Reference no: EM132324962

You are HR director for a growing law firm in Flagstaff, Arizona, which currently has need of writing sixty legal briefs every hour. Each of your company's attorneys can write on average six briefs per hour. You are considering hiring six paralegals to shoulder the load; each paralegal is slower than the attorneys and can write on average only two briefs per hour. You scan the current wages in the Flagstaff area (https://www.bls.gov/oes/current/oessrcma.htm) and notice that the attorneys in your company earn the local occupational median wage of $51.54 per hour, but that the prospective six paralegals will likely want to get paid their local occupational median wage of $23.12 per hour.

Question text

Would your company save money in the writing of the sixty legal briefs by hiring the six new paralegals and firing some attorneys?

Select one:

a. Yes. Since the paralegal wage is less than half of the lawyer wage, the company should hire the six paralegals, even if their productivity per dollar is lower than the lawyers.

b. No. The hiring of the paralegals decreases the marginal product per dollar of lawyers and increases the MP per dollar of paralegals, so the company would be hurt when the MP per dollar of the existing attorneys decreases.

c. Yes. The ratio of wages (lawyer wage divided by paralegal wage) is less than the ratio of marginal products (MP lawyers / MP paralegals), so there is less benefit to having only attorneys.

d. No. The marginal product per dollar for lawyers is greater than the MP per dollar for paralegals, so the company should not hire the paralegals. The total cost of writing sixty legal briefs using only lawyers is less than the total cost of writing sixty legal briefs using six paralegals and eight attorneys.