The menace of unpaid legal internships: A statistical analysis

Interns must make clear that their time and effort, too, have value.
The menace of unpaid legal internships: A statistical analysis

Recently I have come across many people highlighting the menace of unpaid legal internship. The majority of the authors of such posts are the employer themselves.

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The initiation of dialogue from the employer side is a welcome given the issue virtually lacks any discussion. Law students in India find it unimaginable to present conditions of payment for labour and thus have been the victim of labour exploitation.

This in no way suggests that this is the general trend.

Many law firms, lawyers, government organisation and Non government organisations (NGOs) have a payment clause in their internship contract.

Rule 25 of the Bar Council of India Rules 2007 prescribes that every registered law student is required to intern during the academic year. They shall complete at least 12 weeks of internship for three year course and 20 weeks of internship for five years of course.

Many public and private colleges/universities allot academic scores to such internships. Therefore, legal internships is not just practical quotient in the legal profession but also holds normative value in terms of score and certification.

Internships in any stream are a way for students to attain experience in the profession or see the theoretical application in worldly incidents. Law students in particular learn legal artistry by doing legal work.

The diversity of work and the inherent value attached to such activities in the legal profession blurs the line between the labor of an intern and the labor of real employee. Such resemblance is problematic when you consider that one is being paid and the other is working “pro bono” by incurring an additional cost on her/his part.

It is in this background that we look at the menace whose symptoms are felt by the victim (if such an extreme connotation may be use) but whose treatment is only discussed in the cafeteria or during coffee breaks.

The discussion is not just theoretical but an account based on the feedback received by law students in very small survey. To maintain the accuracy of data the survey was shared with the close peers of the Authors. Therefore, the majority of the respondent (almost 60%) are in either 5th or 4th year of law school.

Stand of other jurisdictions on unpaid internship

In United Kingdom interns’ pay is contingent on the employment status i.e. whether they are workers, employees or volunteer. The observation is always made on the basis of whether they are entitled to Minimum Wage or not instead of the question whether they are entitled to any wage?

Interestingly student internships, schools work placements voluntary workers or work shadowing (not working but only observing) is excluded from any sort monetary benefit. What does these concepts entails and how do they ensure non exploitation of labor still remains in the grey area.

Lack of proper definition and legal status of terms like “internship” “interns”, “unpaid”, “work experience” and “work placements” have contributed to the woes of such candidates.

A report highlights the fallacies of the current UK laws and gives empirical data highlighting that a normal internship in London costs more than 1000 pounds/month which in any scale of conversion is not sustainable as an intern.

The United States Department of Labor (DOL) and many states use six criteria to determine whether internships in for-profit company operations can lawfully be unpaid:

1) the internship must be similar to training given in an educational institution;

2) regular paid workers are not displaced;

3) the intern works under close observation;

4) the employer derives no immediate advantage from intern activities;

5) there is no guaranty of employment upon internship completion; and

6) it is clear up front that there is no expectation of payment. The test is envisaged in all or nothing format i.e. all conditions must be satisfied for paying or not paying an intern. This test is based on the interpretation of “employee” by US Supreme Court (USSC) in Portland Terminal case.

US courts are shying away from using the 6 step pronged test because of its failure to take cognisance of present day internship mechanism and for being “too rigid”.. The other two tests employed by US courts are “economic realities” test (whether worker relies on employer to make economic benefit) and “primary beneficiary” test[1].

The latter is a balancing test to determine who is the primary beneficiary of the work done by the intern. The test gives leeway to Courts to adjudicate each case on its merits. The test also allows courts to take cognisance of the “economic realities” and “totality of circumstances” before adjudicating the dispute.

A federal district court in New York Glatt v. Fox Searchlight Pictures Incheld unpaid interns as employees and thus entitled to benefits. The court applied the primary benefit test to weigh the circumstances and ruled in favour of the plaintiff.

Court’s reasoning was broadly based on following observation that internship was not similar to training in an educational environment because the interns did not receive any formal training or education internship had only incidental benefit to the interns – resume value and references and Fox (respondent) was immediately benefitted from the unpaid work.

The court set out a list of 7 non exhaustive factors[2] that needs to be balanced while applying the test. The case warranted employers to be more vigilant in not just maintaining proper policies on internships.

In South Africa, the general definitions of employment appear broad enough to catch both paid and unpaid interns, at least when they are performing productive work. Germany and Romania, labour laws have been expressly extended to cover unpaid interns, even if they would not otherwise be classed as employees in the general sense of the term[3].

Unintended barrier creating class divide

IDIA’s Diversity Survey 2018-19 [4]reports some startling numbers on the background of premier law schools. On the Economic front the largest percentage (33.20%) of surveyed students comes from family whose annual income is over 15 Lakhs. Almost 68% students have annual family income of 7 lakhs or above.

The survey also highlights that the annual cost of legal education in top law schools is around 3-3.5 Lakhs. Around 82% surveyed students went to city school. Geographically northern and western states continue to dominate the demography in the law schools. The tribal population is either present in miniscule percentage or not present at all.

The 2015 article highlights how the cash crunch at India’s top premier law institutes (NLUs) lead to rocketing of fee structure. Lack of government support and ignorance of repeated demands leads to financial overburdening of law students, even after 5 years the problems cites hold true and there has been no considerable improvement or advancement in reducing this financial cost of law schools.

The above observation highlight the existing dire situation of economically weak law students who are sub served under the burden of exorbitant fee structure in law schools. The unpaid internship adds to their woes (discussion in later part of the article).

Charles Murray in a New York Times Op-Ed described internship as something which “amounts to career assistance for rich, smart children.” He goes on to say “Internships pave the way for children to move seamlessly from their privileged upbringings to privileged careers without ever holding a job that is boring or physically demanding.

”When viewed in the background of legal field these words need no further emphasis. It is argued that “internship culture” has become the source of class division pressuring the less privileged into financial sacrifices and excluding others (except well off candidates) altogether.

Observations

Many students from lower or even middle income background feel financially stressed taking on unpaid internship but take it anyways just to compete with their peers. On an average a law student does 1.5 to 2 internships in one academic year.

This is in line with the BCI mandate. However majority of such internships are unpaid.

It doesn’t appear an exaggeration when it is suggested that “Not paying interns is essentially condoning slave labour. It’s extremely bad for diversity and it undermines the value of what we all create.”

The miniscule percentage of the population that receives the stipend is not sufficient enough to meet even the residential or food cost in metro cities like Delhi and Mumbai. A study highlights the cost of living in a city like Delhi on a tight budget. A PF can be found for around Rs 3500-4000 including food.

However if anyone has lived in these PG then they are must be aware that the food is just good enough for your sustenance for a short span of time. However this rate varies depending upon the area of residence. An additional cost of Rs 2000-3000 is spent on the transportation.

Thus just a conservative estimate of residence, food and transport can be assumed to be something around Rs 7000-8000 per month. This is the bare minimum required for sustenance. In the survey 57%(approx) respondents received stipend of Rs 4000 or less. Only 33%(approx) received an amount between Rs 4000-7000.

Our respondents report that they learn, and learn well, through active engagement in legal work in law offices; that they do legal work which challenges them; and that their skills improve as a result. It won’t be a misplaced inference that many law students fail to perform well in initial years on litigation side because of lack of experience. This factor, in addition to other factors, has contributed significantly in keeping them away from joining the bar.

Analysis

The Economist report highlights that the menace of unpaid internship is not restricted to just legal field but rather it transcends way beyond and is rampant even in the highest corridors of the government. It has become a source of substitute professional work.

Such extreme conclusion is tough to draw vis-à-vis legal internships in India as law students cannot be presumed to be (and are not) so well trained to replace professional work. They can only be presumed to be just performing a part of it that may vary from case to case however there work of engagement at the employer’s office can be equated with the usual employee working hour.

Every study done within the past ten to fifteen years, and the experience of every law school, is that a significant number of upper division students work substantial hours in various law clerking positions. This is evident from the responses of the survey.

MacCrate Report, to make these bereft experiences educationally worthwhile recommended few aspects.

The following recommendation is worth quoting, “law schools and employers of law students to work together to inject educational value into any work experience during the law school years, developing models for strengthening the educational content of part-time employment and developing workshops offered at the beginning of the summer clerkship season to support the educational aspects of summer employment” (Recommendation 31).

In 2015 a young New Zealand activist and filmmaker made headlines for sleeping in a tent on the shores of Lake Geneva because he couldn’t afford to pay for a rent during his unpaid internship with the United Nation. This lead to mass youth organisations’ mobilisation asking for changes in the current structure of internship and ensure the right of the interns.

In pursuance of this International Labour Office released a working paper titled "The regulation of internships: A comparative study" which advocates that internationally internships or work experience arrangements should attract the same entitlements and protections as an ordinary employment relationship. A similar movement in India or initiation of dialogue with stakeholders will be one of the 1st steps towards a balanced understanding.

There was a proposal to introduce mandatory legal internship on the lines of compulsory medical internship before a law graduates starts practising. In many countries such as America and South Africa, legal internship is a compulsory part of law courses and a pre-requisite before a law graduate can start practising, legal experts said.

However a detailed analysis of the feasibility of the option was neer done before disregarding it. Similarly recently Delhi High Court observed that “The students who don't have ways and means to secure the internships get bogged down under the peer pressure to secure such internships". BCI assured the court that it will work towards providing adequate resources to law students so that they can avail these internships easily. A detailed proposal and working plan is still awaited.

Lastly, The Apprenticeship Act 1061 doesn’t cover internship within its purview. Nature of law internships are further complicated by the myriad terminologies used to define it and varying nature of “employers”. Additionally, the relationship is further complicated if we try weigh it in the background of labor laws.

The interns may qualify as “workers” under the Industrial Dispute Act by ascertaining the degree of control of employer over them however such employers must also constitute industry. Court has held solicitor firms to be outside the purview of “industry”[5] and charitable organisations as “industry”. This multi plurality isn’t ideal to structure the nature of relationship and corresponding rights of employers and interns.

Concluding Remarks:

Immediate redressal of the problem is neither feasible nor in the interest of interested parties. An ideal solution would be to start working towards implementation of standards that will govern the legal internships across country. BCI is the best placed authority to intiate this process.

BCI can take all the stakeholders and recommendations from many leading firms who have a comprehensive structure dictating the relationship of interns in the firm. These standards need to be stretched to other fields as well.

However a caveat is attached here that such compulsion might make employers reluctant to hire interns who will want freshers with internships but won’t offer themselves,[6] and hence a fine chord is need to be struck. Interns also have the same sense of responsibility to discharge the work in the best professional way and cannot be allowed to avail the benefit of stipend without any corresponding duty on their part.

It is argued that the safe path is to pay interns at least a minimum wage and for any overtime worked.

One author goes far to argue that unpaid internships are a self fulfilling prophecy: offers oneself as labor and ensure that paying jobs will be scarce.

Interns must make clear that their time and effort, too, have value and that value is more than the remote idea of a “networking opportunity” or one step further up a mythical career ladder.

Work is not, as the internship setting would suggest, an exchange of gifts.

Work is an exchange of time for money.

[1] After the 6 factor test was rejected by many circuit courts DOL adopted the primary benefit test in

[2]7 factor test

[1] Both parties understand that the intern is not entitled to compensation.

[2] The internship provides training that would be given in an educational environment.

[3] The intern's completion of the program entitles him or her to academic credit.

[4] The internship corresponds with the academic calendar.

[5] The internship's duration is limited to the period when the internship educates the intern.

[6] The intern's work complements rather than displaces the work of paid employees while providing significant educational benefits.

The intern and the employer understand that the internship is conducted without entitlement to a paid job at the internship's end

[3] See this for more details on foreign jurisdiction.

* Disclaimer: The information provided by the students in the present survey has not been independently verified by us. When analysing the survey data, one should assume a certain margin of error to account for misreporting (whether deliberate or unintentional) by the students.

[4] The survey is limited in its scope as it covers only 5 National Law Universities (NLUs).

[5] See Page 132 for detailed discussion on the issue.

[6] See this study on hiring of an intern in US

(The authors are final year students at the Dr Ram Manohar Lohiya National Law University)

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