![]() ![]() Fee revenue: $9,242,500 (94% inventory turn - fee billing into fee revenue.Fee billing: $9,832,500 (95% inventory turn - billable time value into fee billing). ![]() ![]() Assuming a continuation of those historic trends, absent other factors, the law firm’s revenue budget adopted the following revenue goals: Similarly, the firm collected (i.e., fee revenue) equal to 91.5%, 94.0% and 91.2% of the aggregate annual fee billing. Over the last three years, this firm invoiced clients (i.e., fee billings for the year) an amount equal to 95.6%, 95.4%and 95.1% of its billable time value recorded during the year. Assume a typical growing transactional/commercial litigation firm with the annual statistics shown in Columns C, D, and E. FEE BILLING & FEE REVENUE PROJECTIONSĪmong the year-to-year statistics I track for my law firm clients are the relative mathematical relationship between their actual billable time value for prior years and each respective year’s fee billing total, as well as the relationship between total fee billing and total fee revenue for the year. The Reasonable Projection and R.P +6% columns are then multiplied by the applicable projected hourly rate for each timekeeper to yield two potential billable time value projections. I generally present two alternative columns for the coming year’s annualized billable hours projections - one labeled “Reasonable Projection” and the other representing a “Reasonable Projection plus a 6% increase (“R.P.+6%”) - which represent an additional two billable hours per week for a lawyer working 1,800 billable hours annually. This process involves a spreadsheet consisting of columns detailing annualized billable hours of the prior year and projecting billable hours of the coming year, and the effective hourly rate for those hours for last year’s timekeepers and continuing timekeepers and those expected to be added during the year. THE BILLABLE HOURS & BILLABLE TIME VALUE PROJECTIONS. ![]() I typically break this process into three phases - estimating the billable hours and billable time value projections, then the fee billing and fee revenue projections.
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