LegalPracticeTools

Matter Profitability Calculator

Compare what a matter was priced at against what it is actually consuming, and project where it will end up.

Last reviewed

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Free · No sign-up · Runs in your browser

Firms measure profitability at firm level and price at matter level, which means the matters that lose money are averaged into the ones that do not and nobody finds out which was which.

This calculator works at matter level. It compares what was priced against what is being consumed, projects the final figure, and reports the variance - which on a fixed-fee or capped matter is the difference between profit and a loss nobody noticed.

Your numbers

Results update as you type. Nothing is sent anywhere.

Priced at
Actual
Progress

Result

Projected total cost

$22,520

Variance against price

$7,220

Status
Projected over budget
Priced total
$15,300
Consumed to date
$11,260
Remaining against price
$4,040
Price consumed
73.59%
Variance percentage
47.19%
Projected hours
66
Hours variance
21

This tool performs arithmetic on the values you enter. It does not provide legal advice and does not create an attorney-client relationship.

The projection assumes the remaining work costs the same per unit of progress as the work done so far - which is optimistic on litigation and pessimistic on repeatable transactional work.

Percentage complete is a judgement call. Base it on phases finished rather than on time spent, or the projection just restates the spend.

How to use the matter profitability calculator

  1. Enter the hours and rate the matter was priced at, plus any expenses allowed.
  2. Enter actual hours, the rate they were recorded at, and expenses incurred.
  3. Estimate percentage complete from phases finished.
  4. Read the projected total against the priced total.

What people use this for

  • Monitoring a fixed-fee matter against the price it was set at.
  • Deciding whether a matter type is systematically underpriced.
  • Identifying which matters are subsidising others.
  • Reviewing at closure whether the original price held.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A matter running over its price

Priced at 45 hours at $320 with $900 of expenses; 33 hours recorded at $320 with $700 spent, at 50% complete.

Projected total cost
$22,520
Variance against price
$7,220
Status
Projected over budget

A matter running to plan

The same pricing with 22 hours recorded at 50% complete.

Projected total cost
$14,880
Variance against price
-$420
Price consumed
48.63%

Fixed fees are where this matters most

On an hourly matter an overrun becomes a larger invoice and a conversation. On a fixed fee it becomes a smaller margin, silently, and the only way to find out is to measure the hours against the price.

A firm that runs this on every fixed-fee matter learns which matter types are priced correctly within a year. A firm that does not keeps repeating the same mispricing indefinitely.

Average profitability hides the distribution

A practice at a healthy overall margin can be composed of matters at excellent margins and matters at a loss, in roughly equal numbers. The average says everything is fine; the distribution says half the work should be repriced or declined.

Matter-level measurement is the only way to see the distribution. It also identifies the clients whose matters consistently run over, which is a separate and useful piece of information.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • Priced total = priced hours × rate + allowed expenses. Actual to date uses recorded hours and incurred expenses.
  • The projection scales spend to date by percentage complete.
  • Percentage complete should be based on phases finished; using time spent makes the projection circular.
  • The tool performs arithmetic or date counting on the values you enter. It does not interpret a rule, a statute or a contract.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This website provides general informational and productivity tools and does not provide legal advice or create an attorney-client relationship.

The date and deadline tools count days exactly as you instruct them. They do not interpret court rules, statutes of limitation, filing requirements or any other legal authority, and they do not know the rules of your jurisdiction.

Always verify any date, fee, or calculation against the governing rule, the court calendar and your own professional judgement. If you need legal advice, consult a lawyer licensed in your jurisdiction.

Frequently asked questions

Does this work for hourly matters?

Yes, though the consequence differs. On hourly work an overrun is a larger invoice; on fixed fees it is a smaller margin.

What margin should a matter make?

That depends on your cost structure and on what the matter is for. Some matters are deliberately run at low margin for relationship reasons - the point is knowing which ones.

Should I include non-billable time?

For a true profitability picture, yes - time spent on a matter that was never recorded as billable is still time the practice paid for.

When should I review a matter’s profitability?

Mid-matter, so something can be done, and again at closure, so the next one is priced better.

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