The break-even point is the revenue or unit volume where your total income equals total costs, no profit, no loss. Calculate it by dividing your total fixed costs by your gross profit margin (for revenue break-even) or by your contribution margin per unit (for unit break-even). Every small business owner should know this number before making any pricing, hiring, or expansion decision.
Break-Even Calculator for Law Firm
Pre-filled with real law firm industry benchmarks
Law firms carry a cost structure defined by talent, time, and trust. Attorney salaries, paralegal wages, and support staff typically consume 40 to 55% of revenue. After that, your biggest fixed costs are office space (clients still expect a professional office in many practice areas), malpractice insurance ($3,000 to $15,000/year depending on practice area and firm size), bar dues and continuing legal education, legal research tools (Westlaw, LexisNexis), and case management software. Your break-even calculation centers on billable hours: how many hours must be billed and collected each month to cover all overhead. The critical distinction is between hours billed and hours collected, as most firms have a realization rate of 85 to 92%, meaning 8 to 15% of billed time is written off or never collected. This calculator helps you figure out the real number of billable hours your firm needs to survive and what rate those hours must be billed at.
Break-Even Calculator
Pre-filled with law firm industry defaults. Edit any field to use your real numbers.
Break-Even Units
56
Break-Even Revenue
$37,352
Contribution Margin
95.1%
Law Firm industry average margin: 95.0% gross margin with 5.0% COGS.