LegalBillingTools

Hourly Billing Calculator

Convert a billing habit into annual revenue, and follow it through realization and collection to the cash that actually arrives.

Last reviewed

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Free · No sign-up · Runs in your browser

Hourly billing produces two numbers that are routinely confused: what was billed, and what was paid. On a normal year they differ by fifteen to twenty percent, and only one of them funds the practice.

This calculator follows the money from a daily billing habit through to collected cash, and reports the effective rate each recorded hour is genuinely worth.

Your numbers

Results update as you type. Nothing is sent anywhere.

Result

Cash collected

$411,574

Effective rate per hour

$281.42

Annual billable hours
1,462.5
Monthly hours
121.9
Value recorded
$497,250
Value invoiced
$442,553
Lost to write-downs and non-payment
$85,676
Overall yield
82.77%

This tool performs arithmetic on the values you enter. It does not provide legal advice and does not create an attorney-client relationship.

Recorded time is not revenue. Write-downs before invoicing (realization) and unpaid invoices (collection) both reduce it, and the effective rate is what remains per hour recorded.

A one point improvement in collection is usually easier to win than a rate increase of the same value.

From recorded time to cash

StageValueShare of recorded
Time recorded$497,250100%
Invoiced after write-downs$442,55389%
Cash collected$411,57482.77%

How to use the hourly billing calculator

  1. Enter the billable hours you record in a normal day.
  2. Enter days per week and working weeks per year, excluding leave.
  3. Enter the rate you bill at.
  4. Apply your real realization and collection rates, then read the collected value.

What people use this for

  • Understanding the gap between billed and collected revenue.
  • Quantifying what a billing discipline improvement is worth.
  • Setting a personal revenue target that accounts for leakage.
  • Comparing an hourly practice against a fixed-fee one on cash rather than on time.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A steady year

6.5 hours a day, 5 days, 45 weeks, at $340, with 89% realization and 93% collection.

Cash collected
$411,574
Effective rate per hour
$281.42
Annual billable hours
1,462.5

The same year with better billing discipline

Identical hours with realization at 95% and collection at 98%.

Cash collected
$462,940
Effective rate per hour
$316.54
Lost to write-downs and non-payment
$34,310

Two failures, two fixes

Realization measures what happens before the invoice: write-downs for over-servicing, work the client would not accept, time a supervisor removed. The fix is scoping and supervision.

Collection measures what happens after: invoices unpaid, paid late, or written off. The fix is billing promptly, following up early, and having the money conversation before it becomes awkward rather than after.

Compare the levers honestly

A five percent rate increase and a five-point collection improvement produce roughly the same revenue. One requires every client to agree; the other requires the firm to invoice on time and follow up.

Firms consistently reach for the rate increase first, because it feels like a business decision rather than an administrative one. On the arithmetic it is usually the harder route to the same result.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

  • Annual hours = hours per day × days per week × weeks per year.
  • Recorded value = hours × rate; realization then collection are applied in sequence.
  • The effective rate divides collected value by hours recorded.
  • The tool performs arithmetic or date counting on the values you enter. It does not interpret a rule, a statute or a contract.
  • Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This website provides general informational and productivity tools and does not provide legal advice or create an attorney-client relationship.

The date and deadline tools count days exactly as you instruct them. They do not interpret court rules, statutes of limitation, filing requirements or any other legal authority, and they do not know the rules of your jurisdiction.

Always verify any date, fee, or calculation against the governing rule, the court calendar and your own professional judgement. If you need legal advice, consult a lawyer licensed in your jurisdiction.

Frequently asked questions

Where do I find my realization rate?

Compare the value of time recorded at standard rates against the value actually invoiced, across a full year. Most practice management systems report it directly.

Is a low collection rate always a client problem?

Rarely. Late invoicing, unclear narratives and no follow-up process account for most of it, and all three are within the firm’s control.

Should I include write-offs of old debt?

Yes, in the collection rate. Excluding them produces a figure that looks better and describes less.

Does this work for a whole firm?

Yes. Enter firm-wide averages instead of individual figures; the interpretation is unchanged.

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