Key Takeaways:
- Most law firms target 142-192 billable hours per month (1,700-2,300 annually), with 158 hours (1,900 annually) being the sweet spot for mid-sized firms
- The math is sobering: With lawyers billing only 2.9 hours of an 8-hour workday on average, achieving monthly targets requires strategic time management and the right technology
- Monthly tracking beats annual goals: Breaking down annual requirements into monthly targets makes billable hours manageable and provides early warning signs when you’re falling behind
If you’re managing a mid-sized law firm, you’ve probably stared at your annual billable hours target and wondered: “What does this actually mean month by month?” You’re not alone. While big law firms chase 2,000+ annual hours and solo practitioners might aim for 1,500, mid-sized firms face unique challenges in setting realistic monthly billable hour targets that balance profitability with sustainability.
Here’s the reality check: lawyers spend just 2.9 hours each workday on billable work, according to the latest industry data. That means out of an 8-hour day, you’re losing over 5 hours to administrative tasks, business development, and other non-billable activities.
Let’s dive into what monthly billable hours really look like for mid-sized law firms and, more importantly, how to actually hit those targets without burning out your team.
The Monthly Billable Hours Breakdown: What’s Actually Realistic?
The Industry Standard
Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year. But what does that mean for your monthly planning?
Let’s do the math:
- 1,700 annual hours = 142 hours per month
- 1,900 annual hours = 158 hours per month
- 2,100 annual hours = 175 hours per month
- 2,300 annual hours = 192 hours per month
For mid-sized firms, 1,900 billable hours a year is about 158 billable hours a month. This has become the unofficial benchmark for firms that want to maintain profitability without pushing their attorneys to the breaking point.
The Reality Behind the Numbers
Here’s where it gets interesting. To bill 158 hours in a month, assuming 20 working days, you need to bill 7.9 hours per day. But remember that utilization rate of 37% we mentioned? That means to get 7.9 billable hours, your attorneys might be working 10-12 hour days.
To achieve 1,800 billable hours, an associate would work “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. Scale that up to 1,900 hours, and you’re looking at consistent overtime or weekend work.
Breaking Down Monthly Targets by Firm Size and Practice Area
Big Law vs. Mid-Sized Realities
While firms with more than 700 attorneys require an average of 1,930 hours annually (161 monthly), mid-sized firms have more flexibility. Here’s what we’re seeing:
Mid-Sized Firm Sweet Spots:
- General Practice: 150-165 hours/month
- Litigation-Heavy: 160-175 hours/month
- Corporate/Transactional: 155-170 hours/month
- Family Law/Estate Planning: 140-155 hours/month
Geographic Variations
Location matters. In Philadelphia, Orange County, CA, San Diego, and the San Jose area, most offices required either 1,900 or 1,950 hours, while 60% of offices in Hartford and Nashville set their billable hours requirement at 1,800 hours per year.
The Hidden Math: From Billable to Collectible
Here’s what keeps law firm owners up at night: billable hours don’t equal collected revenue. Let’s look at the financial funnel:
- Hours Worked: Total time your attorneys are at work
- Billable Hours: Time that can be charged to clients (37% of hours worked)
- Billed Hours: What actually makes it to invoices (88% realization rate)
- Collected Revenue: What you actually get paid (91% collection rate)
This means for every 100 hours your attorney works:
- 37 become billable
- 33 get billed to clients
- 30 result in collected revenue
Sobering, isn’t it?
Calculating Your Firm’s Ideal Monthly Target
Step 1: Start with Your Financial Goals
Work backwards from what you need to collect:
- Annual revenue goal ÷ Average hourly rate = Collected hours needed
- Collected hours ÷ Collection rate = Billed hours needed
- Billed hours ÷ Realization rate = Billable hours needed
- Billable hours ÷ 12 months = Monthly billable target
Step 2: Factor in Your Reality
Average billable hours per month do not include holidays, sick leaves or vacation days. When setting monthly targets, consider:
- January: Post-holiday slowdown
- July/August: Summer vacations
- November/December: Holiday interruptions
- Your practice area’s busy seasons
Step 3: Build in Buffers
You can plan on months when you have more capacity for billable hours so that in the lower capacity months, you’re not stressed about having a lower number. Smart firms set higher targets for their busy months to compensate for predictable slow periods.
Technology Solutions: How Modern Firms Hit Their Numbers
The Time Tracking Revolution
Remember those 5+ hours of non-billable time each day? Technology can claw back significant portions. Technology use has helped 30% of legal professionals finish tasks in less time, and firms using dashboards or other data visualization tools to have a great sense of how busy their people are consistently outperform their peers.
Real-Time Tracking Beats Memory
If you track your hours as you go, you’re less likely to lose out on hours that you forget about when tracking at the end of the day (or week, or even month). Modern legal billing software with timer features captures those 6-minute phone calls and quick email responses that add up to serious monthly totals.
The Integration Advantage
When your billing system integrates with your accounting software (like QuickBooks Online), you eliminate the time sink of double entry and reduce errors that lead to write-offs. Firms using cloud-based billing integrated with QuickBooks see invoices paid up to 70% faster.
Best Practices for Achieving Monthly Billable Hour Goals
1. Make Daily Tracking Non-Negotiable
Set a firm-wide policy: all time must be entered daily. No one wants to get caught two weeks later trying to remember what he was doing two weeks in the past.
2. Implement the Right Billing Increments
Most lawyers bill in standard increments, with 1/10 of an hour (six minutes) as a common increment. This standardization:
- Makes calculations easier
- Ensures consistency across the firm
- Reduces client disputes
- Speeds up invoice preparation
3. Focus on Realization Rates
firms that included an itemized outstanding balances summary on invoices, with an embedded payment link, to follow up about unpaid bills had 26% higher realization rates. Small improvements in how you present and follow up on bills can dramatically impact your monthly collections.
4. Leverage Alternative Fee Arrangements Strategically
While billable hours remain king, Solo firms implementing payment plans see 71% more monthly revenue than those without. For small firms, the increase is 32%. Consider how flat fees or payment plans might actually increase your effective hourly rate for routine matters.
5. Monitor Monthly, Adjust Quarterly
Take the total number of required hours per year and divide it by twelve. The result is an associate’s monthly goal. But don’t stop there:
- Review individual performance monthly
- Analyze firm-wide trends quarterly
- Adjust targets based on actual realization and collection rates
- Provide support to attorneys falling behind early, not at year-end
Common Pitfalls and How to Avoid Them
The February Trap
With only 20 working days (versus 23 in months like March or May), February requires higher daily averages. Plan accordingly.
The Summer Slide
If some months an attorney works 300 hours, Sanford says, balancing that out with a more relaxed schedule during less busy periods should in theory help balance their average hours to 160 or so a month. Front-load your year to accommodate summer slowdowns.
The Write-Off Spiral
Poor time descriptions lead to client challenges and write-offs. Use detailed but succinct descriptions to ensure clear, transparent billing.
The Utilization Illusion
Working more hours doesn’t always mean more billable hours. Focus on increasing the percentage of billable work, not just total hours at the office.
Action Steps: Implementing Your Monthly Billable Hours Strategy
Week 1: Assess Your Current State
- Calculate your firm’s current utilization, realization, and collection rates
- Identify your top performers and understand what they’re doing differently
- Review which practice areas or attorneys consistently miss targets
Week 2: Set Realistic Targets
- Use the calculation framework above to set monthly goals by attorney
- Factor in seniority levels (partners vs. associates vs. paralegals)
- Build in seasonal variations
Week 3: Implement Technology Solutions
- Deploy time tracking software if you haven’t already
- Set up automated reminder systems for daily time entry
- Create dashboards for real-time monitoring
Week 4: Establish Accountability Systems
- Institute weekly billable hours check-ins
- Create monthly performance reviews
- Celebrate wins and address shortfalls quickly
The Bottom Line: Sustainable Success
Setting and achieving monthly billable hour targets isn’t just about pushing your team harder—it’s about working smarter. With the average lawyer billing less than 3 hours per day, there’s enormous room for improvement through better systems, technology, and accountability.
For mid-sized law firms, targeting 150-165 billable hours per month strikes the right balance between profitability and sustainability. But remember: these are billable hours, not collected revenue. Your success depends on optimizing every step of the billing funnel, from time capture to collection.
The firms that thrive are those that treat billable hours not as a necessary evil, but as a key metric that, when properly managed, ensures both firm profitability and attorney satisfaction. Start with monthly targets, track religiously, adjust regularly, and invest in the technology that makes it all possible.
Because at the end of the day, every billable hour that slips through the cracks is revenue you’ll never recover. And in today’s competitive legal market, you can’t afford to leave money on the table.
FAQ: Monthly Billable Hours
Q: What’s the difference between billable hours and actual hours worked?
A: Billable hours are only the time you can charge to clients, while actual hours include all time at work. With the industry average utilization rate at 37%, attorneys typically work about 2.7 hours for every billable hour recorded. This includes time spent on administrative tasks, firm meetings, business development, and CLE requirements.
Q: How many billable hours per month is considered good for a mid-sized firm?
A: For mid-sized firms, 150-165 billable hours per month (1,800-1,980 annually) is considered a strong performance. This balances profitability with attorney well-being and typically requires 8-9 billable hours per working day, assuming 20 working days per month.
Q: Should monthly billable hour targets be the same year-round?
A: No. Smart firms adjust monthly targets based on predictable patterns. Set higher targets for typically busy months (March, April, September, October) to compensate for slower periods (August, December). This approach maintains annual targets while acknowledging real-world workflow variations.
Q: What’s the biggest mistake firms make with monthly billable hour targets?
A: Focusing solely on hours billed rather than hours collected. With average realization rates at 88% and collection rates at 91%, firms need to track the full revenue cycle. A firm billing 160 hours per attorney per month may only collect revenue on 128 hours.
Q: How can we increase billable hours without burning out our attorneys?
A: Focus on increasing utilization rate, not total hours worked. Use technology to automate non-billable tasks, delegate appropriately to paralegals and support staff, and implement efficient time-tracking systems. Firms using modern practice management software report saving 8+ hours per week on administrative tasks.
Ready to revolutionize your firm’s approach to billable hours? Discover how LeanLaw’s integration with QuickBooks Online can help you track, bill, and collect more efficiently. See how firms using LeanLaw achieve 70% faster payment cycles.