The Friday Five
Wise lawyers know that contemporaneous timekeeping is essential to the success of any fee arrangement—and to the overall financial success of your law firm. Lawyers who reconstruct their time weekly tend to lose 25 to 30 percent of their time, and those who enter time on a monthly basis can lose as much as 55 to 70 percent.
To illustrate, assume an attorney is billing at $150 per hour and doesn’t capture 15 minutes a day. When you do the math over the course of a year, that one attorney could lose as much as $9,000 a year in billable time—and a firm with 25 attorneys could lose as much as $225,000 in billable time and potential fees. That is a significant number to any law firm.
You Know the Type
Despite statistics that illustrate the impact lost time has on a firm’s bottom line, law firms continue to have chronic offenders. To paint the proper landscape, there are four types of timekeepers:
- “A” students. These timekeepers are always ahead of the curve by entering their time daily and are low maintenance.
- Need a kick. These timekeepers generally have 90 percent or better of their time entered each week, but require more frequent prompting and some maintenance.
- Special friends. These timekeepers are usually missing several days of time at any given point and require constant follow-up.
- Own worst enemy. These timekeepers are clearly working the hours, but—for whatever reason—do not always record all of their time. Since they have concerns that supervising attorneys will think the time entered is excessive, they often record less billable time just to stay off the radar.
Everyone Can Be an “A” Student
Getting to the honor roll for contemporaneous timekeeping can be a slow and methodical process. Here are five tips to ease the way.
- Start slow. Make a commitment to enter your time in small increments throughout the day. From the moment you arrive in the office, use a clipboard with a timesheet or go the system-savvy route and use a timer. Most time-and-billing software packages and apps have timers to facilitate time entry. Commit to recording your time every 15 minutes or every time you switch tasks. Incremental steps will help get you into the habit. Whether handwritten and entered in the system by your support staff, or by direct entry (the preferred method), this is a step in the right direction.
- Try, try again. If you forget to record some of your time on a particular day, don’t give up because you “blew it.” Just start recording time again as soon as you realize you fell short. Timekeeping will be more accurate if you have to re-create just a few hours, rather than a few hours plus the rest of the day.
- Set up reminders. As ridiculous as this may sound, place a sticky note on the inside of your office door, on your computer screen, on your phone, or even on the steering wheel of your car as a reminder to keep recording your time. I know of one firm that went to the extreme of placing time entry reminders in each of its restrooms to make the point. You will find things go much more smoothly if you set up your own reminders, rather than wait for the “time cops” to knock on your door.
- Inspire to aspire. When you don’t track your time and have to reconstruct it, take note of how long that takes you. Remember, reconstructing your time is not only likely to be inaccurate (capture rate significantly decreases with time), but it will take more time to reconstruct than to actually enter it in steps. Some lawyers try to re-create their time by reviewing emails. As methodical as that may seem, you are not capturing all of your time this way. Also, whenever you must reconstruct your time, it means you are either shortchanging yourself or overcharging your client, and consequently dealing with the issues surrounding both scenarios.
- Keep telling yourself there is a reason. Yes, many view time entry as “an administrative task that gets us paid.” Once in a while, remind yourself of the connection between the accuracy of your time and the firm’s ability to generate timely billing and receive timely collections. Firms that keep contemporaneous time tend to generate 25 to 40 percent higher revenues than firms that do not keep contemporaneous time. This is a real incentive to improve!
Frederick J. Esposito, Jr. is Chief Financial Officer for Rivkin Radler. He has more than 20 years of law and accounting firm experience. He writes and speaks extensively on legal management topics, including billing, collections, financial and profitability models, risk management, human resource development, project management and alternative fee arrangements. Follow him @lawmgtguru.
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