Calculate the
Real ROI of AI at Your Firm
For every 10 hours your attorneys record, only 8 get billed.
The legal industry has a hidden revenue leak. Between pre-bill write-downs, silent write-offs (time never recorded), and the economics of hourly billing under AI pressure, firms are leaving significant money on the table every year.
At the same time, 71% of corporate clients now prefer alternative fee arrangements, and fixed-fee work has grown 34% since 2016. Firms that can deliver the same quality faster don't just save time — they fundamentally change their economics.
10–15%
of recorded billable time is written off during pre-bill review, before invoices ever reach clients
Thomson Reuters, 2023
$53K+
in "silent" write-offs per partner per year — time spent but never recorded due to uncertainty or inefficiency
ILTA Value Funnel, 2025
71%
of corporate clients prefer fixed or alternative fee arrangements over traditional hourly billing
Clio Legal Trends, 2024
THREE WAYS AI IMPACTS YOUR BOTTOM LINE
Our calculator measures ROI across three dimensions that actually matter to your firm.
Recover Written-Off Time
Partners write off hours for predictable reasons: getting up to speed on unfamiliar areas, correcting junior work, and time spent on legal research that feels unbillable. AI directly addresses each of these categories.
Example: A 25-attorney firm at $450/hr recovers ~$236K per partner per year in time that was previously written off or never recorded.
Increase Fixed-Fee Margins
When you quote a $15,000 flat fee for a matter and your team completes it in 20 hours instead of 30, your effective rate jumps from $500/hr to $750/hr — a 50% margin improvement on the same engagement.
Example: A firm doing 30% of work on fixed fees sees margin improvements of 15–25 points per matter, directly increasing profitability.
Win More Work
Faster turnaround isn't just operational — it's a business development advantage. Firms that deliver 30–40% faster can profitably offer fixed fees, attracting the 71% of clients who prefer them.
Example: Each attorney gains capacity for 15–25 additional matters per year, with faster turnaround helping win competitive pitches.
OUR METHODOLOGY
How we calculate each number
Written-Off Time Recovery
We model four categories of write-offs based on Thomson Reuters and ILTA research: pre-bill write-downs (10–15% of recorded time), silent write-offs (time worked but never recorded), getting-up-to-speed time, and research/correction time. We then apply a conservative recovery rate based on practice area.
Pre-bill recovery = attorneys × recorded_hours × write_down_rate × recovery_rate × billing_rate
Silent write-off recovery = attorneys × silent_hours_per_week × 48 weeks × recovery_rate × billing_rate
Total = pre-bill + silent + research_correction_recovery
Fixed-Fee Margin Improvement
For the percentage of work billed at fixed fees, we calculate how reducing time-to-completion by 30–40% (based on August practice area benchmarks) changes the effective hourly rate and profit margin. We assume no change to the quoted price — only the cost of delivery decreases.
Original effective rate = fixed_fee ÷ original_hours
New effective rate = fixed_fee ÷ (original_hours × (1 − time_saved%))
Margin gain = (new_rate − original_rate) × reduced_hours × matters_per_year
Competitive Capacity Gains
Using practice-area-specific time savings from August's platform (2–7 hours per matter depending on practice area), we calculate how many additional matters each attorney can handle annually. This represents new revenue capacity without additional headcount.
Hours_freed = attorneys × hours_saved_per_matter × matters_per_year
Additional_matters = hours_freed ÷ avg_hours_per_matter
Turnaround_improvement = time_saved% × 100
Assumptions & Conservatism
We deliberately use conservative estimates throughout. Recovery rates are capped at 40–50% (not 100%). Time savings are based on median, not best-case, outcomes. We assume 1,800 billable hours per attorney per year and 48 working weeks. All figures can be adjusted using the calculator inputs.
Default assumptions:
• Billable target: 1,800 hrs/yr
• Working weeks: 48
• Write-down rate: 10–15% of recorded
• Silent write-off: ~1.6 hrs/week/partner
• AI time reduction: 25–40% by practice area
• Recovery rate: 40–50% (conservative)
SOURCES & REFERENCES
1. Thomson Reuters — "Law Firm Billing: Understanding and Curing Write-Downs" (2023). Analysis of billing efficiency across 1,200+ firms showing 10–15% pre-bill write-down rates.
2. ILTA (International Legal Technology Association) — "Life of a Billable Hour: Understanding the Law Firm Value Funnel" (2025). Research on silent write-offs, showing partners lose ~76 hours/year in unrecorded time.
3. Clio — Legal Trends Report (2024). Finding that 71% of clients prefer alternative fee arrangements and fixed-fee adoption has grown 34% since 2016.
4. Thomson Reuters — 2026 AI in Professional Services Report. Data on AI adoption rates and firm-level efficiency improvements.
5. August Platform Data — Aggregated, anonymized time-savings metrics from firms using August across Corporate & M&A (6 hrs), Litigation (4 hrs), Disputes (7 hrs), Real Estate (3 hrs), Capital Markets (2 hrs), Regulatory/ESG (2 hrs), and Healthcare (5 hrs) per matter.