All legal firms seek to provide quality services to their clientele. But inaccurately determining the number of hours you work on projects can hurt your company's bottom line. It's important to understand that your firm or office may still use resources, even when not interacting with clients directly. Therefore, knowing when your organization is using resources is vital. Tools like a free lawyer billable hours calculator will help ensure that your firm is reaching its potential.
Calculating your firm's hours should be a priority. Below, we will explore the importance of tracking billable hours, lawyer time tracking tips, and some lawyer time tracker software.
What Are Billable Hours for Lawyers?
A billable hour is an hour you spend putting work into a legal project that you can charge your client for. The monetary rate at which attorney work hours for lawyers are charged is negotiated with the client beforehand.
Billable hours target the amount that attorneys can charge clients. The hours that are considered ‘billable’ are those that generate revenue for the business through work.
Some of the most common examples of activities that are billable to clients include:
- Planning legal strategies
- Remote meetings
- Drafting and filing required documentation
- Gathering relevant evidence
- Conducting research
- Correspondence with clients or other communication related to cases
- Any miscellaneous work related to a legal project
Put simply, you can charge for billable hours any time you are working on a case in which a client is paying you hourly. Therefore, if you fail to record billable hours accurately, your practice leaves money on the table.
Typically, after the conclusion of a case, attorneys will find the total of hours spent working for a client. That number is then multiplied by the agreed-upon hourly rate to determine the amount you will invoice to the client. With the help of an attorney billable hours calculator, you can guarantee that you are charging for the total value of your services.
What Is a Non-Billable Hour?
Not every hour of work that attorneys do qualifies as billable. This is important since non-billable hours cannot be charged to a specific client. Non-billable hours may include work dedicated to building your client base or promoting your business.
Some of the most typical tasks that result in non-billable hours for attorneys include:
- Marketing your office or firm
- Handling internal communications
- Professional development hours
- Meetings with your staff and co-workers
- Handling issues related to the business structure
- Administrative tasks
- Drafting or presenting business strategy proposals
- Activities to get legal clients
Although they are not billable, these activities are critical to the success of a legal practice. Both billable and non-billable hours are a precious resource for any growing business, but it is crucial to track billable hours. Wrongfully charging a client or missing the opportunity to increase your revenue are both drastic missteps for your firm.
What Are the Benefits of Tracking Billable Hours for Attorneys?
Accurately calculating lawyer average billable hours guarantees that your working hours result in the appropriate revenue. Beyond ensuring adequate payment, tracking your hours will give you a clearer picture of your firm's efficiency.
Using an attorney billable time calculator can reveal the following information about your practice:
- Hours and resources you spend on specific projects or cases
- Profits and losses related to specific tasks
- Productivity and professional performance measures
- Data to build more accurate estimates for clients
- Where and how resources should be expended
- Effective tactics to ensure efficiency
- Areas for improvement in quality or consistency
These are only a few clearest advantages for calculating attorney billable hours. By using an online billable hours calculator, you can help your legal practice thrive.
As you can see, optimizing billable hours can significantly change your law firm profits - watch our podcast with Ryan Kimler to learn more.
How to Calculate Law Firm Billable Hours
Even if you understand the importance of accurately tracking your company's work, you may be unsure how to correctly calculate billable hours for lawyers.
To accurately calculate billing hours for your office or firm, it's essential to follow a strict procedure:
- Determine the appropriate hourly rate
- Record the lawyer working hours related to a project
- Keep a record of the non-billable hours during that period
- Total the billable hours after the conclusion of the case
- Multiply the hourly rate by the number of billable hours
- Add relevant taxes to this total
- Account for any associated or applicable fees
- Draft an invoice for the client
Tracking your hours will help you determine strategies to increase profitability in future cases and projects. As such, choosing attorney work hours for specific jobs is a crucial part of running an effective legal practice or law firm.
Calculating Attorney Billable Hours With a Chart
A billable hours chart can provide an overview of all the tasks that need to be addressed and how long each should take. This allows attorneys to quickly see how much time they are spending on a given case and ensure they are staying within their client's budget and are not being overcharged for any services.
You can use a billable hours chart to calculate whether attorneys meet billable hours targets at a glance. However, it might be difficult for rookie attorneys or legal clerks to understand that most law firms bill in six-minute increments (or one-tenth of an hour).
The table below shows what a chart for calculating billable hours looks like.
Examples of How to Use AN Attorney Billable Hours Chart
We will give two instances of using both billable hours, as shown in the table above.
- If you spend 38 minutes preparing legal paperwork, simply trace the column for 'Time Spent (Minutes)' down until you reach the period that contains 37 minutes. So that's the row with 37-42 minutes. Then, follow that row across to obtain 0.7. So you'll bill 0.7 hours for the time you spent writing.
- If you spend 2 hours and 30 minutes interviewing your clients to get their side of the story and develop a draft to work with, you'll bill 2.5. That's 2.0 for two hours and 0.5 for 30 minutes (half an hour).
Building Billable Chart Hours in Excel
Excel is another good billable hours law firm tool used to track and manage billable chart hours. You can easily track how long they spend on specific tasks, such as research, interviews, writing legal documents, and appearing in court. With its easy-to-use spreadsheet format, Excel makes it simple to record and analyze data related to the amount of time spent on each task or project. It is suitable for multiple clients or projects.
Additionally, Excel's graphing capabilities enable users to visualize their data in order to identify trends and uncover insights. You may automatically calculate the sum of all your input with the help of built-in functions, eliminating the need for manual computation.
To get started,
- Open up a new Excel workbook and enter the data for your projects, including dates, client or project name, hours, hourly rate, and total and additional data.
- Use the built-in features of Excel, such as sorting and filtering, to quickly view the data and make adjustments as needed.
- Create billable hours chart and graph to visualize your progress once you have entered all the project data. With these visuals, you can more easily spot any problem areas or opportunities for improvement.
Attorney Billable Hours Calculators and Software
While identifying billable time is usually straightforward, accurately tracking and invoicing those hours is challenging. Thankfully, many kinds of software can assist you in keeping track of your practice's billable hours.
Asana is a software application that enables teams to monitor, manage, and organize their tasks. It integrates with various business-related applications, creating a functional hub for your cases. Asana has several features that make it an excellent alternative for any lawyer searching for a tool to calculate billable hours.
Some of the features that make Asana a great choice for attorneys include the following:
- The ability to create and manage projects
- A variety of templates to help you get started
- The ability to assign tasks to team members
- The ability to track billable hours
- The ability to generate invoices
Asana Billable Hours Tips and Trick or Best Practices
- Take advantage of 'My Tasks.' It is your go-to location for managing projects. Asana displays which tasks have been assigned to you and their due dates. You may organize tasks by priority—Today, Next Week, or Later.
- Don't forget to utilize the Asana mobile app, especially on the go. Mobile phones allow you to access tasks immediately or check and approve your team's progress.
- Asana allows you to @mention, not just an individual but also projects and tasks, allowing you to link them to whatever you need. You can, for example, @Jane, a personal injury lawyer, in a comment left under a completed project.
- Split your employees into smaller groups. A large firm or team that uses Asana for workflow management may get overwhelmed with tasks. So, using Asana to divide and create smaller teams can increase efficiency. This is a tip for individuals in charge of large teams or the legal firm.
- Utilize Asana integrations; the team should understand how they work. You may integrate Asana with time-tracking software to track the time spent on projects and individual tasks. This saves you time leaving the app to access them when you can just as easily access them on Asana.
QuickBooks Time—previously known as TSheets—is another great option for attorneys. It allows employees to integrate. It is simple to use and offers several features specific to the legal industry. For example, QuickBooks Time can track your time spent in court, on the phone, or in meetings. It can automatically generate invoices based on your time records.
Additionally, QuickBooks Time integrates with several popular accounting software programs to easily track your invoices and payrolls. This makes billing and tracking your time a breeze, so you can focus on what's important—your clients.
QuickBook Time Billable Hours Tips and Trick or Best Practices
- Divide attorneys’ bookkeeping periodically—weekly, monthly, and quarterly—to accurately organize invoices.
- Set up automatic late invoice reminders. Send reminders for overdue invoices using QBO's automation. Not only will you save time not sending out reminders manually, but these automated reminders may also hasten the payment process.
- Use Gmail to send invoices. You may invoice your customers with the QuickBooks Invoicing for Gmail app, and every invoice is synchronized with your QuickBooks account.
- Integrations are essential. With integrations for more than 650 business tools, you can effortlessly sync the operations of your legal practice. Bill payment, personnel management, invoicing, time tracking, analytics, inventory monitoring, and other popular apps are among those offered by QBO.
Due Time Tracking
Due software was created to help freelancers and firms precisely evaluate how long it takes to execute project work for clients. Additionally, it offers team managers insight into how team members utilize their time and ensures that labor laws are followed.
Due Billable Hours Tips and Trick or Best Practices
Attract and connect with a larger target audience by extending your payment options to online credit card processing. This is particularly crucial if most of your legal business is conducted online or you work as a freelance attorney. You will have a greater chance of increasing sales and converting more leads.
Lawyers and clients want to complete the task of paying an invoice quickly so they may focus on other matters. According to research, using credit cards speeds up the bill payment process by up to 11 days.
Time Analytics is an excellent solution for attorneys since it is mainly built to track efficiency. This legal practice management software is simple to use and includes several features that assist attorneys in preparing detailed timesheets. You may also use it to keep track of your lawyer's billable hours and enhance the profitability of your project by reducing unproductive hours using the timesheets.
Time Analytics Billable Hours Tips and Trick or Best Practices
- Gain insights into your company's value-driven key performance indicators (KPIs) using the dashboard. Keep track of your time usage, billable hours for each project, how much time is spent on each task, lawyer output, client profitability, the accuracy of your invoices, and more.
- Create and make use of timesheet tracking. Timesheets that are submitted regularly keep track of billable and non-chargeable hours for each lawyer, task, project, client, etc. You may obtain detailed timesheets and keep track of attorneys' working hours.
- The invoicing assistant should not be overlooked. Using accurate statistics and time utilization, Time Analytics creates data for bills.
- Obtain a project-by-project cost tracking summary. All costs generated by the timesheet calculator are immediately assigned to projects and clients. You will be able to determine the entire cost of each project and client, the gross or operational profit per engagement, and more with the help of this tool.
ClickUp is well-known for its project management abilities but does not limit its capabilities. It allows you to view your billable hours law firm data. The software makes it easy to see how many hours an attorney has worked on a case and how much time you have left. This way, you can accurately estimate how much your case will cost.
Most importantly, ClickUp integrates with your existing law practice management software. This way, you can keep all of your data in one place. Plus, you can customize reports to meet your specific billable hour requirements.
ClickUp Billable Hours Tips and Trick or Best Practices
- Understand the ClickUp hierarchy to help you manage and streamline your law firm's operations and save your team from getting lost in your workspace. The ClickUp hierarchy is: Workspace > Spaces > Folder > Lists > Tasks > Subtasks > Nested Subtasks.
- Divide the tasks among the teams in the law firm. This allows each employee to locate and work on their task quickly.
- Use the progress bar to specify how far along you are with the task or project. The bar can be adjusted from 0-100.
- Don’t forget the time tracker at the start of each work day, and turn it off at the end.
- Integrate with other apps to get additional functionalities.
Saviom makes it simple to add lawyer and client information, set rates, and record time logs. It is an intuitive web-based software. You can quickly set up your billing system and begin tracking your time.
With Saviom’s software, you can quickly and easily generate invoices, analyze financial performance, and ensure you are getting paid for all your work hours. The software makes it easy to manage workflows, set billing rates, and ensure compliance with your firm’s billing policies.
Saviom Billable Hours Tips and Trick or Best Practices
- Use the real-time resource scheduler with the most configuration options. With simple drag-and-drop and resource assignments, enable real-time or agile scheduling at the project or task level.
- The right resource should be scheduled correctly to minimize under or over-skilled resources and lower project costs.
- Get foresight with the sophisticated forecasting platform demonstrating capacity planning for labor optimization. With the built-in analytics tool, obtain a general overview of the project’s income, cost, margins, etc.
- The matrix structure makes project management simple—view data from several perspectives, such as location, roles, domains, and business. Billable hours should be organized by resource role, team, project type, location, and skill set.
- For simple data import and export, integrate with any of your current systems.
Features to Look for When Choosing Billable Hours Software
When choosing billable hours software, you should consider your type of business, your business needs, the app’s usability, simplicity, budget, and features.
There are some key features to consider.
- A user-friendly interface that is reliable and secure.
- A system that allows you to track time accurately, with customizable input options and easy-to-read reports.
- The software offers customer service support if you have questions or need help using the program.
- The ability to manage multiple projects at once and assign tasks to specific individuals or teams.
- Automated reminders and notifications can help ensure deadlines are met and invoices are sent out on time.
- A solution that integrates with other software platforms, such as payroll or accounting systems, so all your data is in one place.
How to Increase Attorney Billable Hours: Best Practice
This article section will give you an idea of how to increase lawyer billable hour targets to maximize efficiency.
Establish a ‘Billable Hour’ Policy
In many law firms, attorneys are expected to bill a certain number of hours daily, weekly, or monthly. However, this can often be difficult to achieve, as there are only so many hours in a day. One way to increase billable hours is to establish a ‘billable hour’ policy.
Under this policy, attorneys would be expected to track their time in increments of 15 minutes (or whatever the firm deems appropriate). They would then bill for those increments, even if they only worked for a few minutes. For example, if an attorney tracked their time and saw that they worked on a particular project for 20 minutes, they would bill for 30 minutes.
This policy would likely result in increased billable hours for attorneys, who would be incentivized to work more efficiently.
One Thing at a Time
Problems arise when attorneys or staff members are hyper-focused on a particular project. This is a normal part of any workflow and is to be expected.
However, it is important to avoid these employees flooding their supervisors with questions and requests. Too much time spent answering questions can lead to dips in productivity.
Also, supervisors may be unable to respond promptly. This can lead to project timelines being stretched unreasonably. It is important to avoid this delay to provide clients with high-quality legal representation.
One important strategy for minimizing this type of issue is to allow employees to submit queries and issues early in the workday. Set a specific time for the submission of problems or challenges.
Upper-level employees can then address each problem on their own. Taking one thing at a time will ensure that your team is working as efficiently as possible.
Have you noticed that your firm's non-billable hours are too high and your billable hours are too low? If this happens, it is important to investigate how much time you or your employees spend on low-value jobs and tasks.
In addition to unproductive priorities, distractions and procrastination can cost you dearly. It is critical to remove any potential distractions from the workplace. This is especially true during hours that should be billable.
Staying focused on the important activities that bring in revenue is critical. Working in teams can also help reduce procrastination since individuals are much more susceptible to distractions.
Keep Track in Real-Time
Do not attempt to determine attorney billable hours only in the aftermath of a project's conclusion. In other words, track your billable and non-billable hours as they happen.
After time passes, it can become challenging to remember what happened during specific work hours. And whether the task was billable to a client—attempting to rely on memory days or weeks after the fact can result in inaccuracies.
This may cause incorrect invoices. It may also result in your firm missing out on valuable revenue.
Perform Billable Hours Audit
As any law firm knows, billable hours are the bread and butter of the operation. If attorneys aren't billing hours, the firm isn't making money. That's why it's important to ensure that every billable hour is documented correctly and accounted for.
Go through the documentation for a certain period of time and ensure that all of the hours billed are accurate. This can be time-consuming, but it's well worth it in the end.
If you find that there are discrepancies in the billable hours, you can take steps to correct them. This might involve training attorneys on how to document their time better or changing how the firm tracks billable hours.
Provide Detailed Reports
When billing your clients, it is vital to write full descriptions of your legal services. In the law context, providing detailed billing descriptions is especially important.
Failing to provide clients with a clear description of why they are being charged could result in disputes. Billing and invoice disputes cause your business to waste valuable time and evident frustrations and inconveniences.
Ensuring that your billing descriptions are complete and thorough will decrease client complaints. For example, suppose you spent an hour on a phone call with a client. Many attorneys would include the description of ‘one-hour phone call’ on the client's invoice. Instead, provide a brief description of the content and importance of the call.
This will ensure unreasonable client disputes occur less frequently, saving you time. Detailed billing reports also ensure you recover money for all calculated billable hours.
Tracking Non-Billable Hours as Well
It is important to keep a record of your firm's billable hours. This is how you ensure that your revenue genuinely reflects your employees' work.
However, it is also crucial to monitor your non-billable hours. Non-billable activities can drastically decrease your billable work hours.
Tracking these tasks will help you to find non-billable activities that can be automated or delegated more productively. As such, monitoring your firm's number of non-billable work hours can ensure you are as profitable as possible.
Increasing the total billable hours each day or week is vital. You should use billable hours for necessary tasks and projects.
Automate Non-Billable Work if Possible
Your firm or practice can increase your revenue drastically by automating some non-billable workflows. Tracking your billable hours and task management are two important elements of automation.
Automating many non-billable jobs in your law practice allows you to increase your total number of billable hours. It is much more useful to spend an hour on a client's case rather than spend that same time manually completing job duties.
Using billing hours calculators is a useful way to decrease your non-billable work and increase the accuracy of your invoices and billing. Many digital timers can be integrated into other business-related software. This helps to streamline your workflow.
Tracking Billable Hours
As you can see, tracking your billable hours lawyer data in running a law firm is essential. Providing high-quality legal services to your clients is only possible if the other elements of your firm are handled.
Wasting time on non-billable work can decrease your income stream. This type of time waste can also cause delays and client disputes.
Monitoring your employees' time to complete essential job functions will also help you increase efficiency and productivity. A free online billable hour calculator allows you to find areas for improvement in your company's workflow.
To build your client base and secure future business, consulting with a high-performance law firm digital marketing agency is critical. For more strategies to increase your revenue and decrease waste, contact the specialists at Grow Law Firm.