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Is a Recruiter Worth More Than Your Lawyer?

Is your recruiter worth more than your lawyer?Your new employee is great – they’ve settled in, made friends and started producing work that’s as good as you knew it would be. It looks like they’re a strong fit, and will stick around for a long time.

You’re pleased with the recruiter who found them, and you’re considering using them again to expand the design team… right up until you receive the invoice.


It feels like just four weeks ago they were sitting across from you taking a brief on the person you needed to find. How could they possibly have performed $15,000 worth of work in a month?

Even if they were working full time, solely on finding your candidate – which you know they weren’t – that’s an average annual wage of $180,000. That’s $80,000 more than you pay yourself! In fact… you don’t even pay your lawyer that much!

So, is a recruiter really worth more than your lawyer?

Well let’s break it down. Good lawyers charge $300-$800 per hour. Traditional recruiters charge 15-35% of the salary of the position they fill. For most roles, that leads to a fee of anywhere between $10,000 – 50,000.

When considering the time required to fill most roles, the effective hourly rate of a recruiter can end up being more than your lawyer.

Is the cost justified?

Sure, talent is critical for a business’ success, and attracting that talent takes special skills and networking. By no means am I diminishing the value a good recruiter can bring in finding the right talent.

Let’s consider for a minute though, what it takes to become a lawyer and charge upwards of $300/hr for your work (at least in the US):

Excellent high school performance, four years of undergraduate studies, LSAT tests, graduate law school for another three years, the Bar Exam, then at least a few years as an Associate.

It takes years, and thousands of dollars in education and training, for lawyers to be ‘qualified’ to charge at least $300 an hour.

On the other hand, while many recruiters have an undergraduate degree, initial requirements in large agencies can be nothing more than a personality test and sales background. While the requirements of the two jobs are clearly different, are the skills and value brought to the table by a recruiter really equivalent to that of a top lawyer?

For difficult positions, a good recruiter can save your company a lot of time and money.  However, most positions filled by recruiters are not Executive. The hours worked, and skills required, to recruit your next Customer Service Officer or Marketing Coordinator don’t really justify a price tag similar to that of a lawyer.

Recruiting is a professional service (when done properly). Like other professional services, hourly pricing can make complete sense. If the position was easy to fill, that saving should come back to you. After all, you’re the one who developed the great company culture and offered above-market rates to ensure you closed the right candidate quickly. If a position is difficult to fill, the recruiter continues to look for solutions rather than moving on to easier jobs.

Managing a recruiter by the hour sometimes makes hiring managers nervous. There’s a belief that recruiters may abuse the system and charge more hours than they actually spent.

And in many cases recruiters don’t want to charge an hourly rate, because they lose the potential for the outsized paydays associated with a traditional success fee.

The fact is, I don’t know anyone who would agree to pay a recruiter $500+ an hour. But in many cases, that’s exactly how much – and possibly more – they are being paid via the traditional commission model.

It’s time for the recruitment industry to change and begin charging according to the value of the services being offered.

Money In Hand” by Tax Credits is licensed under CC BY 2.0.

Michael Overell

Cofounder and CEO at RecruitLoop. Previously with McKinsey. Passionate about startups, health and technology. Surf when I can; ride a bike most days. Follow me @mboverell.

  • Renée Warren

    “If you can’t afford an attorney, you have no business being in business.” But the same can’t be said for a recruiter. ’tis why RecruitLoop exists!

  • DarrenJansz

    Michael , A really good article and I think you echo the thoughts of many business’s that feel as you have written. I encourage your train of business thought in this industry.

  • rossclennett

    Michael, people in glass houses, mate. You are an ex-management consultant. How many years experience did you have when McKinsey’s started charged you out at $300 per hour? Were you as qualified as a lawyer? Had you completed more study than most lawyers. What value were you adding to McKinsey clients at the age of 24/25 with little more than a few months previous corporate experience?

    Even after three years at McKinsey what was your charge-out rate and what value were you adding?

    It really is a bit rich for an ex-management consultant to start lecturing the recruitment industry about value.

    In case you haven’t read it I highly recommend Matthew Stewart’s book The Management Myth as a highly entertaining account of life as a ‘global management consultant’ and how effortlessly he pulls apart management consulting as any sort of credible ‘business science’.

    • Ross – as a blogger yourself, I’m surprised to see you play the man, not the ball.

      (see also: )

      I could address the content of your points. But I think two words in your comment say enough on my behalf: *ex consultant*.

      • rossclennett

        Thanks for your comment Michael, but I disagree, I am not playing the man. I have met you, like you and admire (and applaud) your entrepreneurial venture. None of my comments were about you as a person. My comment is about your former profession and the way it charges its clients and your avoidance of that inconvenient fact when taking a shot at the traditional recruitment industry.

        As to ‘playing the ball’, well, there are many things I could say but I don’t think a person’s study or qualification is necessarily the best way to make a judgement about the worth of the service they are providing. Providing a company with the right people at the right time is a highly valuable service; a service of which end-users have many options. The ‘hourly rate’ model (eg RecruitLoop) is one and the ‘success fee’ model (eg a large majority of the recruitment industry) is another. Clients also set up their own recruitment function. As soon as $15,0000 placement fees become superseded, as a value proposition, by a more effective value proposition then I am sure end-user clients will be quick to make that choice.

  • James

    Supply & demand determines the market price. If there is under demand then recruiters wont get work. If there is over demand for their services, they can justify a high price. The smart recruiter will find a niche where there is high demand and low competition in a market vertical that is underserviced by their competitors and where there specialist knowledge will enable them to gain an edge.

  • When I perform a search correctly, my work results in millions of dollars of value to my client, sometimes even billions. I think recruiters are way underpaid for what they provide as a service, and I would say there are very few lawyers out there that have my skills or intelligence. So, you sound like you are knocking the competition just to get a slice of the pie. You didn’t mention that Heidrick and Struggles charged $100 million to place Eric Schmidt, which might be an example of overpayment for services rendered, but on the other hand, if they can collect it, calling it an ‘overcharge’ is really a moot point. It’s an industry standard. If you want to be the McDonald’s of Search and make money doing cheap volume business, go ahead, but don’t knock the pros who provide much superior quality.

    The average income of an attorney in California is around $180,000 per year. They may be billing at $300/hr, but they are only earning $120/hr (assuming 1500 billable hours per year). Most of the money being paid to an attorney goes to the firm he works for — which is worthless to the client… most of what you pay for an attorney is not anything he sees (i.e. you are paying for nothing but the name of the firm he works for). Recruiters are not only right to pay equally, but because their commission is usually higher than an attorney’s rate, they are much more invested in the work, and provide superior service and results.

  • Mitch Sullivan

    Recruiter fees are whatever companies are prepared to pay. There are plenty of alternatives for the majority of jobs agencies are asked to fill – one of them is inhouse recruitment teams.

    I’d put hourly low in that list of alternatives, unless it was used for easy-to-fill jobs.

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