Anyone have insight into a firm’s cost per employee (specifically, cost per attorney)? I’m sure this varies based on many factors, but does 5x salary sound right under any circumstances? Would strike me as bad business sense, but I don’t have experience in management or business operations.

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The short answer- if the cost of employment is 5x the lawyers salary- they will not be employed for long. For an average associate making 100,000 the cost to the employer should be no more than their salary and quite frankly- much less.


There is a lot that goes into that determination, however…it’s not as easy as just saying x time the salary. Our firm looks at several metrics:

1. What are overhead costs- this includes non billable staff, equipment, extra licenses for software etc;
2. Health insurance and other benefits costs;
3. Any contracted payment structure;
4. Business licenses, taxes, work comp ins, liability ins., unemployment ins., etc.
5. Are they a producer, ie bringing in work and enough to give to others in the firm or are they just working off of others work; there is value added for the former;
6. Marketing expenses;
7. Billed time vs collectible time, ie actual receipts not just what you bill;
8. Time spent to collect on your bills and value lost as a result.

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