Profitability & Realisation Metrics

Moving beyond raw billables to effective hourly rates.

A lawyer billing $800/hr but collecting only 50% of it is less profitable than a lawyer billing $450/hr and collecting 98%. We break down the mathematics of legal profitability. Focus on the Effective Hourly Rate (EHR) to capture the true cost of administrative overhead.

MetricCalculationTarget
EHRCollected Rev / Total Hours>$250/hr
LockupWIP + Debtors<60 days

Effective Hourly Rate (EHR) Calculator

Implementation Pitfalls

  • Failing to document existing processes before applying technology. Software amplifies chaos.
  • Underestimating the cultural resistance from senior partners who measure value in hours billed.
  • Ignoring data egress fees and technical limitations in vendor API contracts.

Frequently Asked Questions

Why include admin hours?

Because your true economic value is based on the total time you spend running the practice, not just the time you can invoice.

How do fixed fees alter EHR?

Fixed fees reward efficiency. If you automate a task, your EHR skyrockets.

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