Professional services
Law Firm Capacity Calculator
Works firm capacity, where the leverage structure decides what the hours are worth.
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. Capacity at 100% is not a plan. Matters arrive unevenly, deadlines collide, and a firm running at theoretical capacity has no room for an urgent matter or an unwell colleague. Most firms plan against 80% to 85% of this figure.
Get a Free Business AuditHow the calculation works
Timekeepers times available days times billable hours per day gives capacity in hours, and at the rates by level it gives the revenue that capacity represents. The composition matters as much as the total, since the same number of hours generates very different revenue and very different margin depending on who holds them.
What moves the number
- Hours capacity by level.
- Rates and margin by level.
- Whether the work available matches the level that has capacity.
- Non-billable obligations by seniority.
Where this one goes wrong
A firm can have capacity and no way to use it, because the capacity sits at a level the available work does not suit: associate hours idle while partners are overloaded is a delegation problem rather than a capacity one, and hiring more associates makes it worse. Match the capacity to the work before concluding the firm is full or empty. The arithmetic also shows what unused capacity costs, which for salaried timekeepers is their full cost for the period.
Before you quote
- Check capacity by level against the work available at that level.
- Treat idle associate capacity as a delegation question.
- Value unused capacity at the cost of the salaried time.
Questions
About this calculator
Can a firm have capacity it cannot use?
Yes, when the capacity sits at a level the available work does not suit. Idle associates alongside overloaded partners is a delegation problem rather than a capacity one, and hiring more associates makes it worse rather than better.
What does idle capacity cost?
For salaried timekeepers, their full cost for the period, since the hours cannot be carried forward and the salary is paid regardless. That is the figure that makes delegation and business development look urgent rather than optional.
How does leverage affect capacity?
The same hours produce different revenue and different margin depending on who holds them, so the composition of capacity matters as much as the total. A firm planning growth should plan the mix rather than the headcount.
The formula
capacity = fee earners x annual target / hours per matter
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How to use this calculator
- Fee earners. Enter your own figure; the page starts at 4.
- Billable hours target each. Enter your own figure; the page starts at 1,700.
- Average hours per matter. Enter your own figure; the page starts at 28.
- Blended hourly rate ($). Enter your own figure; the page starts at $265.
- Realization (%). Enter your own figure; the page starts at 88%.
- Collection (%). Enter your own figure; the page starts at 93%.
The result updates as you type, so you can try a figure, see what it does to matters per year, 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 |
|---|---|
| Fee earners | 4 |
| Billable hours target each | 1,700 |
| Average hours per matter | 28 |
| Blended hourly rate | $265 |
| Realization | 88% |
| Collection | 93% |
What comes out
| Result | Value |
|---|---|
| Matters per year main result | 242 |
| Total billable capacity | 6,800 |
| Revenue at full capacity | $1,802,000 |
| Actually collected | $1,474,757 |
| Collected per fee earner | $368,689 |
242 matters a year at 6,800 billable hours. That bills $1,802,000 and collects $1,474,757, which is $368,689 per fee earner.
How sensitive the answer is
Holding everything else steady and changing only blended hourly rate, this is what happens to matters per year. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Blended hourly rate ($) | Matters per year |
|---|---|
| $133 | 242 |
| $199 | 242 |
| $265 example above | 242 |
| $398 | 242 |
| $530 | 242 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Fee earners
- A number, between 0 and 500, starting at 4.
- Billable hours target each
- A number, between 0 and 4000, starting at 1,700.
- Average hours per matter
- A number, between 0 and 2000, starting at 28.
- Blended hourly rate ($)
- A money amount, starting at $265.
- Realization (%)
- A percentage, between 0 and 100, starting at 88%.
- Collection (%)
- A percentage, between 0 and 100, starting at 93%.
What the results tell you
| Result | What it is |
|---|---|
| Matters per year | The headline result. A number. |
| Total billable capacity | A number. |
| Revenue at full capacity | A money figure. |
| Actually collected | A money figure. |
| Collected per fee earner | A money figure. |
Keep going
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