For any professional hailing from any industry, the number of hours they work on a given day is important. After all, it often forms the basis for the calculation of their salaries.
However, while in most occupations this computation is simple — summing the total hours worked and multiplying it by the per hour wage — there are several industries where it is a tad more complicated.
A career in law is a prime example of the same.
Legal personnel often work on multiple aspects of various cases in a single day, which makes determining which client should be invoiced for how much, more difficult. The billing model that the law firm uses is to be taken into consideration as well.
Also to be noted is that not every action in regards to a certain case can be clubbed under the head of “billable”. This further begs the question, what are billable hours and what aren’t?
This Article Contains:
(click on the links below to jump to a specific section)
- Billable Vs. Non-Billable Hours
- Why Is Time Tracking Hard For Lawyers?
- How To Track Billable Time?
- Top 7 Tools To Track Attorney Billable Hours
Billable Vs. Non-Billable Hours
In the legal arena, this becomes a key concern for every professional. The reason behind this being that each law firm has its own way of measuring attorney billable hours alongside its own rules as to what is counted as billable.
Generally, any activity that is done in direct relation to a client’s project is considered chargeable. This includes the research carried out for their benefit, the meetings undertaken with them or associated parties, translation services, etc.
Calculation of the accurate hours that are to be found under the invoiceable head is a vital task that is to be completed by every agency. And this summation heavily depends on three key factors:
1. The Type of Fee Structure
Whether your organization has a customized, yet fixed rate for the project or works on an hourly-rate basis — either way, you’ve got to figure out the total number of hours you’ll be spending on it.
In the case of a fixed sum, you will be able to decide on said amount only after you can predict the time you may have to spend on the assignment. Even if your company’s policy states that all activity after signing a client is billable, it is still necessary to find out the actual billable rate and effective time utilization.
However, if you work on an hourly-rate-based invoice system, you need to specifically mention to the client all the activities that will be billed for.
2. Agreement over Invoice Specifics
Listing out and agreeing over the specific acts that you will be charging for holds more value when you’re working on a per-hour basis. This is important to avoid arguments and confrontations later on over whether a certain activity should have been counted as billable or not.
Lawyers often carry out a whole range of work for their clients from being their registered agents to putting in the time to research and document various policies. Therefore, to calculate the attorney billable hours, each chargeable activity must be mentioned in the contract beforehand.
For instance, the time taken to commute to the client’s offices for a meeting can also be included in the hours since the activity is in direct relation to the project.
3. Firm’s Internal Rules
The law firm’s internal rules in respect to calculation and analysis of attorney billable hours are also equally essential when drawing an invoice. This is because, for analytical purposes, the organization may decide to record the total hours involved while invoicing only the billable ones.
These steps help in an accurate measurement of the billable rate and effective time utilization rate that can further support the company in deciding future rates.
Although, as a general rule, it is considered that every hour after the client signs the contract should be regarded as billable, and all hours before the same are to be noted as non-billable.[[[
Some more examples of what can constitute billable and non-billable activities are as follows.
- Defining the project scope and research
- Translation services
- Communication regarding the project with client
- Communication regarding the project with third-parties
- Initial pitch meetings
- Meetings after the closure of a project
- Assessment of client’s inquiry
- Preparing the offer/ proposal
- Internal administrative tasks
Actions that can be covered under both billable or non-billable, depending on the internal policies of the law firm include the following:
- Internal meetings in regards to the client
- Contract creation
- Commuting to the client offices
- Wait-time in any meeting
Why Is Time Tracking Hard For Lawyers?
Recording the time you spend on completing every activity, both billable and non-billable, is of utmost importance as it affects your income as well as performance.
- Each year, a lawyer is supposed to work a certain number of billable hours.
- There can be a daily requirement of billable hours for each employee, from senior partners to junior paralegals, that can help justify their salaries.
- Reviewing the performance of each employee in a legal firm depends on the number of hours worked as well as the number of hours they could charge for.
- Decisions regarding promotions and appraisals alongside that of additional training requirements can be taken more easily with such recorded data.
But keeping records of billed and unbilled time is far from easy. This is because as we discussed above, each attorney works on more than one client’s project or more than one project for a certain client on any given day. That means recording each activity could be more tedious than you might think.
Oftentimes, lawyers also delay this task towards the end of the day to make this time notation for each action at once, instead of doing it multiple times throughout the day.
Here, it should be noted that it often leads to underbilling the client rather than overbilling, contrary to what is generally believed.
How To Track Billable Time?
For your easy perusal, here are the different methodologies the lawyers follow to record and calculate the time spent on each project.
Be it Microsoft Excel, Apple’s Numbers app, or Google Spreadsheets, they are some of the simplest yet most effective tools for record-keeping. They are not only flexible but also manageable and easy to update routinely. While they are excessively used around the globe to maintain records of various kinds, from attendance to finances — the legal community is by no means far behind with their use of tracking time spent on each project by each employee.
All one has to do is create heads, namely Date, Task, Start Time, End Time, and Total Hours. By simply entering the corresponding data in the correct columns, all workers can create and manage their own sheets that can be shared with the administration alongside, through a link or by sending the original file itself.
Although inexpensive, it also has its fair share of issues like being prone to redundancy, a higher number of human errors, inaccuracies, and more manual administrative work.
Check this article for some examples of attorney timesheet templates that attorneys can use to keep track of time easily.
Having an application record the time taken for your actions is a step-up from having to do it oneself through sheets. Time tracking software instead is much easier to use. With a single click of a button, you can start recording the time on a particular task, and when the said task is completed, you can end the timer. The software then logs the entry into the database.
Some such tools also allow recording and sharing information such as the actions taken by the employee while on the clock, or the websites they visited during this time.
They are efficient, easy-to-use, and reasonably priced. Yet employees can sometimes perceive those tools as intrusive and privacy-invading.
Automated time trackers can be considered as a simpler version of the software approach. This is so because herein, there is no need to start or stop the timer. Such apps work in the background and record the time spent thereon on multiple activities.
Despite this ease, it also allows for many concerns to slip by. For instance, one cannot be sure whether the work being done during a certain time was in connection to the project they’re working on or of personal nature. This makes this idea less effective with a higher chance of inaccuracies. Though used by many kinds of professionals, it is not ideal for the legal community who rely on time-tracking for correct invoicing.
Top 7 Tools To Track Attorney Billable Hours
Now that we have gone through what constitutes attorney billable hours and the various approaches to measuring it, let’s look at a list of the top seven tools that can help you accurately track your chargeable time.
1. Time Doctor
With time tracking and project management, all rolled into one, Time Doctor can be quite simply considered an industry leader.
It lets you accurately monitor the time to ensure correct invoicing and is easy to use on the device of your choice (desktop, tablet, mobile). You have the option to manually edit time in case you made an error in recording, making this software a go-to time tracker for recording billable hours.
Its productivity analysis and idle alerts also go a long way in enhancing your work efficiency.
With 65+ integrations including Slack, Trello, Zoho, and more, you can use Time Doctor with the platforms that your attorneys are already familiar with. This results in better efficiency and improved team collaboration as you don’t have to keep switching to a separate app or tab to monitor your hours.
Time Doctor’s paid plans start at $7/user per month, and there’s also a free 14-day trial (no credit card required).
2. Time Analytics
An easy-to-use tracker for attorneys, Time Analytics helps law firms in productivity management along with keeping an eye on the quantity and quality of time being used in a certain project by the people involved. It assists the administrators in taking calls regarding the performance of an employee while also determining whether the right lawyer is working on a particular case based on their strengths and weaknesses.
Invoice assistance and reporting about each client are also some essential features that the app provides.
With a 60-day trial period, this software is free of cost for up to 5 users and not more than 30 clients or projects.
Although a time-tracker by essence, DeskTime allows you to keep an eye on more than just the time taken on each activity by every lawyer on the team. It helps you plan a schedule for the professionals while taking into account their productivity and strengths and managing their future absences.
Featuring a private time option, project tracking, cost calculation, and the preparation of invoices and custom reports, this application is available for a 14-day trial period.
With the option of creating your own ‘Client—Project—Task’ scope, actiTime is a flexible time tracker that can be used via a browser, Android, and iOS apps, remotely as well as on-premises software. It helps you create and assign tasks with estimated time deadlines, analyze performance, and write reports alongside carrying out billing activities.
Additionally, you can track time offline and sync it later with the software, make time entries manually, and even review your own record. Using actiTime integrations with QuickBooks, API, and more, many of these time-tracking and invoicing actions can be automated too. With a 30-day trial period, it is available free-of-cost for up to 3 users, but with limited functionality.
An amazing automated time-tracking software that runs in the background without the hassle of toggling anything, Chrometa is an equivalent of a one-stop solution for the time-tracking needs of every law firm. It helps by automatically allocating the time (hours) to different projects as well as contact information. It also assists by letting them keep an eye on their budgets and time taken on every project to improve productivity and minimize any additional operational or administrative costs.
Integration with over 50 applications is its USP, and it offers a 30-day free trial.
With comprehensive DCAA Compliance, AccountSight is one of the best time-tracking and billing software available in the market for legal professionals. The tool is available on both Android and iOS, and is an intuitive and convenient time and expense tracker with flexible invoicing options. With valuable project estimates and easy integrations, it is a go-to for many personnel in the legal community.
It also offers a 30-day trial and 4 different pricing plans to choose from, depending on your requirements.
Although automated, Timely helps you record the time spent on each client and each project separately. To ensure the same, however, it monitors all your desktop activity, actions on the internet, calls on your cell phone, as well as your GPS location, which it later syncs to present a consolidated report. While it facilitates team and project planning functions, its integrations with apps like Trello, Toggl, and other accounting software helps in creating detailed time logs and bills.
It comes with a 14-day free trial period.
Accurate time tracking is a priority for both personal and professional reasons.
And now that you have the list of top tools at your fingertips, why not try them out to find one that suits your needs?
Gaurav Belani is a senior SEO and content marketing analyst at Growfusely, a content marketing agency that specialises in content and data-driven SEO. With more than seven years of experience in digital marketing, his articles have been featured on popular online publications related to EdTech, Business, Startups, and many more.