Key Takeaways:
• Simple wills typically generate flat fees of $300-$1,500 with completion times of 2-4 hours, yielding effective hourly rates of $150-$500—but complex irrevocable trusts priced at $2,500-$7,000+ can deliver significantly higher profit margins when attorney time is properly tracked and analyzed.
• The most profitable estate planning practices aren’t necessarily doing the highest-volume work; they’re tracking matter-level profitability to identify which plan types deliver the best return on attorney time and firm resources.
• A good profit margin for law firms typically falls between 30-35%, but estate planning firms that carefully analyze profitability by plan type can achieve margins of 40% or higher on complex matters by optimizing their service mix and pricing strategy.
Here’s a question that keeps managing partners of estate planning firms awake at night: Are your simple wills subsidizing your complex trust work? Or is it the other way around?
Most estate planning attorneys have an intuition about which plan types are most profitable. But intuition can be deceiving. The partner who swears that irrevocable life insurance trusts are “the real money-makers” might be shocked to discover that their bread-and-butter simple wills—when properly priced and efficiently executed—actually generate higher profit margins per hour of attorney time.
The legal industry is facing a profitability crisis that most firms don’t even recognize. According to the Clio 2024 Legal Trends Report, lawyers bill just 2.9 hours of an 8-hour workday on average. Of that billed time, only 88% makes it to an invoice, and only 91% of invoiced work gets collected. Do the math: that’s an effective rate of 2.3 hours of collected revenue per 8-hour day—a mere 29% efficiency before you subtract any expenses.
For estate planning firms, these numbers mask an even more important question: Which specific plan types are driving your profitability, and which ones are quietly draining it?
This guide will show you exactly how to calculate profit margin per plan type, reveal the true cost structure of common estate planning matters, and help you make data-driven decisions about your firm’s service mix. Whether you’re running a boutique estate planning practice or managing the trusts and estates group at a mid-sized firm, understanding matter-level profitability will transform how you price, staff, and prioritize your work.
Why Firm-Level Profitability Numbers Lie
Before diving into the calculation methodology, let’s address a fundamental problem: most estate planning firms are measuring profitability wrong.
Your firm’s overall profit margin might look healthy at 32%. But that top-line number hides critical details that drive strategic decisions. Your 32% margin might come entirely from two plan types while a third loses money. One attorney might generate 70% of profits while others consume resources without proportional return.
Consider this scenario: A family law attorney we’ll call Sharon had been running her practice for six years. When asked which practice area contributed most to her bottom line, she confidently replied, “Divorce cases make up 80% of my practice, so that’s where we focus.”
But when her team actually ran the profit margins by matter type, she discovered something shocking: while divorce cases contributed 80% to her top line, they only accounted for 65% of her bottom-line profit. Even more revealing, her simplest divorce cases—uncontested with no property—had the lowest profit margins despite accounting for nearly half her divorce revenue.
The same principle applies to estate planning. That high-volume, high-revenue simple will practice might be dragging down your overall profitability if you haven’t examined the numbers carefully.
The True Cost Structure of Estate Planning Matters
To calculate profit margin per plan type, you first need to understand what each matter actually costs your firm. This goes far beyond the obvious attorney time.
Direct Costs: The Visible Expenses
Direct costs are the expenses that can be directly attributed to completing a specific matter. For estate planning, these typically include:
Attorney time: The hours spent by attorneys at their loaded cost rate (not billing rate—more on this distinction shortly)
Paralegal time: Support staff hours for document preparation, client communication, and administrative tasks
Filing fees: State filing fees, recording fees for deeds, and similar hard costs
Document costs: Binding, printing, and delivery expenses
Here’s an example calculation for a simple will matter: From the time the matter was created to completion, a firm might incur $671 in staff wages (reflecting only the time each staff member put into this specific case) and $250 in filing and other fees. If the flat fee charged was $6,000, that yields a profit margin of $5,079, or 84.65%.
Notice that overhead expenses like office supplies, rent, internet, and meals are not included in this calculation. These are not direct expenses necessary to generate revenue—they’re overhead expenses and are excluded from your marginal calculation.
Understanding Cost Rate vs. Billing Rate
This distinction is critical and often misunderstood. Your billing rate is what you charge clients. Your cost rate is what it actually costs your firm for each hour of attorney or staff time.
To calculate an attorney’s cost rate, take their total compensation (salary, benefits, bar dues, CLE costs, malpractice insurance allocation) and divide by their available working hours. A partner earning $350,000 in total compensation with 1,800 available working hours has a cost rate of approximately $194 per hour.
Understanding cost structure gives insight into appropriate billing rates for attorneys within a practice group. With this information, you can balance the practice area’s work, having attorneys with a lower cost rate handle work that doesn’t require a senior partner’s expertise, which helps you adjust profitability for that practice area.
The Hidden Costs Most Firms Ignore
Your cost per case doesn’t begin once you start working on it. It begins when the receptionist answers the phone the first time a prospect calls to inquire. Many firms overlook:
Initial consultation time: Even “free” consultations have a real cost to your firm
Intake processing: Staff time for conflict checks, client onboarding, and file setup
Client communication: Follow-up calls, emails, and status updates throughout the matter
Document revisions: Multiple rounds of changes that extend matter lifecycle
One estate planning firm discovered they had hired a 40-hour-per-week receptionist for what was essentially a 10-hour-per-week job. By outsourcing incoming calls and automating their pre-consultation intake process with an online form, they eliminated one full-time position for a per-call fee model—dramatically improving their per-matter profitability.
Benchmarking: Average Fees and Time by Plan Type
Before you can assess your own profitability, it helps to understand industry benchmarks. Here’s what the data tells us about typical estate planning matter economics.
Simple Wills
Typical flat fee range: $300-$1,500
Average attorney time: 2-4 hours
Paralegal time: 1-2 hours
Effective hourly rate potential: $150-$500
Simple wills represent high-volume, predictable work. The key to profitability is efficiency—firms that have templated their simple will process and can complete matters in under 3 hours of total staff time achieve effective hourly rates that exceed their standard billing rate.
Revocable Living Trusts
Typical flat fee range: $1,500-$4,000
Average attorney time: 5-10 hours
Paralegal time: 3-6 hours
Additional trust funding time: 2-5 hours
Living trusts are typically priced higher than simple wills, but they also require significantly more work—particularly the often-underestimated trust funding process. Firms that charge separately for trust funding ($500-$1,500) typically achieve higher overall profitability than those who bundle it into the trust fee.
Complex Irrevocable Trusts
Typical fee range: $2,500-$7,000+
Average attorney time: 8-20+ hours
Paralegal time: 4-10 hours
Coordination with other professionals: 2-5 hours
Irrevocable trusts—including irrevocable life insurance trusts (ILITs), qualified personal residence trusts (QPRTs), grantor retained annuity trusts (GRATs), and special needs trusts—require specialized expertise and significant coordination. The wider fee range reflects the substantial variation in complexity.
Specialized trusts like asset protection trusts command even higher fees, generally ranging from $2,500-$5,000 due to their additional complexity and the expertise required.
Complete Estate Planning Packages
Typical package range for individuals: $1,000-$3,000
Typical package range for couples: $2,000-$5,600
Components typically included: Will or Trust, Powers of Attorney, Healthcare Directives, HIPAA Authorizations
Package pricing creates opportunities for improved profitability through efficiency. When you bundle services, you can streamline the client intake and consultation process, reducing duplicative work that would occur if each document were prepared as a separate engagement.
The Profit Margin Calculation: A Step-by-Step Method
Now let’s put this all together into an actionable calculation methodology you can apply to your own practice.
Step 1: Calculate Revenue Per Matter Type
For each plan type you offer, determine your average revenue per matter. If you use flat fees (as more than 80% of estate planning clients prefer), this is straightforward. If you bill hourly, calculate your average collected revenue per matter over the past 12 months.
Example: Simple Will Package = $1,200 flat fee
Step 2: Calculate Direct Costs
Track all direct costs associated with completing the matter:
Attorney time: Hours × Attorney cost rate
Paralegal time: Hours × Paralegal cost rate
Hard costs: Filing fees, document costs, etc.
Total Direct Costs: Sum of all the above
Example:
Attorney time: 2.5 hours × $175/hour = $437.50
Paralegal time: 1.5 hours × $65/hour = $97.50
Hard costs: $35
Total Direct Costs: $570
Step 3: Calculate Profit Margin
Profit = Revenue – Direct Costs
Profit Margin = (Profit / Revenue) × 100
Example:
Profit = $1,200 – $570 = $630
Profit Margin = ($630 / $1,200) × 100 = 52.5%
Step 4: Calculate Effective Hourly Rate
This metric helps you compare profitability across different plan types by normalizing for time invested.
Effective Hourly Rate = Profit / Total Hours Invested
Example:
Total hours = 4 (2.5 attorney + 1.5 paralegal)
Effective Hourly Rate = $630 / 4 = $157.50/hour in profit
Comparative Analysis: Simple Wills vs. Irrevocable Trusts
Let’s apply this methodology to compare the profitability of two common estate planning matters: a simple will and a complex irrevocable trust.
Simple Will Analysis
Revenue: $800 flat fee
Attorney time: 1.5 hours @ $175 cost rate = $262.50
Paralegal time: 1 hour @ $65 cost rate = $65
Hard costs: $25
Total costs: $352.50
Profit: $447.50
Profit margin: 55.9%
Effective hourly rate: $179/hour
Complex Irrevocable Trust Analysis
Revenue: $5,000 flat fee
Attorney time: 12 hours @ $200 cost rate = $2,400
Paralegal time: 5 hours @ $65 cost rate = $325
Hard costs: $150
Total costs: $2,875
Profit: $2,125
Profit margin: 42.5%
Effective hourly rate: $125/hour
The Surprising Results
In this example, the simple will generates a higher profit margin (55.9% vs. 42.5%) and a higher effective hourly rate ($179 vs. $125). However, the complex trust generates significantly more absolute profit per matter ($2,125 vs. $447.50).
This illustrates why you need to consider multiple metrics when evaluating plan type profitability:
If attorney capacity is your constraint (you have more work than hours available), focusing on higher effective hourly rate matters like simple wills may maximize firm profitability.
If client acquisition is your constraint (you need more revenue per client), complex trusts deliver higher absolute profit per engagement.
If you have junior attorneys with lower cost rates, complex trusts may become more profitable by delegating appropriate portions of the work.
The Technology Factor: Why Tracking Matters
The calculations above are only valuable if you can actually track the underlying data. This is where most estate planning firms fall short.
Even if your firm uses flat fees (as most estate planning firms do), you should still track time. Without time data, you’re flying blind when it comes to understanding which matters are profitable and which are draining resources.
The legal industry continues to evolve rapidly. Technology spending increased 6.6% above the rate of inflation as firms invest in tools to improve efficiency and profitability. The firms that leverage matter-level profitability data will have a significant competitive advantage.
Essential Capabilities for Profitability Tracking
Your practice management system should enable you to:
Track time by matter and plan type, even for flat fee work
Categorize matters by type (simple will, revocable trust, irrevocable trust, etc.)
Generate reports showing revenue, costs, and profitability by matter type
Calculate attorney and staff cost rates automatically
Compare performance across time periods to identify trends
Modern legal billing software like LeanLaw (https://www.leanlaw.co/features/reports-compensation-tracking/) provides these capabilities with deep QuickBooks integration, allowing you to track matter-level profitability in real-time without maintaining separate spreadsheets.
Strategic Applications: Using Profitability Data to Transform Your Practice
Once you have accurate matter-level profitability data, you can make informed strategic decisions that were previously based on intuition alone.
Pricing Optimization
If your simple wills show a profit margin of 35% while your revocable trusts show 55%, you may be underpricing your simple wills relative to the market. Research what competitors in your region and practice area are charging. If all the other estate planning attorneys offer flat packages for wills and trusts at higher rates, you have room to increase prices without losing clients.
Conversely, if complex matters consistently show lower margins than expected, you may need to either increase fees or improve efficiency through better processes and templates.
Staffing Decisions
Matter-level profitability data reveals staffing inefficiencies. If partners are spending significant time on tasks that paralegals or associates could handle at lower cost rates, your margins suffer.
The concept of “highest and best use” can help ensure that the right person is doing the right work at the right time. Partners typically have higher billing rates but also higher cost rates. Ensuring that partners focus on strategic, high-value tasks while associates and paralegals handle routine work can dramatically improve profit margins.
Service Mix Optimization
Your profitability data may reveal that certain plan types deliver consistently higher returns. This doesn’t mean you should abandon lower-margin services—simple wills often serve as client acquisition tools that lead to more profitable trust work. But understanding the economics helps you make intentional decisions about where to focus marketing efforts and which services to emphasize.
A practice area generating $400,000 revenue at 12% margin contributes $48,000 profit. One generating $200,000 at 40% margin contributes $80,000. Without visibility into these numbers, you’d invest in the wrong one.
Client Selection
Not all clients are created equal in terms of profitability. Some may require more time, resources, and attention, while others are more straightforward and generate higher profit margins. By understanding which clients contribute most to the firm’s profitability, you can make more informed decisions about where to invest your time and effort.
Regularly review client profitability by tracking the time spent on each client’s matters and the revenue they generate. If certain client types consistently produce lower margins, consider whether they belong in your ideal client profile.
Common Pitfalls in Profitability Analysis
As you implement matter-level profitability tracking, avoid these common mistakes:
Pitfall 1: Using Billing Rate Instead of Cost Rate
Your billing rate is what you charge; your cost rate is what the work costs. Using billing rates to calculate profitability produces misleading numbers that don’t reflect actual firm economics.
Pitfall 2: Ignoring Write-Offs and Discounts
If you regularly discount fees or write off time, your actual revenue per matter is lower than your stated flat fee. Track what you actually collect, not what you quote.
Pitfall 3: Not Tracking Time on Flat Fee Matters
Many firms stop tracking time once they’ve adopted flat fees. This is a critical mistake. Without time data, you can’t calculate true profitability or identify efficiency improvement opportunities.
Pitfall 4: Analyzing Too Few Matters
Individual matters can vary significantly. Base your analysis on at least 20-30 matters of each type to get statistically meaningful results. Outliers (unusually complex or simple matters) will skew smaller samples.
Pitfall 5: Failing to Update Your Analysis
Profitability isn’t static. Your costs change as you adjust salaries, add staff, or modify processes. Run profitability analysis at minimum annually, and quarterly if you’re making significant operational changes.
Your 30-Day Action Plan
Reading about profitability analysis accomplishes nothing unless you put it into practice. Here’s a concrete action plan to implement these concepts:
Week 1: Data Gathering
Calculate cost rates for all attorneys and staff
Categorize your matters by plan type
Pull revenue data for each plan type over the past 12 months
Week 2: Time Tracking Implementation
If not already tracking time on flat fee matters, start immediately
Ensure all staff understand the importance of accurate time entry
Set up matter-type categories in your practice management system
Week 3: Initial Analysis
Calculate profit margins for each plan type using historical data
Identify your highest and lowest margin services
Calculate effective hourly rates by plan type
Week 4: Strategic Planning
Compare your fees to market rates for low-margin services
Identify process improvements for high-volume, lower-margin work
Set quarterly review dates to monitor profitability trends
The Bottom Line
The question of whether a complex irrevocable trust is more profitable than a simple will doesn’t have a universal answer. It depends on your pricing, your efficiency, your cost structure, and your strategic priorities.
What does have a universal answer is this: firms that measure and analyze matter-level profitability make better decisions than those operating on intuition alone. They price more accurately, staff more efficiently, and invest in the services that actually drive their bottom line.
The legal industry is evolving rapidly. Clients expect transparency, technology is reshaping workflows, and the traditional billable hour model faces increasing pressure. Estate planning firms that embrace data-driven profitability analysis will thrive in this new environment.
Your estate planning practice is either your biggest weakness or your greatest opportunity. The data will tell you which—if you’re willing to look.
Frequently Asked Questions
Q: Should I still track time even though I use flat fees for estate planning?
A: Absolutely. Tracking time is essential for understanding matter-level profitability, even when you don’t bill by the hour. Without time data, you can’t calculate your effective hourly rate, identify efficiency opportunities, or know which plan types are truly profitable. The most successful flat-fee firms track every minute—not for billing, but for business intelligence. This data allows you to adjust pricing, improve processes, and make strategic decisions about your service mix.
Q: What’s a good profit margin for an estate planning practice?
A: A good profit margin for law firms typically falls between 30% and 35%, but estate planning practices can often achieve higher margins due to the predictable, process-driven nature of the work. Top-performing estate planning firms report margins of 40% or higher on certain plan types. However, don’t focus solely on margin—also consider absolute profit per matter and effective hourly rate. A lower-margin matter that generates $2,000 in profit may be more valuable than a higher-margin matter that generates $500.
Q: How often should I review matter-level profitability?
A: Review profitability at minimum annually, but quarterly is ideal. Monthly reviews may be appropriate if you’re actively testing new pricing or processes. Look for trends over time rather than focusing on individual months. Seasonal variations, one-off complex matters, and staffing changes can all affect short-term numbers. The key is establishing a regular cadence of review that allows you to identify meaningful patterns and make timely adjustments.
Q: My complex trust matters seem less profitable per hour than simple wills. Should I stop offering them?
A: Not necessarily. Consider the full picture: complex trusts often generate higher absolute profit per matter, build deeper client relationships, and establish your expertise in the market. They may also lead to referrals and repeat business. Before making changes, analyze whether you can improve complex matter profitability through better pricing, more efficient processes, or optimized staffing. Sometimes the issue isn’t the matter type—it’s how you’re executing it.
Q: How do I calculate cost rate for an attorney who also handles administrative tasks?
A: Calculate cost rate based on total compensation divided by total available working hours, regardless of how those hours are spent. If an attorney earning $200,000 works 1,800 hours per year (some billable, some administrative), their cost rate is approximately $111 per hour. The cost rate applies to all their time. This is why having attorneys do administrative work is expensive—you’re paying $111 per hour for work that a $35-per-hour staff member could handle. This calculation often reveals why proper delegation dramatically improves firm profitability.
Sources
Clio. “2024 Legal Trends Report.”
FindLaw. “What Does an Average Estate Plan Cost?” November 2025.
LegalZoom. “How Much Does Estate Planning Cost?” January 2026.
Centerbase. “Understanding the Basics of Law Firm Profitability.” February 2025.
CARET Legal. “Law Firm Profitability Metrics: How to Plan for Growth.” October 2025.
BQE Software. “How to Calculate Profit Margins for Law Firms.”
RunSensible. “Law Firm Profitability Metrics.” June 2025.
Bill4Time. “Should Your Law Firm Offer Fixed Fees?” July 2025.
