Nepotism is generally bad but there is one small perk to it within reason - they know the person they are hiring more already. It is a form of risk aversion in that sense if they already know that a person is adequate - assuming they don't appoint someone regardless of being qualified.

I know of one case of using it productively involves incentives. If you have sensitive data to process that is resistant to automation but fundamentally simple and know a son of a high level partner who is receive considerable support from him with things like paying for college or apartments then that sort of nepotism makes some objective sense even if it is unfair. Betrayal on their part would also be betraying their family and harm their means of support.