Professional services
Law Practice Matter Economics Calculator
Whether a matter type is worth taking, from the hours it consumes and what it actually collects.
Result
Business arithmetic for running a practice, not legal advice. Fee agreements, contingency limits, trust accounting and advertising are all governed by the rules of professional conduct where you practise, and several are strict. Check the applicable rules before any of this affects a client agreement or a marketing decision. Absorbing overhead by the hour is the honest way to compare matter types, because a matter consuming forty hours uses four times the practice capacity of one consuming ten. Flat-fee work that looks profitable on the fee alone frequently is not once the hours are counted.
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About this calculator
Why absorb overhead per hour?
Because hours are the scarce resource in a practice. Charging overhead by matter count would make a short matter look as expensive to deliver as a long one.
What do I do with a loss-making matter type?
Raise the fee, reduce the hours through templates and process, or stop taking it. Doing more of it is the one response guaranteed not to work.
The formula
profit = collected fee - hours x overhead per hour - direct costs
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