Case

Recruitment of Junior Attorneys

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Problem Definition

We are a reputed law firm. We are thinking of hiring associates right out of college at $120,000 per year. Do you think it is a good idea?


Comments

The case is designed to be presented to the candidate by an interviewer, who plays the role of a representative of a reputed law firm.


Short Solution

Hiring associates at $120,000 per year is a bad idea as a basic profit analysis shows a loss of $10,000 per associate.


Detailed Solution

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

I. Background

Wait for the interviewee to ask questions regarding the background of the case. A few sample questions are shown below. You could use them to help the interviewee with information, if he's stuck.

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

II. Revenue

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

III. Costs

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

IV. Solution

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

Revenue for one year = Hourly bill rate * Daily billed hours * Days worked per year = 50*8*300 = $120,000

Costs: Total cost = Salary + training costs + recruitment costs = 120,000 + 5,000 + 5,000 = $130,000

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

V. Concluding Observations

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.

Difficult Questions

If the interviewee solves the case very quickly, you could discuss factors such as:

  • Quality of lawyers
  • Raises to be given in subsequent years
  • Change in the associate's average tenure with the firm
  • Option of hiring experienced lawyers or cheaper legal assistant, etc
Related consulting question(s)
Best answer so far:
Ex BCG | MBB Specialist | #1 Expert for meetings done (800+) and recommendation rate (100%)

In addition to the previous comment, I would add that, as for all the fit interview questions, it would be important to have a proper structure to apply in the answer. A good framework for the classic... (more)

Best answer so far out of 2 answers:
Ex BCG | MBB Specialist | #1 Expert for meetings done (800+) and recommendation rate (100%)

Hi Anonymous, I do not have direct experience with the recruiting process with Bain London, so I will leave to someone else toprovide specific information on the timeline for the first round. I wan... (more)

Best answer so far out of 2 answers:
Current BCG consultant and case interview coach in University of Cambridge - here to get you an offer from any consulting company!

Hi, Let me jump in here, and speak based on my experience with BCG. Top tier consulting firms typically evaluate the following in order to invite a candidate for an interview: 1. Univ... (more)

Best answer so far:
McKinsey / Accenture / More than 300 real MBB cases / Collected all Big 3 offers / Harvard Business School

Hi, 1) Youproactively ask in the beginning, even before drawing the structure (something like "What kind of products / revenue sources do we have) and then split the structure into price, qty,... (more)

Best answer so far out of 2 answers:
BCG Consultant / Interviewed 80+ applicants at BCG / Received offers from McK (US) and BCG (DE)

Hi Anonymous! Both are valid approaches. As a rule of thumb, 1) is more suitable for a quantitative assessment (e.g. "By how much has profit declined?"), while 2) seems like a good approach for a... (more)

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