Jurisdiction(s):
United Kingdom

Worked example: analysing and modelling law firm fee income, fee-earning capacity and fees per fee earner using FTEs, chargeable hours, hourly rates and realisation rates

Precedents
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It serves little purpose to gather information on a firm’s financial results if that information is not applied to enhance performance. Insight without action delivers no lasting gains. Fee income, fee‑earning capacity, and fees per fee earner are pivotal measures of a practice’s current financial health.

This Precedent offers a worked example that explains how to evaluate these metrics and run a modelling exercise to gauge the potential financial effect if any existing variable figures shift.

To complete the analysis and modelling, follow a three‑step approach:

  • step 1—compute key variables
  • step 2—calculate and review the firm’s current fee income, fee‑earning capacity and fees per fee earner
  • step 3—conduct a modelling exercise to understand the potential financial impact of altering any of the variables

This Precedent shows you how to carry out steps 2 and 3 in practice.

A blank version of the Precedent is available for use—see: Analysing fee income, fee‑earning capacity and fees per fee earner—blank. Please click to access an Excel version of this Precedent...

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Web page updated on 22/05/2026

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