Value the time you would get back
Method: freed hours a year = people × share of a day × hours in a day × working weeks. Billable hours = freed hours × the share you expect to bill. Value = billable hours × charge-out rate. Full-time equivalent = freed hours ÷ (hours in a day × 5 × working weeks). The starting figures only show how it works: replace them with yours.
Why measure capacity instead of cost?
Cost arguments tend to stall. A partner group hears that admin costs a large sum a year and nods, because the money was never visible and cutting it feels abstract. Capacity is different. Most firms of 20 to 200 people are turning work away, or doing it late, because the people who can do it are full. Framing the gain as extra days of senior time answers the question a managing partner is already asking: how do we take on more without hiring?
How should you choose the inputs?
Be conservative on the share that becomes billable. If the figure only works when every freed hour is invoiced, it will not survive scrutiny. Be specific about the people: a day a week for eight senior fee earners is worth far more than the same day spread across the whole firm, because the bottleneck is usually at the top. The partner bottleneck explains why.
How does this compare with hiring?
The full-time equivalent figure is the capacity you would otherwise recruit for. A hire brings recruitment time, time to competence and a permanent cost. Rebuilding the process that consumes the time brings none of those, but only frees capacity where the time is being lost. The comparison of automation and hiring sets out when each is the right answer.