Law Firm Fee Realization and Rate Calculator

The short answer

A lawyer’s standard rate is not what the firm actually earns. Time is lost at three steps: hours that are never recorded (utilization), time that is written off or discounted before billing (billing realization), and invoices that are not fully paid (collection realization). Multiply the three and you get overall realization, the share of the value of your time that becomes cash. Your effective rate is what you actually collect for each hour. The tool shows where the leaks are and what rate or hours would reach your income goal.

Where to find the numbers

Number	Where it comes from
Available hours	Working hours in the year for one lawyer, or for the whole group (days worked × hours a day). Not the same as billable targets.
Hours recorded	Time entered in your practice management or time-keeping system. A time and billing report by timekeeper.
Hours billed, amount billed	The billing or WIP report: time that appeared on invoices and the dollar fees invoiced (before disbursements, GST and trust money).
Amount collected	Fee revenue actually received for the period, from the receipts report or the accounts receivable ledger.
Overhead	Annual operating costs of the practice for the same lawyer or group, from the income statement, excluding owner pay.

Number

Where it comes from

Available hours

Working hours in the year for one lawyer, or for the whole group (days worked × hours a day). Not the same as billable targets.

Hours recorded

Time entered in your practice management or time-keeping system. A time and billing report by timekeeper.

Hours billed, amount billed

The billing or WIP report: time that appeared on invoices and the dollar fees invoiced (before disbursements, GST and trust money).

Amount collected

Fee revenue actually received for the period, from the receipts report or the accounts receivable ledger.

Overhead

Annual operating costs of the practice for the same lawyer or group, from the income statement, excluding owner pay.

Leave out trust money, disbursements recovered at cost and GST. Use the same period (and the same group of lawyers) for every box.

If this happens, then that

If…	…then
Utilization is low	Time is being worked but not recorded, or there is not enough work. Record time as you go, and check whether the problem is capacity or discipline.
Billing realization is low	Many hours are written off or discounted. Review scoping and quoting, fixed fees, and who approves write-downs.
Collection realization is low	Invoices are slow or unpaid. Use retainers, bill more often, follow up sooner and review client intake.
Your effective rate is far below the standard rate	The standard rate is not what you earn. Set rates and quotes from the effective rate, not the rate card.
You raise the standard rate	It only helps if realization holds. Test the 70% to 100% realization table to see the rate you need.

If…

…then

Utilization is low

Time is being worked but not recorded, or there is not enough work. Record time as you go, and check whether the problem is capacity or discipline.

Billing realization is low

Many hours are written off or discounted. Review scoping and quoting, fixed fees, and who approves write-downs.

Collection realization is low

Invoices are slow or unpaid. Use retainers, bill more often, follow up sooner and review client intake.

Your effective rate is far below the standard rate

The standard rate is not what you earn. Set rates and quotes from the effective rate, not the rate card.

You raise the standard rate

It only helps if realization holds. Test the 70% to 100% realization table to see the rate you need.

Planning a longer view of the firm’s money? Use the Law Firm Planner. Trust money is not revenue; see the trust accounting guide.

More free tools for law firms

Trust Reconciliation Checker WIP and Receivables Days Associate Lawyer Profitability Law firm accounting Law Firm Planner

Your privacy. What you type stays in your browser. It is not sent to the firm, saved or shared, and it is gone when you close or leave the page. Do not type real client names if you prefer; initials or file numbers work just as well.

Information only. General estimates and checklists, in 2026 dollars, using simplified assumptions. Not accounting, tax, legal or professional-regulatory advice. Rules and rates change, so confirm them with your regulator, the CRA, the BC government or your accountant.

Example numbers are made up. They only show how the tool works. Replace them with your own.

Want advice for your own situation?

This free tool is a courtesy of HJ Wu & Company Inc. (CPA), a Vancouver CPA firm offering accounting, tax, financial reporting and review assurance. Feedback on the calculators is welcome.