Professional services
Law Practice Revenue Calculator
Projects practice revenue, where the matter pipeline matters more than the rate.
Result
Service lines rarely carry the same margin. Splitting them is the only way to see which part of the business is paying for the rest, which is frequently not the part that looks busiest.
Get a Free Business AuditHow the calculation works
Matters per month times average matter value gives monthly revenue, scaled annually with margin applied. For a small practice the pipeline view is usually more useful than the hours view, because the constraint is matters arriving rather than hours available: a practice with capacity and no pipeline has a marketing problem that an hours projection will not reveal.
What moves the number
- Matters opened per month and the pipeline feeding them.
- Average matter value by practice area.
- Matter duration, which determines when revenue lands.
- Collection timing against the work performed.
Where this one goes wrong
Revenue lands when matters resolve rather than when they open, so a practice that doubles its intake sees the cash months later, and in matter types with long cycles that gap is wide enough to cause a cash problem during growth. Model when the money arrives rather than when the work starts. The other adjustment is mix: a practice with both quick transactional matters and long contested ones has two revenue patterns, and blending them into one average hides both.
Before you quote
- Project when revenue lands, not when matters open.
- Model short and long matter types separately.
- Use collected amounts rather than billed.
Questions
About this calculator
Why does revenue lag intake?
Because revenue lands when matters resolve and bills are paid rather than when matters open. A practice that doubles intake sees the cash months later, and in long-cycle matter types that gap is wide enough to create a cash problem in the middle of growth.
Should I project from hours or from matters?
From matters, in a small practice, because the usual constraint is matters arriving rather than hours available. An hours projection assumes work exists to fill them, which is exactly the assumption worth testing when capacity is sitting idle.
Can one average matter value be used?
Not where the practice handles both quick transactional work and long contested matters, since they differ in value, duration and cash timing. Blending them produces an average that describes neither and a projection that is wrong in both directions.
The formula
revenue = matters x average value; gross profit = revenue x margin
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How to use this calculator
- Matters opened per month. Enter your own figure; the page starts at 28.
- Average value ($). Enter your own figure; the page starts at $2,600.
- Gross margin on this work (%). Enter your own figure; the page starts at 58%.
- Share of total revenue (%). Used to show what the whole business turns over.
The result updates as you type, so you can try a figure, see what it does to matter revenue per month, 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 |
|---|---|
| Matters opened per month | 28 |
| Average value | $2,600 |
| Gross margin on this work | 58% |
| Share of total revenue | 40% |
What comes out
| Result | Value |
|---|---|
| Matter revenue per month main result | $72,800 |
| Per year | $873,600 |
| Gross profit per year | $506,688 |
| Implied total business revenue | $2,184,000 |
The repair line brings in $873,600 a year and earns $506,688 of gross profit on it.
How sensitive the answer is
Holding everything else steady and changing only average value, this is what happens to matter revenue per month. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average value ($) | Matter revenue per month |
|---|---|
| $1,300 | $36,400 |
| $1,950 | $54,600 |
| $2,600 example above | $72,800 |
| $3,900 | $109,200 |
| $5,200 | $145,600 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Matters opened per month
- A number, between 0 and 10000, starting at 28.
- Average value ($)
- A money amount, starting at $2,600.
- Gross margin on this work (%)
- A percentage, between 0 and 95, starting at 58%.
- Share of total revenue (%)
- Used to show what the whole business turns over.
What the results tell you
| Result | What it is |
|---|---|
| Matter revenue per month | The headline result. A money figure. |
| Per year | A money figure. |
| Gross profit per year | A money figure. |
| Implied total business revenue | 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.