For a more detailed statement of the case for reforming the ABA rule, see this recent National Law Journal op ed by Thomas Wheatley, one of my current students at George Mason. As he points out, external employers may not be the only ones acting out of self-interest here. Much of the opposition to this reform comes from clinical faculty who run clinics where law students work for free. If students could get credit from doing paid externships, more would choose that option and fewer would participate in clinics. That, in turn would reduce the demand for clinical faculty, and diminish the pool of unpaid labor on which clinics depend.
(View the full article here).