How do law firms measure profitability and utilisation?

Law firms measure profitability and utilisation by tracking billable hours, realisation, write-downs and lock-up by matter, client and fee-earner — ideally in real time. Corvana connects practice and accounting systems to show these live for Australian firms and benchmarks margins against official industry data, so partners can act on under-performing matters during the month.

Key facts

The four levers of a profitable practice

Law-firm profit is driven by four things: utilisation (how much of a fee-earner’s available time is billable), realisation (how much of that billed time is actually collected), leverage (the ratio of fee-earners to partners) and lock-up (cash tied up in unbilled WIP and unpaid debtors). Move any one of these and profit moves with it. The problem is that most firms only see these numbers weeks after month-end, in a spreadsheet that each office builds slightly differently — by which point a loss-making matter has already run over budget.

Why month-end spreadsheets cost you money

A matter that quietly slips from profitable to loss-making rarely announces itself. By the time a partner sees it in a month-end pack, the scope has expanded, the write-down is baked in, and the client conversation is harder. Manual reporting is also inconsistent — two offices define “utilisation” differently, so the firm can never compare like for like. Corvana fixes both problems: one agreed definition of every metric, calculated the same way for every team, refreshed continuously.

How Corvana measures it live

Corvana connects your accounting and billing data and turns it into live profitability, utilisation, realisation and lock-up — broken down by matter, client, practice group and individual fee-earner. Instead of a static report, partners get a dashboard they can drill into: from firm-wide margin down to a single matter’s WIP, write-downs and days-to-bill. Because the modules only surface once the relevant data source is connected, what you see is always your real numbers — never placeholder figures.

Benchmarked against the Australian legal industry

A 34% margin only means something in context. Corvana benchmarks your firm’s profitability, salaries-to-revenue and other ratios against official Australian industry data, so you know whether you’re ahead of or behind comparable practices — not just ahead of last month. That context turns a number into a decision: which practice groups to invest in, where rates are out of step, and which teams are carrying the firm.

From insight to action

Corvana’s AI assistant, Cory, watches the metrics for you and flags matters heading for a write-down, fee-earners whose utilisation has dropped, and lock-up that is creeping up before it becomes a cash problem. Alerts and role-based views mean partners see the whole firm, practice managers see their group, and fee-earners see their own utilisation — all from a single source of truth, so the monthly partners’ meeting starts from agreed facts instead of duelling spreadsheets.

Frequently asked questions

Can we report profitability by matter?

Yes. Corvana breaks profitability down by matter, client, team and fee-earner, with lock-up and write-down tracking.

Does it work for multi-office firms?

Yes — multi-office and multi-entity consolidation is built in, with drill-down from firm to individual matter.

What data does Corvana need to calculate utilisation and lock-up?

Corvana works from your accounting and billing data. Once that source is connected, utilisation, realisation, WIP and debtor figures populate automatically — no manual re-keying.

Can fee-earners see only their own numbers?

Yes. Role-based views give partners the whole firm, practice managers their group, and each fee-earner only their own utilisation and matters.

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