Simplifying performance with average rate and revenue lock-up
FWO works exclusively with SME law firms, helping them cut through financial complexity and focus on the numbers that matter. When it comes to profitability and cash flow, two numbers stand out as game changers: average rate and revenue lock-up.
- Average Rate: Your profitability engine
This is the real hourly return on the time you’re paying for, across all fee earners. It includes billable and non-billable time, leave and downtime.
It tells you how efficiently your firm turns labour into revenue. If your average rate isn’t comfortably above your breakeven rate, you’re working hard without financial reward.
- Revenue Lock-Up: Your cash flow compass
This is the percentage of revenue stuck in WIP and debtors. A high lock-up percentage signals slow cash flow and puts pressure on your operations.
Best-practice firms aim for lock-up below 20 percent. That’s when your work turns into cash, quickly and predictably.
How to improve both:
- Encourage daily time entry and use MiNumbers for clear visibility
- Set clear financial targets and make them visible to your team
- Centralise billing to avoid fee earner discretion and delays
- Bill regularly and agree payment terms upfront to reduce risk
These two numbers can transform your firm. At FWO, we help SME law firms across Australia take control of their financial performance and build a more profitable, sustainable practice.
