PI Practice Operations — Economics Model

Personal injury practice  ·  Financial impact analysis

Section 1 — Firm baseline (before integration)

2
115 cases
8 months
1.5 months
$30,000
33%
Median: ~33%
30%

Total active caseload (current)

230 cases

Pre-lit staff × cases per staff member

Cases settled per year (current)

345 / yr

230 ÷ 8 × 12 = 345

Avg fee per case

$9,900

At contingency rate

Annual fee revenue (current)

$3,415,500

Annual

Pre-lit net profit (current)

$1,024,650

Profit-share baseline


Section 2 — Integration impact levers

After AI integration, pre-lit staff capacity expands (more active cases simultaneously) and cases cycle faster (shorter duration). Both effects increase annual settled cases. The model applies them sequentially: capacity multiplier first, then post-AI duration.

60%
1.5×
12 hrs
$50 / hr
Documented range: 15–30%
15%
90%
Recovery rate: 90%   •   Net platform cost to firm: $25 per case

Cases per staff member (post-AI)

At 1.3× capacity increase

Total active caseload (post-AI)

Same pre-lit staff, more capacity

Post-AI case duration

Current minus AI reduction

Cases settled / yr (post-AI)

Total incremental cases / yr

Capacity: +  ·  Duration: +

Section 3 — Annual results: firm perspective

Time savings value

Hours recovered × blended cost

Increased contingency fee revenue

Better demands → higher settlements

Caseload growth revenue

+ cases/yr (capacity + duration effects)

AI platform cost (annual)

Net cost: $25 per case

Total profit improvement

Before leadership compensation

Annual fee revenue (post-AI)

Cases settled × avg fee per case

New pre-lit net profit

After AI costs, before comp


Section 4 — Integration leadership compensation

$7,500
25%

Section 5 — Compensation & net benefit to firm

Annual retainer

Fixed cost to firm

Profit share

25% of net improvement

Total compensation cost

Retainer + profit share

Net benefit to firm

Additional annual profit after comp and costs

Return on compensation cost

For every $1 paid, firm gains $X

Compelling case — the firm gains significantly after all compensation

← Return to main page