exemption's salary and duties tests, or be paid overtime.

Where those lines sit for each role on your org chart is in our guide to exempt and non-exempt law firm staff, and the role itself is covered in our guide to hiring law clerks.

From posting to onboarding, the rest of the process is in our guide to hiring for your law firm.

One caveat belongs at the end of a page like this: the wage rules described here are the Department of Labor's guidance, and the practice-of-law rules are the ABA's model texts plus the state program our research verified — the version adopted in your jurisdiction controls.

Employer information, not legal advice; confirm an internship's classification with employment counsel, and your state's student-practice and UPL rules with the bodies that administer them, before you rely on any of it.