Should Your Firm Focus on Business Development Before Hiring?
For a thriving law firm, hiring the right talent should be a top priority. Yet, some firms hesitate when faced with a recruiter’s placement fee, worrying about the cost instead of the value the new hire brings. This perspective is short-sighted. The firms that hesitate over placement fees are often the ones struggling to generate enough business to justify new hires. In contrast, firms with steady, high-volume work understand that hiring through a recruiter is an investment—not an expense.
The Economics of Hiring Through a Recruiter
The Financials of a Law Firm
A successful law firm operates on a simple business principle: revenue must exceed costs. When a firm has substantial work, it needs skilled attorneys to meet demand, and the cost of hiring those attorneys—including a recruiter’s fee—becomes negligible in comparison to the revenue generated.
Let’s look at the numbers:
An associate making $200,000 per year typically bills at least $500 to $800 per hour.
If the associate bills 2,000 hours per year, they generate between $1,000,000 and $1,600,000 in revenue.
After paying the associate’s salary, the firm still clears $800,000 to $1,400,000 in profit.
A typical recruiter fee for this hire is between $30,000 and $50,000, which is equivalent to two weeks of the associate’s billed work.
For firms with steady work, paying a placement fee is a no-brainer. It is a minor investment compared to the revenue that a competent attorney will generate.
Why Profitable Law Firms Don’t Care About Placement Fees
1. The Placement Fee Is a Low-Risk Investment
Most recruiter contracts include guarantees, such as:
Partial or full refund if the attorney does not stay for a full year.
Payment plans where the firm pays the fee over time, reducing upfront costs.
These terms significantly reduce the financial risk for the law firm, making the placement fee a minimal concern compared to the value the new hire brings.
2. The Recruiter Handles the Heavy Lifting
Legal recruiters do more than just introduce candidates. They:
Find top talent.
Screen candidates to ensure they meet the firm’s criteria.
Prepare candidates for interviews.
Act as a firm’s advocate in the hiring market.
This level of service saves law firms time and ensures they are hiring quality candidates, making the placement fee well worth it.
3. The Real Concern: Can the Associate Generate Revenue?
Law firms that are concerned with placement fees may not believe they can make money from a new hire. This raises a red flag. A law firm that is confident in its workflow and revenue stream knows that the right attorney will generate far more than the cost of hiring them.
Firms that balk at recruiter fees often:
Lack enough business to justify hiring.
Prioritize cost-cutting over quality hiring.
See attorneys as short-term expenses rather than long-term investments.
These firms are likely struggling financially and should focus on business development before worrying about hiring costs.
What Law Firms Actually Care About When Hiring
Successful law firms focus on three key questions when considering a new hire:
1. Can You Do the Job?
Firms want associates with the right credentials, experience, and skills to handle complex legal work. A recruiter helps ensure candidates meet these standards.
2. Can You Be Managed?
Law firms need attorneys who will follow instructions, work well with partners, and integrate into the firm’s culture.
3. Will You Stay Long-Term?
Hiring and training new attorneys is expensive. Firms prefer candidates with a stable work history who are likely to stay and contribute over time.
If a candidate meets these three criteria, the cost of hiring them is irrelevant—because they will generate substantial revenue for the firm.
The Red Flag of Cost-Obsessed Firms
When a law firm hesitates over a placement fee, it signals deeper issues:
They lack confidence in their future workload.
They see hiring as a cost, not an investment.
They prioritize saving money over securing the best talent.
These firms are often willing to hire the cheapest available attorney rather than ensuring they get the best person for the job. This short-sighted approach can lead to turnover, client dissatisfaction, and lost revenue.
The Bottom Line: Business Development Comes First
A firm that hesitates over a recruiter’s fee likely has bigger problems—it lacks enough business to justify new hires.
Successful firms know that hiring the right attorneys is an investment that leads to long-term profitability. Before worrying about placement fees, a law firm should focus on business development, client acquisition, and workload growth.
When a firm has enough work, the cost of hiring the right talent is insignificant. If a firm is overly concerned about recruiter fees, it may be a sign that they aren’t ready to hire in the first place.
Final Thought
For law firms, the real concern should not be the cost of hiring, but whether they have enough work to support new hires. Any firm hesitating over a placement fee should take a step back and focus on growing their business first. If you don’t have enough work, hiring isn’t your biggest problem—business development is.
