Calculators
Legal Billing Rate Calculator
Calculate the hourly billing rate a law firm needs per lawyer from compensation, overhead, billable hours, realisation and profit.
- Runs in your browser
- Nothing uploaded
The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Setting lawyer billing rates
- Law firm budgeting
- Evaluating a new hire
- Comparing hourly and fixed-fee pricing
About this tool
What the Legal Billing Rate Calculator does
A law firm’s rate must cover the lawyer’s compensation and benefits, a share of firm overhead and a profit margin, spread over the hours actually collected. Realisation, the share of billed time that is paid, means the standard rate must be higher than the simple calculation suggests.
Formula
- Cost = compensation × (1 + benefits) + overhead
- Revenue = cost ÷ (1 − margin)
- Rate = revenue ÷ (billable hours × realisation)
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Lawyer compensation | $150,000 |
| Benefits and payroll taxes | 25% |
| Overhead allocated per lawyer | $90,000 |
| Billable hours target | 1,800 |
| Realisation (billed and collected) | 88% |
| Target profit margin | 30% |
| Result | Value |
|---|---|
| Standard hourly rate needed | $250 |
| Break-even rate | $175 |
| Revenue needed per lawyer | $396,429 |
| Cost per lawyer | $277,500 |
| Hours actually collected | 1,584 |
How to read the result
A traditional rule of thumb (the “rule of thirds”) splits revenue into compensation, overhead and profit; this calculator lets you test any split.
Raising realisation through clear engagement terms and prompt invoicing can be worth as much as a rate increase.
General information only, not legal advice. Laws and court practice vary by jurisdiction; consult a qualified lawyer.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
From the cost of each lawyer plus overhead and profit, checked against the market for similar firms.
The percentage of standard-rate time that is billed and collected.
A guideline that a lawyer's revenue should cover their pay, their share of overhead and firm profit in roughly equal parts.
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