Fixed-Fee Cannibalization Calculator

Launching a fixed-fee or productized offer raises one question every managing partner asks: will the new clients it wins outweigh the hourly matters it pulls in? This calculator answers it with the rigor a law firm CFO expects, in language a non-finance partner can follow. It compares two futures for one matter type you bill by the hour today: launching the fixed-fee offer, or not launching. That matters because doing nothing has a cost too when competitors already sell fixed fees. The model separates true cannibalization (clients who would have paid hourly but switch) from new clients and from clients the launch keeps away from competitors, so each is valued correctly. What it calculates: • NPV, IRR and payback of the launch, including working capital released by shorter lockup and installment plans • Break-even switching rate: the most current clients that can move to the fixed fee before the launch stops paying • Switch-neutral fee: the fixed price at which a switching client leaves profit unchanged • New matters needed to break even • Unit economics per matter, including the capacity cost of hours that could have gone to other paying work • A contribution bridge by client group, a break-even heatmap, a sensitivity chart and a 2,000-run simulation with P10/P50/P90 • A five-to-fifteen-year annual model Built to be checked: • Every calculated figure shows its formula with your numbers, from per-hour building blocks to NPV • Every input has a plain-English definition, and a 39-term glossary explains every finance term • Print to PDF produces a partner-meeting pre-read Three illustrative example scenarios are included (estate planning, an employment-law handbook review for small businesses, and uncontested divorce). Replace them with your firm's figures. Private by design: the calculator runs entirely in your browser at your personalized URL. It makes no outbound network requests after loading, stores nothing when you close the tab, and asks for no client or matter identity. What it is not: a launch recommendation, a forecast of client behavior, or a review of fee ethics, trust-account rules for advance fees, compensation-system effects or malpractice coverage for limited-scope work. It does not provide legal, financial, accounting, tax or other professional advice. Outputs require professional review. Built by Legal InnovAI, a law firm strategy and legal operations consultancy.

Matter type: [Estate planning], billed hourly today.
Current practice: 240 matters a year; 9 lawyer hours and 4 support hours per matter; standard rates $425 and $175 an hour; 88% realization; 93% collection; 93-day lockup.
Fixed-fee offer: $2,800 per matter; 5 lawyer and 3.5 support hours planned; 20% of matters overrun by 50%; 98% collection; 30% of clients on a 3-month installment plan; $350 to acquire each new client; $60 software cost per matter.
Client behavior: 150 new matters a year at full adoption (40% in year 1, 75% in year 2, 100% from year 3); 30% of current hourly clients switch; without a launch, 15% of hourly matters are lost to competitors' fixed fees over 3 years, and a launch keeps 60% of them; 10% of new clients later buy an hourly matter; 2% price pressure on remaining hourly work.
Capacity and cost: lawyer cost $210 an hour, support $85; 15% of that cost flexes with hours; 50% of freed lawyer hours and 30% of freed support hours go to other paying work.
Finance: $120,000 launch investment; $60,000 a year fixed program cost; 12% discount rate; 5-year horizon.

Verdict: Launching adds $257k in present value over 5 years. It stays positive even if every remaining hourly client of this type switches.

Headline results:
• NPV: $257,434 at a 12% discount rate (−$120,000 + $25,979 + $76,752 + $107,164 + $88,135 + $79,404)
• Switch-neutral fee: $3,177 in year 1, against a $2,800 fee, so each switching client costs about $360 in year 1
• New matters needed to break even: 88 a year (you assume 150)
• Payback: 2.0 years. IRR: 77.9%
• Simulation: 70% of 2,000 runs positive; P10 to P90 NPV of −$157k to $455k
• Cost of doing nothing: $207k in present value lost to competitors' fixed fees

Year-3 contribution bridge: new clients +$168,697; upsell +$29,355; kept from competitors +$32,469; switching clients −$27,773; hourly price pressure −$11,544; fixed program cost −$64,896; net +$126,308.

Year-3 unit economics: an hourly matter contributes $1,957 after capacity cost; a fixed-fee matter $1,503 for an existing client and $1,125 for a new client after acquisition cost. Every figure on the page shows its formula with these numbers.

Sanitized example, not professional advice. All sales final — use the preview to confirm fit before purchase.

The author has tested this tool on the providers below. The specific model list updates automatically as providers ship new models or retire old ones. Compatibility with providers not listed below is not guaranteed — the tool may not produce equivalent results outside the tested set.

• v1.0.0Current2026-10-29

Existing buyers receive new versions free of charge. Pin to a specific version from your library if your workflow needs the exact bundle behavior of an earlier release.

No reviews yet — be the first after you buy.