Legal billing starts with documented time, agreed rates, and write-down decisions. Everhour keeps that time organized by matter and task.
Track billable vs. non-billable time and see your real utilization rate and revenue potential in seconds.
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This calculation answers how much client-chargeable legal work is worth before payment is collected. For lawyers, the starting point is not every hour worked. It is the time that qualifies as billable under the engagement, after excluding internal administration, business development, training, and any task the firm treats as non-billable for that matter.
The result should show the billable fee in U.S. dollars, the hours used, the rate applied, and any write-down before invoicing. For new U.S. client-lawyer relationships, ABA Model Rule 1.5 requires the scope of representation and the basis or rate of fees and expenses to be communicated in writing, subject to the rule's limited low-cost exception.
For legal work, the fee calculation should follow the written engagement terms before any internal preference. If the agreement sets a partner rate, associate rate, paralegal rate, flat fee, cap, or billing increment, use that instruction. A clean calculation also separates time entries by role because combining all hours first and multiplying by one blended rate changes the answer.
A common mistake is treating captured time as billed time. Captured time is the raw record. Billable time is the portion allowed by the matter rules. Billed time is the amount actually placed on the invoice after write-downs. If a partner removes 2 associate hours for efficiency or client courtesy, those hours remain useful for utilization analysis but should not be charged.
The basic formula is billable amount = billable hours × billing rate, applied separately for each rate category. If time is rounded, round each entry according to the firm's billing increment before totaling. A 0.1-hour increment equals 6 minutes; a 0.25-hour increment equals 15 minutes. Use the engagement terms or firm policy consistently.
For example, a matter has 14 partner hours at $375 per hour, 19 associate hours at $240 per hour, and 6 paralegal hours at $125 per hour. The partner removes 2 associate hours before invoicing, so the associate line bills 17 hours. The pre-tax fee is $5,250 + $4,080 + $750 = $10,080.
The United States has no federal VAT/GST or single national sales-tax rate for billed professional time. U.S. tax treatment is state and local, so add a jurisdiction-specific tax input only when the service is taxable. Hawaii uses general excise tax for business activities, New Mexico gross receipts tax includes services, and Texas taxes taxable services at state and local rates.
Payment timing is a separate question from fee value. Federal-agency vendor invoices have clearer federal timing: Prompt Payment rules generally use the contract date, accepted discount terms, an accelerated-payment rule, or 30 calendar days after receipt of a proper invoice. That does not create a general private-client payment deadline for every legal invoice.
A one-off calculator is enough when you need to check a draft invoice, estimate a matter fee, or explain how rates and write-downs change the total. It works best when the time entries are already approved, the billing increment is known, and the tax input has been confirmed for the jurisdiction and service.
A managed workflow is better when lawyers, paralegals, and admins enter time throughout the week. Everhour Time Tracking captures task and project hours through timers or manual entries, works inside common project tools, and feeds timesheets, reporting, budgeting, invoicing, and payroll review, with approvals, locked periods, reminders, and timer rules for cleaner records.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Billable time is matter work that the engagement terms, firm policy, and client billing rules allow to be charged. Drafting, research, client calls, negotiations, and court preparation often qualify. Internal administration, training, marketing, and correcting avoidable errors are commonly excluded or written down before invoicing.
Group the approved billable time by rate category first, then multiply each group by its own rate. Add the line totals after that. Do not combine partner, associate, and paralegal hours into one total unless the written engagement uses one blended rate for all covered work.
Billing increments convert recorded minutes into chargeable units. With a 0.1-hour increment, 6 minutes is one unit. With a 0.25-hour increment, 15 minutes is one unit. Apply the increment at the time-entry level when that is the firm's rule, because rounding only the final total can produce a different invoice amount.
Billable hours are hours eligible to be charged under the matter rules. Billed hours are the hours actually placed on the invoice after write-downs, courtesy reductions, caps, or client-specific exclusions. The difference matters because utilization can look strong while realization drops after partner review.
There is no federal VAT/GST or national sales-tax rate for U.S. billed professional time. Sales tax treatment is state and local, and some services are taxable while others are not. Use a jurisdiction-specific tax input only when the legal service is taxable under the applicable state and local rules.
Everhour Time Tracking lets users record task and project hours with a live timer or manual entry, then route that time into timesheets, approvals, reports, budgets, invoices, and payroll review. Admins can lock completed periods, send reminders, configure timer behavior, and approve timesheets before billing.
Everhour supports billable and non-billable time through project billing status and task-level non-billable controls. Admins can build reports with billable time, non-billable time, billable amount, and cost columns, so matter review can separate client-chargeable work from internal work.
Track approved matter time with timers, manual entries, approvals, and locked periods. Everhour keeps legal billing records consistent before invoice review and billing handoff.
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