Utilization, realization and collection: the three leaks between your hours and your income.
Most solos start in one or two practice areas they already know, with a low-overhead office and every intake call answered. The first year teaches what a matter really costs in hours; set up the trust account and the conflicts check before the first retainer arrives.
Record time daily, bill monthly and collect before the next invoice. Utilization, realization and collection multiply: a firm at the average collects about 2.4 of every eight hours worked.
Growth means someone else doing the work you can delegate, billed at their rate. A paralegal who frees ten of your hours a week can be worth more than a new client.
Mature practices move routine work to flat fees and subscriptions (estate plans, monthly business counsel) and become the known name for one kind of matter. Predictable fees make cash flow, and the firm, easier to value.
| Revenue stream | Pays | Scales |
|---|---|---|
| Hourly matters The traditional model, and only as good as your utilization, realization and collection. | High per hour | Low |
| Evergreen retainers Client funds held in trust and drawn as the work is done. The best defence against unpaid invoices. | Cash first | Medium |
| Flat-fee matters Wills, formations, filings. Rewards efficiency instead of punishing it. | High if scoped | Good |
| Consultations A paid consult screens out the matters you shouldn't take and often becomes the engagement. | Small | Low |
| Filing & court costs Advanced costs, not income. Track them apart or they hide in revenue. | Pass-through | n/a |
| Subscription counsel A monthly fee for a defined level of advice. Steady, and rare enough to stand out. | Recurring | Excellent |
| Contingency Personal injury and some employment work. Months of costs before a fee; cash reserves decide whether you can wait. | Lumpy, high | Medium |
Practicing law is regulated by each state's highest court and bar. Client money goes into a trust account and is never mixed with the firm's (Rule 1.15 in most states' versions of the ABA Model Rules); fees must be reasonable and, in most matters, explained in writing; advertising and solicitation are restricted; and in almost every state a lawyer may not share fees with, or be owned by, non-lawyers (Arizona and Utah run their own exceptions). Generative AI is allowed but brings duties of competence, confidentiality, supervision and reasonable fees (ABA Formal Opinion 512, July 2024). Oregon requires lawyers in private practice to carry malpractice coverage, and many states require you to tell the bar or your clients whether you carry it. This is general information, not legal advice.
Run this against real numbers → The same handbook inside the tool, on a worked example you can swap for your own spreadsheet. Free, no account.Figures are sourced from published industry research (IBISWorld, trade associations and regulator data) and are stated with their year. They describe typical conditions, not your situation. This is general information for business owners, not financial, tax, or legal advice.