Tracking your billable and non-billable hours is crucial for an effective legal practice. Calculating work hours helps you track efficiency as well. With the help of Grow Law Firm, you can accurately calculate billable hours.
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 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. For lawyers, Grow Law Firm can help you calculate billable hours and grow your practice.
What Are Billable Hours for Lawyers?
A billable hour is an hour that you spend putting work into a legal project that you can then charge your client for. The monetary rate at which billable hours for lawyers are charged is negotiated with the client beforehand.
The billable hours will determine the amount that clients can be charged. 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 accurately record billable hours, your practice is leaving 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 that will be invoiced to the client. With the help of an attorney billable hours calculator, you can guarantee that you are charging for the full value of your services.
What Is a Non-Billable Hour?
Not every hour of work that attorneys do qualifies as billable. This is important to know 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 work
- 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 billable hours guarantees that your working hours result in the appropriate amount of revenue. Beyond ensuring adequate payment, tracking your hours will give you a clearer picture of your firm's efficiency.
Using a lawyer billable hours 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 of the clearest advantages for calculating attorney billable hours. By using an online billable hours calculator, you can help your legal practice thrive.
How to Calculate Billable Hours
Even if you understand the importance of accurately tracking your company's work, you may be unsure about how to properly calculate billable hours for lawyers.
To accurately calculate billing hours for your office or firm, it's important 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, determining the hours that are billable on specific jobs is a crucial part of running an effective legal practice or law firm.
Attorney Billable Hours Calculators and Software
While identifying billable time is usually simple, accurately tracking and invoicing those hours is a challenge. Thankfully, many kinds of software can assist you in keeping track of your practice's billable hours.
When you are recording work hours, it's important to have access to a digital task management tool. Asana is a piece of software that allows teams to track, manage, and organize their tasks.
Asana features integrations with other business-related apps, creating a functional hub where you can handle all relevant tasks and deadlines related to your cases. Integrating other apps ensures that you will meet relevant deadlines and provide reliable legal services for your clients.
It's a powerful tool for any legal team aiming to provide premier representation. With a task management tool like Asana, you'll never lose track of an important goal, task, or date again.
Firms need to accurately track their work hours to provide their clients with reliable invoices. TSheets is a digital time tracking tool that is best in class.
With TSheets, firms can reliably track their hours in relation to client-facing work. However, this software also allows offices to determine the hours dedicated to any projects or jobs related to specific clients and their cases.
TSheets is fully customizable, and with an upgraded account, you have the option to accurately estimate the number of hours needed for specific cases or claims.
Due Time Tracking
Due Time Tracking allows businesses to keep a close watch on the billable and total hours spent on each project. Accurate billing with Due Time Tracking software helps professional teams maximize productivity.
Ensuring fair billing, reliable recording, and quick invoicing helps to build trust with clients. Some of the most useful elements of Due Time Tracking software include:
- End-to-end payment structure
- Billable and non-billable hour tracking
- Digital credit and debit card processing
- Online invoice management solutions
This valuable software allows firms to consolidate all payment and invoicing options in a single digital platform. Due Time Tracking's streamlined functionality also allows for international payments and larger transactions.
Time Analytics is a leading online billable hours tracker. It not only calculates the number of hours spent on a given project, but also determines the utilization of work hours. This helps firms decrease the number of unproductive hours.
Each task is reliably tracked, and as each portion of a project is completed, Time Tracker allows legal practices to accurately determine the cost of services.
Some of the most impressive features of the Time Analytics billable hour tracker software include:
- Tracking hours by client, project, employee, tasks, and more
- Timesheet management tools
- Profitability measurement by billable hours and cost calculation
- Transparent invoice development–helping to build client trust
- Managing overhead and labor costs by case or client
These are only a few of the invaluable tools that Time Analytics provides to legal firms for billing purposes. There are also new features being developed to improve this software; features currently in development include automated billing options and task management tools.
ClickUp is a very simple but effective digital business tool. This online software provides interfaces to manage the majority of common business-related processes.
The interface allows businesses to track their billable and non-billable work hours. ClickUp also provides legal professionals with the ability to engage in the following:
- Task and project management
- Team collaboration and communication
- Managing digital documents and paperwork
These features are all available through ClickUp's single convenient online interface. You can also oversee employee work hours, reporting, budgeting, and more.
ClickUp is available on desktop and mobile, and it also integrates many of the most common apps that businesses use. This allows for a high level of functionality and customization.
If your firm or practice has many logistical challenges, Saviom may be the right software for you. Saviom is an interface that provides you with digital tools to manage your firm's resources and plan your workforce strategy.
Managers can track billable hours on specific projects, which allows for a better understanding of your company's productivity levels, project outcomes, and workflow-to-revenue relationships.
How to Increase Billable Hours: Best Practices
One Thing at a Time
Problems arise when attorneys or staff members are hyperfocused 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 in a timely manner. This can lead to project timelines being stretched unreasonably. It is important to avoid this type of 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 submission of problems or challenges.
Upper-level employees can then address each problem on its own. Taking one thing at a time will ensure that your team is working in as efficient a manner 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 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 to cut 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 difficult 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.
Provide Detailed Reports
It is vital to write full descriptions of your legal services when billing your clients. In the context of the law, 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, in addition to the obvious 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 that unreasonable client disputes occur much less frequently, saving you time. Detailed billing reports also ensure that you recover money for all calculated billable hours.
Tracking Non-Billable Hours as Well
It is obviously important to keep a record of your firm's billable hours. This is how you ensure that your revenue is truly reflective of your employees' work.
However, it is also crucial to monitor your non-billable hours. Non-billable activities can drastically decrease your number of 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 that you are as profitable as possible.
Increasing the total billable hours in each day or week is vital. Non-billable hours should only be used 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 of the 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.
There are also time-tracking digital spreadsheets available. These can replace paper receipts and cut down on the time you spend manually drafting invoices.
Mobile app versions of this software let you use your camera to input items purchased related to projects. These automation tools let you easily track your expenses and billable hours more accurately.
Tracking Billable Hours
As you can see, it is highly important to track your attorney billable hours in the context of running a law firm. 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 the time that your employees use to complete important job functions will also help you increase efficiency and productivity. Using a free online billable hour calculator allows you to find spots for improvement in your company's workflow.
To build your client base and secure future business, it is critical to consult with a high-performance law firm digital marketing agency. For more strategies that will increase your revenue and decrease waste, make sure to contact the specialists at Grow Law Firm.