We show that bureaucrats can exploit discretion in hiring decisions to engage in forms of favoritism that hinder organizational performance. We do this in the context of the Mexican federal judiciary. The arrival of a judge at a circuit results in the hiring of 0.05 relatives to key staff positions within the following year on average, a figure which is probably a lower bound of the overall effect. Moreover, we find that the appointment of relatives of judges to a court’s staff leads to a reduction in the court’s productivity, which indicates that such hires are motivated by rent-seeking rather than by efficiency purposes. Importantly for personnel policy, nepotistic hires are concentrated among judges who have been sanctioned for administrative offenses, those assigned to courts located in their state of birth, and those in higher-ranking positions.