How We Built a Credible ROI Calculator (Without the BS)

Most ROI calculators are garbage.

You've seen them. The ones that promise 500x returns. The ones where every assumption is wildly optimistic. The ones where you can tell the company just worked backwards from "what number will close deals" instead of "what number is actually true."

They destroy trust instead of building it.

When we decided to build an ROI calculator for Precedent's Demand Composer, we had one rule: it has to be more conservative than reality, not less.

Here's how we did it.

The Foundation: Real Customer Data

We didn't start with a spreadsheet and some guesses. We started with the Hines Law Firm case study — a comprehensive analysis of 522 personal injury settlements comparing demands drafted with Precedent versus traditional methods.

The data showed:

• +16% average settlement increase (with $50K cases showing +42%)
• +71% improvement in tender rate (cases settling at policy limits)
• 45% faster resolution (days to settlement)
• 15 minutes to draft (down from 4-10 hours)

That's real. We can point to specific cases, specific outcomes, specific metrics.

But here's where most companies go wrong: they take those numbers and multiply them all together, add some "efficiency gains," and suddenly claim 200x ROI.

We did the opposite.

The Conservative Approach: Leaving Money on the Table

Decision 1: Use 16%, Not 42%

The Hines data showed that $50K cases saw a 42% settlement increase. That's dramatic. That's the kind of number that makes prospects lean forward.

We didn't use it.

Instead, we used 16% — the overall average — and applied it across all case types. Why?

1. Every firm is different. Hines' results are real, but they're Hines' results. A different case mix, different jurisdictions, different negotiation styles — all of that affects outcomes.

2. Better to underpredict and overdeliver. If we tell a prospect they'll see 16% and they see 25%, we're heroes. If we tell them 42% and they see 30%, we're liars.

3. Credibility matters more than excitement. A prospect who believes a 16% increase will sign just as fast as one who's skeptical of a 42% claim. Actually, faster — because they trust us.

Decision 2: No Double-Counting

The Hines data showed both:

• +16% settlement increase
• +71% tender rate improvement

Here's the problem: these aren't independent. Higher tender rates likely contribute to the settlement increase. If we counted both, we'd be inflating the benefit.

So we only count the settlement increase. The tender rate improvement is already baked in.

Same with "45% faster resolution." That's valuable (faster cash flow, lower carrying costs), but it's a secondary benefit. We mention it in the case study, but we don't add it to the ROI calculation.

One clear benefit beats three fuzzy ones.

Decision 3: Apply an 80% Adoption Rate

Even if a firm buys Precedent, not every single demand will use it. Maybe some attorneys prefer the old way. Maybe some case types don't fit the tool. Maybe there's a ramp-up period.

So we assume 80% of demands use Precedent, not 100%.

Is this pessimistic? Maybe. But it's realistic. And it means the calculator doesn't promise outcomes that require perfect execution.

Decision 4: Only Count the Firm's Share

When a settlement increases by $10,000, the law firm doesn't keep $10,000. They keep their contingency fee — typically 33%.

So a $10,000 increase becomes $3,300 in firm revenue.

This seems obvious, but you'd be surprised how many ROI calculators skip this step. They show the gross benefit instead of the net benefit to the buyer.

We show both (gross settlement lift and firm revenue lift), but only the firm's share goes into the ROI calculation.

The Two-Tier Value Proposition

We structured the calculator around two distinct benefits:

Tier 1: Operational Savings (Hard Cost Reduction)

This is the "pays for itself" benefit:

Hours Saved = (Current Time - 15 min) × Annual Demands Cost Savings = Hours Saved × $45/hour (fully-burdened paralegal cost)

Example: A firm doing 50 demands/month at 6 hours each currently spends 3,600 hours/year. With Precedent (15 min/demand), that drops to 150 hours/year. 3,450 hours saved × $45/hr = $155,250/year.

At $175/demand (50+ volume pricing), that's $105,000/year in software cost.

The software pays for itself 1.5x over on time savings alone.

Tier 2: Revenue Growth (Settlement Increase)

This is the "grow your firm" benefit:

Affected Cases = Annual Demands × 80% adoption Settlement Lift = Affected Cases × Avg Case Value × 16% Firm Revenue = Settlement Lift × 33% contingency fee

Example: Same firm, $50K average case value:

• 600 demands/year × 80% = 480 affected cases
• 480 cases × $50K × 16% = $3,840,000 settlement lift
• $3,840,000 × 33% = $1,267,200 in additional firm revenue

Add Tier 1 + Tier 2 = $1,422,450 total annual benefit on a $105,000 investment.

That's a 13.5x ROI.

Not 100x. Not 500x. 13.5x.

And we can defend every single number in that calculation.

The Result: Credibility Over Hype

The feedback from our sales team was unanimous: "This feels real."

Not "this is exciting" or "this will close deals." "This feels real."

That's exactly what we wanted. We used the overall average (not the best case), excluded overlapping metrics, accounted for realistic adoption (80%, not 100%), and applied the contingency fee so prospects see their actual benefit, not ours.

Every number is defensible. Every assumption is conservative. Every calculation is transparent.

Try It Yourself

Visit our ROI calculator and plug in your firm's numbers. Then look at the "How We Calculated This" section.

Every number is backed by real data. Every assumption is disclosed. Every calculation is transparent.

If you can't poke holes in it — that's the point.

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Further Reading:

• Hines Law Firm Case Study — The 522-case analysis behind the calculator
• ROI Calculator — Calculate your potential ROI