Posts Tagged time tracking
At a recent event sponsored by the New York State Academy of Trial Lawyers and the Brooklyn Bar Association, a room of 150+ attorneys was informally polled about tracking their time. Two, yes 2, attorneys volunteered that their firms make them track their time regularly. To be fair, personal injury firms comprised much of the attendance and the prevailing belief seems to be “we don’t invoice our clients so we don’t need to track our time.” The rest of the room echoed the sentiment about not sending invoices or simply said it’s too big a hassle.
For all you administrators out there, or you legal marketers who get involved in the billing process, this is your moment to step in and right the ship. I was pleased when, at the same event, a former NYS Supreme Court Justice (and practicing attorney of 30+ years) stepped up to the podium after the informal poll and told every firm that didn’t track time daily, yes, daily, they were wasting time and money by not tracking. Talk about needing a great buzz word here like, paradigm shift!
For personal injury attorneys, this is not an issue of Quantum Meruit but it is an issue of being able to illustrate that you have been responsive.
An idea with even more impact for personal injury firms is knowing if and when to settle. For example, if a firm anticipates a $1 million settlement with 30% contingent fee, it would be smart to know when your firm’s resources are trending over the expected income of $300,000. For some firms, no such tracking takes place.
For other law firms (non-personal injury), tracking time, or the lack thereof, is an enormous issue that directly impacts the bottom line. My company works with a number of large and small firms across North America and few are immune to this issue. Some firms reward for good time-entry behavior while others impose punitive measures for offenders, but in nearly all cases, the common thread is the lack of alignment at various levels within firms about why it’s important to enter time, what it really impacts, and what the corporate policy actually mandates.
In my professional services (consulting) company, we enter time daily (with 50+ consultants). Yesterday’s time must be entered by 10:00 am the following business day. As a result, we can evaluate the health, revenue, and profitability on any project every single day and change our operating model if needed. Further, our invoices are regular and relatively small (clients are billed daily, weekly, bi-weekly, monthly, quarterly, or annually). The result across 13+ years? We collect over 99.9% of our receivables. So, is it too big a hassle to enter time daily? No, absolutely not, and no way!
We have some clients who mandate monthly time entry, and invariably two things happen. First, no human being can tell you with great accuracy what she or he did for the last month, especially when you’re multitasking day-to-day. Second, not every client gets included in that month’s time (really the result of issue #1), but the real problem is that they will get included at some point, and then they’ll receive a gasp-inducing bill that should have come their way in two or three separate periods. The result is angry, alienated clients who argue about fees and make it difficult for law firms to collect.
If you’re providing valuable service, track your time. If you’re not entering your time, invoices can’t go out. If invoices don’t go out regularly, you will hurt your client relationships with mismanaged expectations and you will hurt yourself with declining revenue. Track your time, and track it daily.