Blog · Board and management reporting · Law firms
How a law firm measures whether matters are staffed as they were priced, from time entries and the engagement terms: the fee-earner mix a matter was priced on, the mix actually recorded, the cost of the difference at cost rates, the matters and clients where partners do associate work, the practices where the mix drifts most, and the identity that matter costs sum to the practice's cost base.
A firm prices a matter on a mix of partner, associate and paralegal hours, and delivers it with the partner doing most of the work because the associates were busy. The bill is the same; the cost is not. Time entries against the engagement terms show the drift per matter, and per practice it is a pattern. This guide sets out leverage priced against delivered, the cost of the difference, and the identity.
Per matter:
Priced mix = hours by grade from the budget Delivered mix = hours by grade from time entries Cost priced = Σ priced hours × cost rate by grade Cost delivered = Σ delivered hours × cost rate Mix drift = cost delivered − cost priced, holding total hours
Per client, per practice: the same, summed, and the share of matters with drift above a stated amount.
Client and fee-earner identifiers only.
Σ matters' cost delivered = practice cost base allocated to matters, within the stated allocation
Time entries with no matter are unallocated, counted, and excluded.
| Grade | Priced hours | Delivered hours | Cost rate | Priced cost | Delivered cost |
|---|---|---|---|---|---|
| Partner | 20 | 65 | $310 | $6,200 | $20,150 |
| Associate | 120 | 70 | $140 | $16,800 | $9,800 |
| Paralegal | 40 | 45 | $60 | $2,400 | $2,700 |
| Total | 180 | 180 | $25,400 | $32,650 |
Same hours, same bill, seven thousand dollars more cost, because the partner did forty-five hours of associate work.
| Practice | Matters | Share with drift over $5,000 | Total drift | Pattern |
|---|---|---|---|---|
| Corporate | 210 | 41% | $890,000 | Partners doing associate work |
| Employment | 340 | 12% | $110,000 | |
| Property | 180 | 28% | $260,000 | Associates doing paralegal work |
Corporate's partners delivered nearly a million dollars of associate-priced work at partner cost in a year. The associates were not short of work; the report per matter says which partners.
Profitability at charge-out rates. Measures what was billed, not what it cost.
No budget by grade. No priced mix; the proxy is a practice median, labelled.
Drift read without hours. The partner who did it in half the time is blamed.
Practice-level only. The pattern is three partners.
Mapped once, the engagement terms, the time entries and the cost rates produce the priced and delivered mix, the drift and the identity per matter, client and practice every quarter. Covirage builds this from the exports as they are. The law firms page describes the setup, and the realisation guide covers the billing-side leak from the same time entries.
The engagement's fee estimate or budget, by grade, where the firm records one. Where it does not, the practice's own median mix for matters of the type is the proxy, labelled, and the absence of a budget is the first finding.
The firm's cost per hour per grade, from salaries and overhead allocation, stated once a year. Not charge-out rates. Profitability at charge-out rates measures what was billed; at cost rates it measures what it cost to deliver, and the mix drift is a cost finding.
No. A partner who does the work in half the time at twice the cost has broken even; one who does it in the same time has given the difference away. The report shows hours as well as cost, and the partner sees both.