How much of what your firm earned last year reached the bank?

How the diagnostic works

Fee leakage is the gap between the value of the work a firm does and the cash it collects for it. Little of it goes in one place. It is spread across small decisions, each reasonable on the day: an hour never recorded, a matter that grew without a scope letter, an invoice trimmed before it went out. The diagnostic adds those decisions up.

What it asks

Thirteen inputs. Two describe the firm: how many fee earners it has, and its blended charge-out rate. Eleven are scored, in five areas:

• Pricing at the point of sale. The share of matters billed at the full headline rate, and who can approve a below-card rate.
• Scope. How many matters finished over the original estimate with the extra work absorbed, and whether a change of scope is put in writing.
• Time capture. How quickly work reaches the time sheet once it is done.
• Realisation, write-offs and lock-up. Firm-wide realisation, what was written off last year, who approves a write-off, and the average number of days between work being done and the cash landing.
• Clients and partner time. The share of revenue from clients who chose the firm mainly on price, and how much partner time went on work that could have been done at a lower rate.

How it scores

Each scored answer is worth up to ten points, and the eleven together give a score out of 100. “Don't know” is a real answer and scores zero. It usually means the number has never been reported, not that nobody was paying attention. Four or more is the most common result, and the most useful, because the figures already sit in the practice management system and producing them is the cheapest first move there is.

The figure in pounds

The recoverable figure starts from one assumption: half an hour a day of work done and never recorded, per fee earner. Across 220 working days that is 110 hours a year.

fee earners × 110 hours × blended rate

The time-capture answer then adjusts it. Time recorded the same day loses less, so the figure falls to 60% of the base. Time reconstructed at month end loses more, so it rises to 140%. Ten fee earners at £300 an hour gives 10 × 110 × £300, which is £330,000 before that adjustment. Check the arithmetic. It is meant to be checked.

What you get, and what it is not

Your score shows on screen when you finish. A written report on your thirteen answers follows by email once you confirm your address, and I read every set before it goes. It is a free, self-scored reading, not an audit: it shows where the most is recoverable and where firms in your position usually start. Some questions need figures you may not have to hand, so your progress saves as you go.

The paid step after it is the Fee Leakage Audit, £7,950 fixed. That works from your practice management data rather than your answers: each leak measured matter by matter, priced at your own rates, in a written report for the partnership. The diagnostic tells you whether it is worth doing.

Start the Fee Leakage Diagnostic ↑