{"id":10835,"date":"2022-08-01T12:06:38","date_gmt":"2022-08-01T18:06:38","guid":{"rendered":"https:\/\/nqzw.com\/?p=10835"},"modified":"2022-10-18T14:11:34","modified_gmt":"2022-10-18T20:11:34","slug":"worked-billed-paid-realization","status":"publish","type":"post","link":"https:\/\/zebraworks.com\/en_gb\/worked-billed-paid-realization\/","title":{"rendered":"Realization \u2013 the most important KPI in your firm"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"10835\" class=\"elementor elementor-10835\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-3841a5f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3841a5f\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-b5d0cc7\" data-id=\"b5d0cc7\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-6568bb4 elementor-widget elementor-widget-text-editor\" data-id=\"6568bb4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span data-contrast=\"auto\">If I could have only one KPI to evaluate the health and financial performance of a law firm, it would be realization. The overall realization rate for your firm is the amount of money collected divided by the value of the billable time captured.\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">To turn realization into real insight, break it down into its three component parts:<\/span><span data-ccp-props=\"{}\">\u00a0<\/span><\/p><ul><li><strong>Worked Realization: <\/strong><span class=\"NormalTextRun SCXW80973684 BCX0\">h<\/span><span class=\"NormalTextRun SCXW80973684 BCX0\">ow much of each attorney\u2019s working day turns into billable hours? Although many attorneys work much longer hours, the simplest way to calculate is assume an <\/span><span class=\"NormalTextRun ContextualSpellingAndGrammarErrorV2Themed SCXW80973684 BCX0\">8 hour<\/span><span class=\"NormalTextRun SCXW80973684 BCX0\"> day for each working day, divided by the number of billable hours captured, and you\u2019ve got a worked realization %. We\u2019re not trying to perfectly capture the ratio, but instead create a metric that can be tracked across attorneys, departments and over time for comparison.<\/span><\/li><li><strong>Billed Realization: <\/strong><span class=\"NormalTextRun SCXW240502625 BCX0\">w<\/span><span class=\"NormalTextRun SCXW240502625 BCX0\">hat portion of the billable time that was captured <\/span><span class=\"NormalTextRun SCXW240502625 BCX0\">makes<\/span><span class=\"NormalTextRun SCXW240502625 BCX0\"> it on a bill to a client?<\/span><span class=\"NormalTextRun SCXW240502625 BCX0\"> This takes write ups\/downs into account.\u00a0<\/span><\/li><li><strong>Paid Realization:<\/strong> <span class=\"NormalTextRun SCXW34300996 BCX0\">w<\/span><span class=\"NormalTextRun SCXW34300996 BCX0\">hat percentage of that billed time is then paid by the client? <\/span><span class=\"NormalTextRun SCXW34300996 BCX0\">This, of course, takes write-offs into account.<\/span><\/li><\/ul><p><span class=\"TextRun SCXW158108709 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW158108709 BCX0\">The <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">worked<\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">, <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">billed<\/span> <span class=\"NormalTextRun SCXW158108709 BCX0\">and <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">paid <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">components of realization <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">tracks the performance of your firm through the entire cycle. <\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">However<\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">, when seeing the numbers in isolation, it\u2019s hard to make sense of them. If you have a 40% worked realization, is that good or bad? What about 95% billed realization or a<\/span><span class=\"NormalTextRun SCXW158108709 BCX0\">n<\/span><span class=\"NormalTextRun SCXW158108709 BCX0\"> 89% paid realization?<\/span><\/span><span class=\"EOP SCXW158108709 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/p><p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-10850 size-full\" src=\"https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1.png\" alt=\"\" width=\"2652\" height=\"1274\" srcset=\"https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1.png 2652w, https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1-300x144.png 300w, https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1-1024x492.png 1024w, https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1-768x369.png 768w, https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1-1536x738.png 1536w, https:\/\/zebraworks.com\/wp-content\/uploads\/2022\/08\/Realization-1-2048x984.png 2048w\" sizes=\"(max-width: 2652px) 100vw, 2652px\" \/><\/p><p><strong>Period Comparison\u00a0<\/strong><\/p><p><span class=\"TextRun SCXW169176086 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW169176086 BCX0\">It\u2019s when you track the numbers over time that they really develop meaning. Seeing each month of the current year compared to the monthly periods of the last couple of years makes the trends obvious. I prefer seeing it monthly because it shows the seasonality inherent in any of your practice areas. Seeing how you\u2019ve done so far this year compared to the last two years makes it easy to forecast the remainder of the year.\u00a0<\/span><\/span><span class=\"EOP SCXW169176086 BCX0\" data-ccp-props=\"{}\">\u00a0<\/span><\/p><p><strong>So, are those numbers good?<\/strong><\/p><p>I threw out some example realization numbers above. What really matters for your firm is how they change over time, but it\u2019s useful to understand the context of the legal industry:<\/p><ul><li>40% worked: the average in small firms is 31% according to Clio (which is going to be small firms), while Thomson Reuters reports 77% in large law (both based on 8 hour work day).\u00a0<\/li><li>95% billed: TR reports 85% billed realization in large law in the first half of 2021.<\/li><li>89% paid: depends on practice area. In 2020, you go from a low of 78% collection rate in bankruptcy to 97% in worker\u2019s comp. In the middle of the road, practice areas like business, corporate, IP, and real estate all hover around 92%. Thomson Reuters reported an industry wide paid realization of 90.6% for 2021.<\/li><\/ul><p><b>Powerful Visualizations<\/b><\/p><p>Presenting this information visually, you instantly communicate deep analysis that would be challenging to pull out of traditional paginated reports lined up across the conference room table. Realization is just one example of the power of <a href=\"https:\/\/zebraworks.com\/en_gb\/dataq\/\">DataQ<\/a>.\u00a0<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-5a429cd elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"5a429cd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1433375\" data-id=\"1433375\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-8465e99 elementor-widget elementor-widget-heading\" data-id=\"8465e99\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Author<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ef39f6f uael-member-image-pos-left uael-shape-square elementor-widget elementor-widget-uael-team-member\" data-id=\"ef39f6f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"uael-team-member.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"uael-member-stacked-mobile uael-member-image-valign-top uael-team-member\">\n\t\t\t<div class = \"uael-team-member-wrap\" >\n\t\t\t\t<div class=\"uael-member-wrap\" >\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-team-member-image\">\n\t\t\t\t\t\t\t<div class=\"elementor-animation-\"><img decoding=\"async\" width=\"300\" height=\"300\" src=\"https:\/\/zebraworks.com\/wp-content\/uploads\/2021\/10\/our-team-bill-bice-01-300x300.png\" class=\"attachment-medium size-medium wp-image-8259\" alt=\"\" srcset=\"https:\/\/zebraworks.com\/wp-content\/uploads\/2021\/10\/our-team-bill-bice-01-300x300.png 300w, https:\/\/zebraworks.com\/wp-content\/uploads\/2021\/10\/our-team-bill-bice-01-150x150.png 150w, https:\/\/zebraworks.com\/wp-content\/uploads\/2021\/10\/our-team-bill-bice-01.png 406w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/div>\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-team-member-content\">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-team-member-name\">\n\t\t\t\t\t\t<h3 class=\"uael-team-name\">Bill Bice <\/h3>\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-team-member-designation\">\n\t\t\t\t\t\t\t<div class=\"uael-team-desig\">CEO | nQ Zebraworks\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-separator-wrapper\">\n\t\t\t<span class=\"uael-separator\"><\/span>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"uael-team-member-desc\">\n\t\t\t\t\t\t\t<div class=\"uael-team-desc\">Recognized as a legal tech industry visionary, receiving Thomson\u2019s innovator of the year award. Founder of ProLaw Software (acquired by Thomson Reuters), West km (used by 70% of the top 1000 law firms worldwide) and Exemplify (acquired by Bloomberg Law).<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t<\/div>\n\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>If I could have only one KPI to evaluate the health and financial performance of a law firm, it would be realization. The overall realization rate for your firm is [&hellip;]<\/p>\n","protected":false},"author":23,"featured_media":11069,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[50],"tags":[],"class_list":["post-10835","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/posts\/10835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/comments?post=10835"}],"version-history":[{"count":0,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/posts\/10835\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/media\/11069"}],"wp:attachment":[{"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/media?parent=10835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/categories?post=10835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zebraworks.com\/en_gb\/wp-json\/wp\/v2\/tags?post=10835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}