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Profitability Calculator

To view the profitability form please view this page on a desktop computer.

Bott and Co Solicitors have used a number of mixed case suppliers over the years. Such suppliers tend to have a multi-media approach to PI claims generation with a heavy television presence and prominent online marketing.

As they supply a mix of case types and as these can often take years to process there is difficulty in trying to establish the financial viability of the work.For Bott the profitability was always marginal and the turning point for us came with the reduction of the RTA portal fees last April. In the absence of a reduction in marketing spend per lead by the supplier this meant a greater acquisition cost was put onto EL/PL cases. We no longer take work from such sources and would like to share our model in the hope it can assist with your decision making.

1 Gross Lead to Accepted Case Profile

The start point - What is the profile of paying cases received from your supplier?

We reviewed historic data and concluded the above profile in respect of every 100 gross leads received from a mixed RTA, EL/PL supplier. It is of note that whilst EL/PL made up 68% of leads they only accounted for 45% of paying cases so only 23% of such leads were successful

Input your own figures in the cells highlighted red above. Alternatively if you wish to assume your profile is the same as ours please move onto
step 2.

Total Gross LeadsEL/PLRTA
Total leads
Of which are successful
Off which are unsuccessful

2 Case Acquisition Cost and Processing Cost

Please insert the information in the red boxes in respect of your EL/PL supplier and operating costs.

Please note we have assumed an RTA case acquisition cost of £500 per case in line with prevailing market conditions. The period selected can be any-time eg last month, last year.

Alternatively if you wish to assume your profile is the same as ours please move onto
step 3

Cost of the specific source leads received last period
Gross leads received last period (All leads including RTA)
Employment Cost pa of an EL/PL Fee Earner Unit
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Indirect Overheads
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3 Average Revenue Per Case and Lock-up

Look back over the last 3 full financial years to establish the average revenue per EL/PL case and the average case age on conclusion.

If you don't have 3 years data use what you do have - The longer the period of time selected the more accurate it should be.

Last 3 Years EL/PL Revenue
Number of Paid EL/PL Cases
Average Case Turnaround Time (days)

4 Percentage of Paying Cases in Current Live Files

We looked at the EL/PL live files as at 5th April 2010 and tracked them to conclusion. We still had 14 live cases which we've assumed will go to be successful. Your figures don't have to reference this date but for accuracy the older the data the more accurate it will be.

Insert your own figures in red - alternatively use ours and move onto
step 5.

Number Of Live EL/PL Cases as of your chosen date (see below)
Of which have since had costs paid
Of which have since been withdrawn

5 Assume a Full Caseload for an EL/PL Fee Earner Unit (including support staff)

Insert the number of EL/PL cases that make up a full caseload.

Full EL/PL Caseload (number of files)

Now we can conclude an EL/PL Fee Earner's Profitability as follows

Revenue
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Cost of Aquisition
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Gross Margin
Direct Salaries for Fee Earner Team
Variable Costs (SIF/P&S/Postage/Telecom etc)
Interest
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Contribution
Fixed Costs
Profit (+) Loss (-) per Fee Earner

* Assume 5% of revenue

** Financing Cost of support and EL/Pl caseload at 5% simple interest


Now repeat the process by inserting the revenue per EL/PL case you would expect from a post-August 2013 matter, taking into account the EL/PL portal by amending the revenue and case number from section 3. You may also want to factor in a reduction in lock-up, also in section 3.

Important point

Before making any decision please include an analysis of the profitability of the RTA supply.