Recruitment of Junior Attorneys

This is a basic profit = revenue - cost analysis case.

Does the firm have work for new associates? If yes, could you please provide the hourly/daily billing rate and the number of hours/days billed?

• Hourly billing rate: $50
• Number of hours billed per day: 8 hours
• Number of days worked per year: 300 days approximately

Should I consider any other cost apart from salary, taxes, overhead, training and recruitment costs?

Please consider only salary, training and recruitment costs. We expect an associate to stay with us for a year.

• Training: $5,000
• Recruitment: $5,000

Let us first calculate the marginal revenue associated with adding a new lawyer.

A basic profit analysis tells us we will incur a loss of $10,000 per associate per year.

Hiring associates at $120,000 per year is not a good idea as a basic profit analysis shows a loss of $10,000 per associate per year. In case the salary figure is above market, we could consider offering a lower salary.