Professional services
Attorney Hourly Rate Calculator
Works an individual attorney's rate, where the number that matters is what survives realisation.
Result
The billable share is the number most people get wrong. Quoting, driving, chasing parts and fixing warranty callbacks are all paid and none of them are billed, which is why the honest figure is rarely above two thirds.
Get a Free Business AuditHow the calculation works
Target compensation plus overhead allocation divided by realistic billable hours, uplifted for profit, gives a nominal rate. Multiplying through realisation and collection gives the effective rate, which is what the hour actually earns. The gap between nominal and effective is frequently wide enough to change whether the practice works.
What moves the number
- Realistic billable hours after non-billable obligations.
- Realisation and collection, which together set the effective rate.
- Overhead allocation per attorney.
- Market rate for the area and jurisdiction.
Where this one goes wrong
The nominal rate is what appears on the engagement letter and the effective rate is what pays the bills, and a practice managing the first while ignoring the second can be busy at an impressive rate and short of money. Calculate both. Where the market will not support the nominal rate the cost calculation requires, the answer is usually fewer non-billable hours or better realisation rather than a rate the market rejects, since an unreachable rate produces no work at all.
Before you quote
- Calculate the effective rate, not only the nominal one.
- Check the nominal rate against what the local market supports.
- Address non-billable time before raising rates further.
Questions
About this calculator
What is an effective hourly rate?
The nominal rate multiplied through realisation and collection, which is what an hour actually earns after write-downs and non-payment. The gap against the headline rate is frequently wide, and it is the effective figure that pays the practice's costs.
What if the market will not support my calculated rate?
Then the cost side has to move: fewer non-billable hours, better realisation, or lower overhead. Setting a rate the market rejects produces no work at all, which is worse than a thinner margin on work you actually get.
How many billable hours should I assume?
Considerably fewer than hours worked, after administration, business development, supervision and professional obligations. Using an optimistic figure makes the rate look adequate when it is not, and the shortfall only appears at the end of the year.
The formula
rate = (income + overhead) / (working hours x billable share)
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How to use this calculator
- Income you need per year ($). Enter your own figure; the page starts at $85,000.
- Annual overhead ($). Enter your own figure; the page starts at $288,000.
- Working weeks per year. Enter your own figure; the page starts at 48.
- Paid hours per week. Enter your own figure; the page starts at 40.
- Share of hours you can bill (%). Travel, quoting, admin and warranty calls are paid but not billed.
The result updates as you type, so you can try a figure, see what it does to rate you need to charge, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Income you need per year | $85,000 |
| Annual overhead | $288,000 |
| Working weeks per year | 48 |
| Paid hours per week | 40 |
| Share of hours you can bill | 62% |
What comes out
| Result | Value |
|---|---|
| Rate you need to charge main result | $313.34 |
| Billable hours per year | 1,190 |
| Total to recover | $373,000 |
| If every hour were billable | $194.27 |
To take home $85,000 after $288,000 of overhead you need $313.34 per billable hour. Charging $194.27, the figure you get by ignoring unbillable time, leaves you short every week.
How sensitive the answer is
Holding everything else steady and changing only income you need per year, this is what happens to rate you need to charge. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Income you need per year ($) | Rate you need to charge |
|---|---|
| $42,500 | $277.64 |
| $63,750 | $295.49 |
| $85,000 example above | $313.34 |
| $127,500 | $349.04 |
| $170,000 | $384.74 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Income you need per year ($)
- A money amount, starting at $85,000.
- Annual overhead ($)
- A money amount, starting at $288,000.
- Working weeks per year
- A number, between 0 and 52, starting at 48.
- Paid hours per week
- A number, between 0 and 100, starting at 40.
- Share of hours you can bill (%)
- Travel, quoting, admin and warranty calls are paid but not billed.
What the results tell you
| Result | What it is |
|---|---|
| Rate you need to charge | The headline result. A money figure. |
| Billable hours per year | A number. |
| Total to recover | A money figure. |
| If every hour were billable | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.