Kohinoor wrote:In my experience doing billing at a large corporate law firm, this idea that first years get a ton of their billable hours written off isn't based in reality. Those that do quickly earn themselves a meeting with a partner or senior associate. Overhead is substantial but likely not nearly enough to offset the profit an associate brings in. If you have evidence to the contrary, I'd love to hear it of course. Hm. I guess it would depend entirely on the collection rate of the firm. A firm collecting 50% from the client won't find a first year profitable.
But the search and hiring costs are quite high, as are termination costs, not to mention training costs (in addition to regular overhead, such as benefits, space, support staff, etc.). So, if you screw up and hire someone not fit for the position, you have generally spent more than you have brought in. The point was that hiring is an upfront financial risk for an employer. In a market system where the pool of applicants exceeds the demand of employers, they can be picky and they generally will follow the path of least resistance: hiring people who other decision makers they see as peers (or better) have already chosen. It's not just prestige for the sake of prestige that drives employers, but rather using your pedigree as a relatively inexpensive way of sorting that diminishes the blame the decision maker will find landing on his or her desk should the candidate turn out to be a poor choice.