Professional services
Law Firm Realization Rate Calculator
Realization: how much of the time recorded actually makes it onto an invoice.
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. Realization has two separate components and they have different causes. Hours lost usually means scope creep or inefficiency the client will not pay for; rate lost usually means discounting at the point of billing. Reporting one blended figure hides which problem you have.
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About this calculator
What is a normal realization rate?
It varies by practice area and client mix more than by firm quality. Track your own trend: a rate falling over consecutive quarters says more than any benchmark.
Why separate hour and rate realization?
Because the fixes differ. Writing off hours points at scoping and efficiency; discounting the rate points at pricing and at how confidently fees are discussed up front.
The formula
hour realization = hours billed / hours worked; rate realization = amount billed / hours billed x standard rate
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