Course · Law and Data
Matter Economics and Pricing
How a legal matter makes or loses money: realisation, estimating with ranges, fee structures, pricing a fixed fee, staffing and leverage, and tracking scope change.
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Lawyers are taught to solve the client's problem and rarely taught what solving it costs. This course teaches the economics of a legal matter: where the value of the time goes before it becomes cash, how to estimate the work honestly with a range, how each fee structure divides the risk between firm and client, how to price a fixed fee and protect it with assumptions, who should do the work, and how to catch a matter that is slipping while there is still time to ask the client for more. Every lab runs in your browser, with invented firms and figures.
The Curriculum
Where the money goes: the matter as a small business→
Standard value, billing, collection, cost of time, margin, utilisation and leverage. Lab: Matter P&L.
Realisation and leakage→
Why the rate card is not the income: write-downs, discounts, bad debts and lock-up. Lab: Realisation Waterfall.
Estimating the work→
Phases, three-point estimates, combining uncertainty and stating a range. Lab: Phase Estimator.
Fee structures: who carries which risk→
Hourly, fixed, capped, collar, contingency and hybrid, and what each does to behaviour. Lab: Fee Structure Simulator.
Pricing a fixed fee→
Cost to price, margin against markup, break-even hours and the assumptions that protect the fee. Lab: Fixed Fee Calculator.
Staffing and leverage→
The pyramid, the blended rate, profit per partner and staffing by task. Lab: Staffing Mix.
Tracking and scope change→
Budget against progress, forecasts, alert rules and the early conversation with the client. Lab: Burn Tracker.
Capstone: Price the Thessaly Biotech proposal→
Choose the structure, price and assumptions for a client that wants no surprises, and test them against 4,000 simulated outcomes.
What It Covers
“Built so you can price legal work with numbers you can defend, and know in week five, not week twelve, that a matter is slipping.”
- Every lab runs in your browser with invented firms and figures, and the simulations are seeded so you can check the answers.
- Spreadsheet-level maths only, and it works in any country.
- A capstone where you price a proposal and see how it fares against thousands of simulated outcomes.
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Other Scrolls in This Chamber
Legal Risk Quantification$15 →Turn legal judgement into numbers a client can use: probabilities, ranges, expected cost, decision trees, simulation and risk registers.
Contract Analytics for Lawyers$15 →Turn contracts into data: a clause library, cleaning, portfolio questions, renewals and notice deadlines, benchmarks and honest reading of results.
The Legal AI Lab$49 →Working tools for lawyers who use AI: a contract pipeline, a due diligence data room, verification, stress tests and more. The first exercise of each tool is free.Module 1 is free to try. Sign in, pass each module quiz and the course average, and your Certificate of Completion is emailed to you automatically. This course teaches a method with invented firms, rates and figures; it is not financial or legal advice.
Legal matter economics: common questions
- What is realisation in a law firm?
- Realisation is the share of the standard value of a lawyer's time that the firm actually collects. Billing realisation is the amount billed divided by standard value, the collection rate is the cash collected divided by the amount billed, and overall realisation is the two multiplied together. A firm that bills 90% of standard value and collects 95% of its bills has realised 85.5%.
- How do you price a fixed fee for legal work?
- Estimate the hours of each phase with a best, likely and worst case, combine them into an expected total, and multiply by the loaded cost per hour of the people who will do the work. Then divide that expected cost by one minus your target margin. Write down the assumptions the fee depends on, and say what happens if one of them fails.
- What is the difference between margin and markup?
- Margin is profit divided by the price, and markup is profit divided by the cost. A matter that costs $75,000 and is sold for $100,000 has a margin of 25% and a markup of 33%. Pricing at cost plus 20% gives a margin of only 16.7%, which is why mixing the two up quietly gives away profit.
- Which fee structure carries the least risk for the client?
- A fixed fee gives the client the most certainty, because the firm carries the risk that the work takes longer. A capped fee protects the client from the worst case while still charging by the hour, and a collar limits both the highest and the lowest fee. Hourly billing leaves all the volume risk with the client, which is why clients ask for estimates and budgets.
- Do I need to be an accountant to follow this course?
- No. The arithmetic is at spreadsheet level: percentages, averages and a little probability, all explained with worked examples. Every lab runs in your browser with invented firms and figures, so you can experiment freely.
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