Law Firm Key Performance Indicators (KPIs)
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Clio’s law firm key performance indicators (KPIs) provide benchmark insights into how law practices are performing over time, giving firms insight into how to measure and improve their performance. They include:
Utilization rate
the percentage of an eight-hour day that gets put towards billable work.
Realization rate
the percentage of billable work that gets invoiced to clients.
Collection rate
the percentage of invoiced work that gets paid.
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Law Firm Utilization Rates
in 2024
The average utilization rate for law firms in 2024 is 37%. This means that, in an average 8-hour work day, lawyers are capturing 2.9 billable hours.
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Law Firm Realization Rates
in 2024
The average realization rate for law firms in 2024 is 88%. This means that, in an average 8-hour work day, lawyers are invoicing 2.6 hours’ worth of billable work to clients.
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Law Firm Collection Rates
in 2024
The average collection rate for law firms in 2024 is 91%. This means that, in an average 8-hour work day, lawyers are collecting 2.3 hours’ worth of invoiced work from clients.
Lockup
“Lockup” is a term used in accounting to assess cash flow in businesses. For law firms, it shows how much revenue—measured in days of work—is unbilled and uncollected at any given time.
Lockup provides an indication of cash flow. Decreases in lockup mean firms have more annual revenue on hand to better cover expenses or fund expansion. However, increases in lockup trap revenue in unbilled or uncollected states, leaving firms vulnerable to liquidity problems and stalled growth.
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Lockup consists of three measures within the billing process and is measured in days:
Realization Lockup
= (work in progress ÷ previous fiscal year’s collections) × 365 days
This is the amount of revenue that is unbilled at any given time (also known as “work-in-progress lockup”).
Collection Lockup
= (accounts receivable ÷ previous fiscal year’s collections) × 365 days
This is the amount of revenue that is uncollected at any given time (also known as “debtor lockup”).
Total Lockup
= realization lockup + collection lockup
This is a combination of revenue held in both realization and collection lockup.
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Realization Lockup Rates
in 2024
The median amount of realization lockup that firms carry is 47 days. For comparison, the top 25% of law firms have realization lockup of 25 or fewer days and the bottom 25% have more than 101 days worth of their annual revenue in an unbilled state.
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Collection Lockup Rates
in 2024
The median amount of collection lockup that firms carry is 27 days. For comparison, the top 25% of law firms have collection lockup of 8 or fewer days and the bottom 25% have more than 74 days worth of their annual revenue in their accounts receivable.
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Total Lockup Rates
in 2024
The median amount of total lockup that firms carry is 92 days. For comparison, the top 25% of law firms have total lockup of 49 or fewer days and the bottom 25% have more than 189 days worth of their annual revenue in either an unbilled or unpaid state at any given time.
Law Firm Key Performance Indicators (KPIs) by Firm Size
Although no firm size is inherently superior, there is no denying that the varying structures and compositions of firms inevitably create different challenges for those within them. Below, we explore law firm key performance indicators by firm size to provide tailored guidance on measuring and improving performance.
Firm size is categorized as follows: 1 full-time employee; 2 to 4 full-time employees; 5 to 19 full-time employees; and 20 or more full-time employees.
Law Firm Utilization Rates by Firm Size
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1 full-time employee
26%
The average utilization rate for firms with 1 full-time employee in 2025 is 26%.
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2 to 4 full-time employees
31%
The average utilization rate for firms with 2 to 4 full-time employees in 2025 is 31%.
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5 to 19 full-time employees
37%
The average utilization rate for firms with 5 to 19 full-time employees in 2025 is 37%.
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20 or more full-time employees
45%
The average utilization rate for firms with 20 or more full-time employees in 2025 is 45%.
Law Firm Realization Rates by Firm Size
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1 full-time employee
86%
The average realization rate for firms with 1 full-time employee in 2025 is 86%.
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2 to 4 full-time employees
87%
The average realization rate for firms with 2 to 4 full-time employees in 2025 is 87%.
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5 to 19 full-time employees
88%
The average realization rate for firms with 5 to 19 full-time employees in 2025 is 88%.
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20 or more full-time employees
84%
The average realization rate for firms with 20 or more full-time employees in 2025 is 84%.
Law Firm Collection Rates by Firm Size
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1 full-time employee
90%
The average collection rate for firms with 1 full-time employee in 2025 is 90%.
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2 to 4 full-time employees
90%
The average collection rate for firms with 2 to 4 full-time employees in 2025 is 90%.
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5 to 19 full-time employees
95%
The average collection rate for firms with 5 to 19 full-time employees in 2025 is 95%.
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20 or more full-time employees
96%
The average collection rate for firms with 20 or more full-time employees in 2025 is 96%.
Realization Lockup Rates by Firm Size
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1 full-time employee
46 days
The median amount of realization lockup that firms with 1 full-time employee carry is 46 days.
For comparison, the top 25% of these firms have realization lockup of 23 or fewer days and the bottom 25% have more than 106 days worth of their annual revenue in an unbilled state at any given time.
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2 to 4 full-time employees
48 days
The median amount of realization lockup that firms with 2 to 4 full-time employees carry is 48 days.
For comparison, the top 25% of these firms have realization lockup of 24 or fewer days and the bottom 25% have more than 112 days worth of their annual revenue in an unbilled state at any given time.
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5 to 19 full-time employees
45 days
The median amount of realization lockup that firms with 5 to 19 full-time employees carry is 45 days.
For comparison, the top 25% of these firms have realization lockup of 25 or fewer days and the bottom 25% have more than 92 days worth of their annual revenue in an unbilled state at any given time.
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20 or more full-time employees
45 days
The median amount of realization lockup that firms with 20 or more full-time employees carry is 45 days.
For comparison, the top 25% of these firms have realization lockup of 24 or fewer days and the bottom 25% have more than 92 days worth of their annual revenue in an unbilled state at any given time.
Collection Lockup Rates by Firm Size
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1 full-time employee
20 days
The median amount of collection lockup that firms with 1 full-time employee carry is 20 days.
For comparison, the top 25% of these firms have realization lockup of 3 or fewer days and the bottom 25% have more than 73 days worth of their annual revenue in an uncollected state at any given time.
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2 to 4 full-time employees
30 days
The median amount of collection lockup that firms with 2 to 4 full-time employees carry is 30 days.
For comparison, the top 25% of these firms have realization lockup of 8 or fewer days and the bottom 25% have more than 85 days worth of their annual revenue in an uncollected state at any given time.
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5 to 19 full-time employees
27 days
The median amount of collection lockup that firms with 5 to 19 full-time employees carry is 27 days.
For comparison, the top 25% of these firms have realization lockup of 9 or fewer days and the bottom 25% have more than 65 days worth of their annual revenue in an uncollected state at any given time.
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20 or more full-time employees
22 days
The median amount of collection lockup that firms with 20 or more full-time employees carry is 22 days.
For comparison, the top 25% of these firms have realization lockup of 8 or fewer days and the bottom 25% have more than 51 days worth of their annual revenue in an uncollected state at any given time.
Total Lockup Rates by Firm Size
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1 full-time employee
87 days
The median amount of total lockup that firms with 1 full-time employee carry is 87 days.
For comparison, the top 25% of these firms have total lockup of 41 or fewer days and the bottom 25% have more than 196 days worth of their annual revenue in an unbilled or uncollected state at any given time.
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2 to 4 full-time employees
98 days
The median amount of total lockup that firms with 2 to 4 full-time employees carry is 98 days.
For comparison, the top 25% of these firms have total lockup of 48 or fewer days and the bottom 25% have more than 214 days worth of their annual revenue in an unbilled or uncollected state at any given time.
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5 to 19 full-time employees
87 days
The median amount of total lockup that firms with 5 to 19 full-time employees carry is 87 days.
For comparison, the top 25% of these firms have total lockup of 51 or fewer days and the bottom 25% have more than 167 days worth of their annual revenue in an unbilled or uncollected state at any given time.
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20 or more full-time employees
83 days
The median amount of total lockup that firms with 20 or more full-time employees carry is 83 days.
For comparison, the top 25% of these firms have total lockup of 48 or fewer days and the bottom 25% have more than 161 days worth of their annual revenue in an unbilled or uncollected state at any given time.