Profitability analysis for professional services and law firms

In a firm that sells expertise, the gap between billed and earned is everything – and the timesheet, oddly, hides it. Standard rates assume a clean conversion from hours to revenue, but the real economics live in the time that never reaches an invoice: scoping, admin, coordination, rework, write-downs and the senior time quietly spent rescuing a matter. A matter at full rate can still lose money.

TDABC closes the gap by writing a time equation per matter type and costing each engagement by the minutes it really consumes, billable or not. The payoff is specific: true profit by client and practice area, a clear view of which matter types are structurally unprofitable, and pricing or staffing fixes – scoping discipline, leverage, fixed-fee design – grounded in real cost.

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