Traditionally, lawyers pile on working hours when faced with large amounts of work. More often than not, they forego changing their operations to accommodate the influx of work. The 2018 Clio Legal Trends Report found that the utilization rate (number of billable hours divided by number of hours worked) for lawyers was a mere 30%. This means that only about one-third of the workday was being spent on billable time.
The report further estimated that only about 81% of billable hours are actually invoiced, the realization of which, in turn, stands at 85%. Unfortunately, lawyers are missing out on revenue for the majority of their working hours.
However, lawyers can address this productivity discrepancy by maintaining detailed records on how they spend their time. Fostering a habit of meticulously tracking time will enable lawyers to measure their billable hours most effectively. Moreover, by tracking non-billable hours, lawyers can identify those areas where drawing in outsourcing services might prove worthwhile.
Utilizing time tracking and billing software
Pulling billable time from working hours is a prime factor in determining professional growth for lawyers. Tracking billable hours is also crucial for law firms that have established alternate billing models. The billable hours can be used to correlate the value of fixed fee rates to the investments of time and efforts.
Invoices generated by lawyers have to fulfil the legal parameters of ethical and professional rules set by jurisdictions. It would serve lawyers and law firms to keep tabs on those methods that can address their timekeeping concerns. Recently, innovative billing solutions have become commonplace when it comes to handling billing requirements while simultaneously speeding up invoice realizations.
An accurate invoice can be generated when it is billed in concurrence with the performance of the tasks. Relying on memory to retrace the steps of billable assignments opens the door to forgetting to include billable elements of the assignments in question. More billable elements are likely to get lost as the time grows between the completion of the assignment and billing
Some lawyers choose to manually track their time, client, and task descriptions on paper for subsequent entry into timesheets. However, this can create issues when the information is recorded on multiple notebooks or notes as they can become lost and buried in mountains of paperwork.
Billing solutions such as Bilr , which enable lawyers to record their billable hours with their voice , can combat the aforementioned issues. Bilr enables lawyers to participate in best practice timekeeping from their car, the court house or even at home. Bilr also offers something that most legal software platforms do not: automated invoice review.
Bilr uses machine learning technology to automatically scan legal invoices for billing guidance compliance prior to sending it to clients, which is helpful for law firms billing into insurance firms and other enterprises with established e-billing processes.
Adding onto this, lawyers can create and export their invoices in LEDES formats with UTMBS codes prior to the automated check, enabling law firms to fix any potential non-compliance issues that their client would flag during dispute resolution.
Some additional key features that lawyers and law firms should look for in billing solutions include:
- electronic bill reminders,
- integration with payment gateways,
- multi-currency payment methods,
- dictation and automatic transcription,
- attorney performance management,
- in-depth analytics and reports,
- LEDES enabled e-billing
These features should be supplemented with practice and matter management features such as interactive budget tracking and digital case file repositories.
Attorney billing software reduces the time a lawyer needs to spend hassling with timesheets, tracking billable hours and reviewing line items and invoices. This frees lawyers up for more valuable and productive work. Legal billing software liberates lawyers to spend more time on tasks that are billable, and less time fiddling with timekeeping and e-billing.
Non-billable hours must not be an afterthought
While deciding how to track their billable time, lawyers must also pay attention to non-billable hours to optimize their productivity and assist with decisions regarding outsourcing.
Tracking non-billable hours is an ideal way to learn about the time spent on marketing and business development activities. It may be found that it is better for a firm to outsource certain operations such as website design, search engine optimization and internet marketing.
To sustain business momentum, attempts should be made by lawyers to abstain from spending working hours on activities that are non-billable nature - such as making their website more professional. Outsourcing non-billable tasks to specialist service providers can give lawyers the essential legroom to concentrate on actually practicing law.
To conclude, why is tracking time important?
Timekeeping works best when it is tended to on a daily basis by lawyers. It is critical for lawyers to develop a deeper understanding of their working hours in terms of both billable and non-billable activities. This can ensure that lawyers will be well positioned to introduce strategies that can save time and optimize the services of their law firm.
The various stages of the billing cycle can give rise to apprehensions about invoice non-realization and non-compliance. By using state-of-the art legal billing solutions, lawyers can be assured that their invoices will experience minimal client pushback, and they will have access to faster payments and realizations.