How To Increase Billable Hours

There are only so many hours in a day and a finite period of time to work. Therefore, the questions remain: How can billable hours and productivity be increased? How can a timekeeper increase productivity? How can a timekeeper feel more confident about the billable time recorded?

To address these questions, first analyze timekeepers’ current regimen. It is imperative to understand where there are gaps, such as inaccurate recording or extensive administrative tasks that inhibit timekeepers from reaching their full revenue-generating potential. Since many lawyers bill their clients based on the number of hours worked on a client’s case, keeping accurate track of those hours is the most important step to increasing revenue.

Track Time in Real Time

So often, timekeepers submit their time at the end of the month, weeks after the actual work has been completed. This tends to lead to inaccuracies and misrepresentations. The more time that passes between when the work was done and when it was recorded, the greater the likelihood of miscalculations. One of the most accurate ways to ensure that a timekeeper is recording the most precise time is for that time to be recorded as the work is being done.

Timekeeping applications or practice management solutions with robust timekeeping features that will automatically start a timer when beginning a new task are most effective in accurate time reporting. These enable timekeepers to record time worked in real time so they are not forced to estimate. Often timekeepers will find they have underestimated how long it took to complete a project. The timeliness of recording directly affects a timekeeper’s productivity.

Make the Timekeeping Process More Efficient

When evaluating how timekeepers enter their time, limit the obstacles that make time entry difficult. First, timekeepers need to be able to record as they work. This may include creating codes for repetitive explanations that can be used instead of retyping long phrases. Time entry must be efficient so timekeepers can focus more on working rather than recording time. If timekeepers are handwriting time entries, this may in fact take longer than entering time directly into a time and legal billing application. Typically, handwritten entries will need to be typed up by another person. Additionally, timekeepers should be able to easily identify the file they are working on rather than searching for it. Finding more efficient methods of timekeeping is one of the most important steps you can take to increase billable time. Lawyers should be practicing law and not getting bogged down with cumbersome timekeeping procedures.

Analyze Reductions & Non-Billable Time

In many situations, time records are reduced or changed at the time of billing. These reductions or changes can provide important information regarding a timekeeper’s performance. After a bill is presented to a client, reductions in fees may also occur. It is very important to evaluate timekeeping by comparing worked hours to billable time. Patterns may be found that represent timekeepers’ strengths and weaknesses. This analysis can help management assign work and take advantage of the skills of individual timekeepers. Since a firm’s objective is to bill as much time as possible, time reductions represent lost income.

Evaluating non-billable time is another area that is often overlooked. Non-billable case work, performed by timekeepers, should be minimal and, when possible, delegated to a case admin or to firm administration. There should be guidelines that regulate non-billable client work and the non-billable time. Despite sound policies and guidelines, some non-billable administrative time is inevitable for timekeepers. Administrative non-billable time is often attributable to continuing education, vacation time, sick time, client development, or billing functions. This time should be entered and tracked to maintain accurate timekeeper productivity. Guidelines for administrative non-billable activities should be clearly defined to set realistic expectations.

Set Expectations

Every timekeeper should have a clear understanding of the amount of time that must be recorded during a specific period in order to ensure profitability. Billable time goals can be set by day, week, or month. These goals provide a matrix by which timekeepers can keep track of their performance. For this reason, they need to be consistently analyzed and compared with actual time recorded. Variances need to be highlighted and action plans put in place to address negative variances.

All factors that could impede timekeepers from reaching their goals need to be addressed. For instance: Does the timekeeper have a computer that is out of date? Does the timekeeper need additional training on the timekeeping process? Are timekeepers wasting time because they do not have the best tools to work in the most efficient manner? Once these goals and objectives are set, timekeepers will have a quantitative point of reference to keep them accountable.

Lastly, it is important to evaluate work in process. The timeliness of creating and sending bills is one of the most important factors in generating income promptly. Time that is not billed expeditiously is harder to collect on. Aged work in process represents lost billable time and income.

As someone who earns a living based on billable hours, I am always trying to set new goals and restructure my time so that I can be most productive. My goals are reviewed and changed periodically based on the business climate and my workload. These evaluations are an important tool to predict and control my income.

Written by CARET Legal partner, Deborah J. Schaefer. Deborah is a Certified Public Accountant in Connecticut and New York, who specializes in the selection, implementation, training, and support of computer-based accounting systems for law firms. Practicing for over 35 years, she has worked with hundreds of firms across the US and internationally.