You’ve probably heard of the “Rule of a Third” as a general rule of thumb when it comes to law firm profitability. If not, here’s generally what the rule of a third is:
Revenue Generated By Each Timekeeper is divided three ways.
1/3 covers their direct overhead, 1/3 goes towards the firm’s general overhead, and 1/3 is firm profits.
Oh, if only it were that easy!
In this video, Ann Pearson gives you the basics for calculating it and another use of the Rule of a Third when you’re looking at hiring someone and wondering what you can afford to pay them.
Other Billable Hour Resources
6 Billable Hour Mistakes
In this video for law firm managers, Ann Pearson discusses the six common mistakes that law firms typically make that could be costing the firm money and what you can do to fix them.
Quick Tip For Drafting Better Time Entries
In this video, Ann Pearson gives you a quick tip that will make it easier to draft billable time entries that show the value of the work you did.
Are you a law firm manager or managing partner?
If you want to increase billable hours and revenue without piling extra work on your timekeepers, consider adding the Billable Hour Boot Camp to your firm’s onboarding and training program.
The Billable Hour Boot Camp has helped hundreds of law firm timekeepers gain a better understanding (and a better mindset!) of billable hours and their role in the firm. Give them the tools to succeed, and in the process you will increase revenue and decrease stress.