Track Billable Hours Accurately: A Guide
Accurate time tracking is crucial for all law firms. Not only for the financial health of the practice, but to gain an understanding of how the firm is working. Where is time being spent? How much of the time is billable versus non-billable? Understanding how time is spent is the first step to gain insight as to efficiency, too. To break it down even further, for law firms with more than one member, insight as to each person's productivity is key, too.
It's important for law firms of all sizes to track time accurately and effectively. Below are a few strategies your law firm can use to ensure that billable are being tracked to the utmost accuracy.
Why Accurate Time Tracking Matters
Financial Health
Ensuring every billable minute is recorded directly impacts the firm’s revenue. It helps the firm develop a budget and determine if other resources are needed in order to function to the best of its ability. More often than not, law firms tend to under report hours.
Client Trust
Transparent billing builds client confidence and reduces disputes. If clients are wary, a law firm's reputation can be seriously damaged and their business affected. Establishing trust is a key factor in both keep existing clients and attracting new ones, and being transparent in billing is one of the best ways to do so.
Compliance
Staying compliant with legal billing ethics and trust accounting rules, if applicable, is a must for all law firms. Keeping accurate records of billable time is crucial to ensure compliance. The last thing a law firm needs is to cross the very justice system it operates within, and law firm with legal trouble isn't an attractive image to potential clients.
Common Pitfalls in Tracking Billable Hours
Relying on Memory
Waiting until the end of the day to log hours often leads to forgotten tasks. Do not let this happen! Simply relying on one's own memory isn't enough. You could remember things incorrectly or out of order. Additionally, the more you have to remember the more likely you'll forget something.
Manual Timekeeping
Using spreadsheets or paper logs increases the risk of errors because they require human input. Even if everything is accounted for, it's always possible someone could write or type the wrong number in the wrong spot, therefore producing an inaccurate account. Ironically the only thing reliable about human beings is the fact that we make mistakes. Minimizing chances for error is a key factor in bolstering time tracking accuracy.
Underestimating Non-Billable Time
For firms that are challenged with tracking billable time, tracking non-billable time is not fun. However, the benefit of the information learned is well worth it. Consider tracking non-billable time for a set period of time - maybe one week - to decide if it's worth continuing on. What information did tracking non-billable time provide? Even if the firm chooses to 'back into it' by simply tracking the start and stop time of each day, remove billable hours, and a high level estimate of non-billable time results. If that number isn't bothersome or seems reasonable, consider it done. However, many firms are surprised to see the amount of time a firm spends in non-billable activities.
Strategies for Accurate Time Tracking
Track Time in Real-Time
Using timers that run while completing each task is an effective time tracking tactic. It ensures that everything is being recorded and provides less of a chance for human error. The key is paying attention. Task switching happens in the blink of an eye. It's critical to ensuret the timer is reset for each new task. Using real-time trackers is the best option to ensure the highest accuracy - if the proper attention is set. Another great benefit? Put an end to remembering what you did the prior day.
Set Clear Billing Guidelines
Define what’s billable vs. non-billable upfront. Providing clear, consistent timekeeping practices better maximizes efficiency and productivity of both billable and non-billable hours. Consistent timekeeping practices also minimize the risk of inconsistencies between the records of different associates and staff, which can create confusion and even possibly undo the established trust between team members. Consistent timekeeping also helps a law firm's relationship with clients. It dissuades client's fears of potentially being over billed and presents the firm as being on-track and in control of its work load.
Break Tasks into Categories
For time tracking, consider streamlining the process using preset categories. Tasks like client management, meetings, research, legal writing, etc. should all be clearly defined and organized in your time tracking record. This allows you to easily view how time is being spent in each area, and provide evidence when reporting on productivity. It also allows you to easily analyze and determine where improvements in the firm's attention and efforts can be made. It also makes it easier to view the progress and growth of the firm over time.
Review and Reconcile Daily
Make it a habit to review logged hours at the end of each day. While you absolutely should log everything immediately, it never hurts to double or even triple check. The daily review minimizes the risk of errors, allowing you to catch them before they accumulate and become less manageable. It can also serve as a source of moral, as looking back on what you've done over the course of the day can provide a sense of accomplishment. Finally, reviewing your daily log can help better prepare for the next day by prioritizing the next set of tasks.
Leveraging Technology: How Case Management Software Helps
Automated Time Tracking
Tools like SimpleLaw let you start and stop timers for each matter. No need to restart the same timer due to an interruption. This further ensures accurate time tracking and is incredibly convenient. It allows you to tackle cases on your terms, being responsive to what is urgent and important throughout the day, without having to put your stellar time tracking at risk.
Integrated Billing
To maximize efficiency for the firm, tracking time in the same platform where invoices and payments are tracked streamlines the entire process. Further, any potential issues with manual entry are removed. Minimizing the risks of human error saves time and effort, and spares you the stress of whether or not something was logged accurately.
Reporting and Analytics
Case management software like SimpleLaw allows you to have both a bird's eye and on-the-ground view. The greater amount of angles you can use provides a greater chance of catching mistakes or inaccuracies. It also helps you gauge the strengths and weakness of the firm more accurately, allowing you to better align and delineate tasks to ensure increase productivity and growth in the future.
Conclusion
Using reliable and consistent time tracking methods provides small law firms with an extra safety net to catch errors and mistakes. Case management software programs like SimpleLaw are designed automate the time-tracking process. By providing a one-stop shop for billable hour tracking, case management software programs allow for consistent time tracking practices that further minimize the chances of errors. Case management software programs can provide small law firms with the tools they need to stay afloat and keep pace with larger competitors. In the highly competitive world of legal service, it can make all the difference.
