Utilization rate calculator

The utilization rate is the billable hours recorded divided by the hours available, multiplied by 100. A lawyer with 1,800 available hours who records 1,350 billable hours has a utilization rate of 75%. The remaining 450 hours went on non-billable work or on billable work that was done but never recorded, and the rate cannot tell those two apart.

The result depends heavily on what counts as available. Some firms use contract hours, which at 40 hours a week for 52 weeks come to 2,080, while others use the hours left after holidays and sickness. The same 1,350 billable hours are 65% of 2,080 but 75% of 1,800. Choose one definition and keep to it, because rates calculated on different bases cannot be compared between people or between years.

A good rate depends on what the role is for. A fee earner without management duties is expected to have a high rate, while a partner who supervises, runs the practice and brings in work will have a lower one. It is therefore more useful to set a target from the billable hours the firm needs than to aim at a general figure.

As a reference point, Clio's Legal Trends Report 2025 puts average utilization at 38%, which is about three billable hours in an eight-hour day. Set against 1,800 available hours, a billable target of 1,800 hours would require a utilization rate of 100%, which is why such targets assume longer days than the contract does. The billable hours calculator works out what a target asks of each working day.

Utilization measures how much time becomes billable work, and realization measures how much of that work reaches an invoice. Billing realization is the hours billed divided by the billable hours recorded or, when every hour carries the same standard rate, the value billed divided by the value of the work recorded. If 1,215 of 1,350 recorded hours are billed, realization is 90%, and at 300 an hour the 135 hours written off are worth 40,500.

Write-offs come from fee caps, fixed fees that ran over, discounts and entries that a client or a partner would not accept. Vague and block-billed entries are written down more often than specific ones, so the quality of the time record shows up directly in this rate. For comparison, Clio's Legal Trends Report 2025 gives an average realization rate of 88%.

The collection rate is the amount collected divided by the amount billed. If 364,500 is billed and 346,275 is collected, the collection rate is 95%, and the remaining 18,225 is either still owed or lost. Clio's average for 2025 is 93%. Some firms also track collection realization, the amount collected divided by the value of the work recorded, which covers both steps at once and comes to 85.5% in this example.

Lock-up measures how long the money takes to arrive rather than how much of it arrives. Work-in-progress days are the unbilled work divided by annual billings, multiplied by 365, and debtor days are the unpaid invoices divided by annual billings, multiplied by 365. Added together, they give the number of days between doing the work and being paid for it, which is the time the firm spends financing its clients' matters.

Multiplying the three rates gives the share of the standard value of available time that ends up as cash. In the example above, 75% × 90% × 95% is 64%. At 300 an hour, that is 192.38 collected for every available hour and 256.50 for every recorded billable hour, which is the effective hourly rate.

The first step is the hardest to read, because its loss mixes two kinds of time. Non-billable work is expected, but billable work that was done and never recorded is a real loss, and it never appears as a write-off or an unpaid invoice. Recording time as the work happens, or with Sixminute, which drafts entries from the work itself, makes that part of the loss visible.