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What Should Your Profit Margin Be?
by Barbara Lewis MBA and Dan Otto MBA

Centurion Consulting Group has found that law firm profit margins vary from 5 percent to 60 percent.  The average law firm has about a 30 percent profit margin (before partner draws).   Oftentimes, attorneys don't know what their profit margin is and they may wonder why they are working so hard and earning so little.

Action Step:

Calculate your profit margin (subtract your expenses from your revenues and divide that number by your revenues).  That figure is the percentage of your revenues that is your profit.  If your profit is less than 30%, you're not hitting the average law firm benchmark.

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