Free Law Firm Economics Calculators
A law firm is capacity multiplied by two percentages nobody multiplies
Four calculators for firm economics: the billable hours required before anything is profit, the three rates that decide what capacity is worth, the rate a revenue target actually needs, and what a daily billing habit produces across a year.
Law Firm Profit Calculator
Work out firm revenue from timekeeper capacity, subtract salaries and overhead, and find the billable hours needed to break even.
Result
Operating profit
$1,537,312
Break-even billable hours
5,338.2
- Collected revenue
- $2,937,312
- Gross value of time
- $3,472,000
- Total costs
- $1,400,000
- Profit margin
- 52.34%
- Profit per partner
- $512,437
- Revenue per timekeeper
- $367,164
- Effective rate per hour
- $262.26
- Overhead ratio
- 14.3%
This tool performs arithmetic on the values you enter. It does not provide legal advice and does not create an attorney-client relationship.
Break-even hours show the total billable hours the firm must record before it covers salaries and overhead at the current realization and collection rates.
Profit per partner here is a simple division of operating profit. It is not a compensation formula and ignores capital accounts and tax.
Read the full guide, worked examples and FAQ for this calculator →
Popular tools
The calculators visitors to LegalFirmTools open most often.
- Firm Economics
Law Firm Profit Calculator
Work out firm revenue from timekeeper capacity, subtract salaries and overhead, and find the billable hours needed to break even.
Open calculator → - Firm Economics
Firm Utilization Calculator
Measure utilization, realization and collection across the firm and see the share of total capacity that reaches the bank.
Open calculator → - Firm Economics
Rate Target Calculator
Work backwards from a firm revenue target to the average rate it requires once realization and collection are applied.
Open calculator → - Firm Economics
Firm Capacity Calculator
Convert a firm’s daily billing habit into annual capacity and the cash that capacity actually produces.
Open calculator →
Firms measure hours because hours are countable. Utilization, realization and collection are tracked separately, by different people, on different reports - and multiplied together almost never. When they are, three rates that each look acceptable frequently combine into an overall yield under two-thirds.
These calculators put the pieces in one place. The number worth knowing above all others is break-even billable hours: the total the firm must record, at current rates and current yield, before salaries and overhead are covered. Every commitment that raises fixed costs raises it.
Browse by category
Firm Economics
Profitability, rates and capacity for a practice.
Why use LegalFirmTools
Break-even in hours, not dollars
Hours are the unit a firm actually manages. Knowing the break-even in hours makes the effect of a hire or a lease immediately legible.
The three rates multiplied
Utilization, realization and collection compound. Fixing the weakest is worth more than pushing the strongest higher.
Rate setting from arithmetic
Work backwards from a revenue target, and see what leakage is adding to every hour the firm bills.
Capacity built from the daily reality
Forty-five working weeks, not fifty-two. Honest inputs produce a forecast rather than a wish.
How it works
- Pull real utilization, realization and collection figures from your practice management system.
- Calculate break-even hours before committing to any increase in fixed cost.
- Identify the weakest of the three rates and fix that one first.
- Test whether a rate increase or a billing-discipline improvement gets you further.
Frequently asked questions
Is this legal advice?
No. This website provides general informational and productivity tools and does not provide legal advice or create an attorney-client relationship.
What is the most useful number here?
Break-even billable hours. It is the total the firm must record before covering salaries and overhead, and it is the figure that should be checked before any hire, lease or new practice area.
Should partner compensation be a cost or profit?
Either, provided you are consistent. If partners bill, treating their production compensation as a cost and the remainder as profit usually gives the clearer picture.
Why not just raise rates?
Because it requires every client to agree, usually needs written notice on existing matters, and puts relationships into play. Improving realization and collection produces comparable revenue and requires nobody’s agreement.
Is any firm data stored?
No. Every calculation runs inside your browser. No revenue, cost or headcount figures are transmitted or saved anywhere.