Professional services
Law Firm Billable Hours Target Calculator
Sets a billable hours target, working back from what the firm needs to cover.
Result
Business arithmetic for running a practice, not legal advice. Fee agreements, contingency limits, trust accounting and fee splitting are governed by the rules of professional conduct in your jurisdiction, and several of them are strict. Check the applicable rules before any of this affects a client agreement. Annual targets sound manageable and translate into long days. The second figure here is the honest one: a 2,000 hour target at a 62% billable share is over twelve hours in the office every working day, and that is before any illness or slow week is absorbed.
Get a Free Business AuditHow the calculation works
The revenue required divided by the effective rate gives the hours the firm needs, divided by timekeepers to give an individual target. Working back from cost produces a target that means something, unlike a round number chosen by convention, and it also shows immediately whether the target is achievable.
What moves the number
- Revenue required including compensation, overhead and profit.
- Effective rate after realisation and collection.
- Number of timekeepers sharing the target.
- Non-billable obligations that reduce available hours.
Where this one goes wrong
If the target the arithmetic produces exceeds what the available hours can support, the problem is the rate or the cost base rather than the people, and raising the target changes nothing except morale. Check feasibility before announcing it. Targets also need differentiating by level, since a supervising partner carries non-billable obligations an associate does not, and a uniform target penalises exactly the work the firm depends on.
Before you quote
- Check the target against realistic available hours before setting it.
- Differentiate targets by level and non-billable obligation.
- Use the effective rate, not the rate card.
Questions
About this calculator
How should a billable hours target be set?
By working back from the revenue the firm needs at its effective rate, divided across timekeepers. A round number chosen by convention tells nobody anything, and a derived target also reveals immediately whether it is achievable at all.
What if the target is unachievable?
Then the problem is the rate or the cost base, not the people, and raising the target changes nothing except morale. An unreachable target also degrades time recording, because people stop believing the measure matters.
Should everyone have the same target?
No. A supervising partner carries non-billable obligations an associate does not, and a uniform target penalises supervision and business development, which are the activities that keep the firm supplied with work.
The formula
daily billable = annual target / working days; hours in office = billable / billable share
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How to use this calculator
- Annual billable target. Enter your own figure; the page starts at 1,800.
- Holiday days. Enter your own figure; the page starts at 15.
- Public holidays. Enter your own figure; the page starts at 10.
- Sick and personal days. Enter your own figure; the page starts at 5.
- Share of the day that is billable (%). Enter your own figure; the page starts at 62%.
The result updates as you type, so you can try a figure, see what it does to billable hours per working day, 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 |
|---|---|
| Annual billable target | 1,800 |
| Holiday days | 15 |
| Public holidays | 10 |
| Sick and personal days | 5 |
| Share of the day that is billable | 62% |
What comes out
| Result | Value |
|---|---|
| Billable hours per working day main result | 7.8 |
| Working days per year | 230 |
| Billable hours per week | 39.1 |
| Hours in the office per day | 12.6 |
| Hours in the office per week | 63.1 |
A 1800 hour target across 230 working days is 7.8 billable hours a day. At a 62 billable share that means 12.6 hours in the office daily, 63.1 a week.
How sensitive the answer is
Holding everything else steady and changing only annual billable target, this is what happens to billable hours per working day. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Annual billable target | Billable hours per working day |
|---|---|
| 900 | 3.9 |
| 1,350 | 5.9 |
| 1,800 example above | 7.8 |
| 2,700 | 11.7 |
| 3,600 | 15.7 |
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
- Annual billable target
- A number, between 0 and 4000, starting at 1,800.
- Holiday days
- A number, between 0 and 60, starting at 15.
- Public holidays
- A number, between 0 and 30, starting at 10.
- Sick and personal days
- A number, between 0 and 40, starting at 5.
- Share of the day that is billable (%)
- A percentage, between 0 and 100, starting at 62%.
What the results tell you
| Result | What it is |
|---|---|
| Billable hours per working day | The headline result. A decimal figure. |
| Working days per year | A number. |
| Billable hours per week | A decimal figure. |
| Hours in the office per day | A decimal figure. |
| Hours in the office per week | A decimal figure. |
Keep going
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