Reducing the burden of keeping track of time

While the findings of the annual Cost of Time survey should be on the agenda at all partners’ meetings this month, consideration to investing in electronic time recording could be an option to hone profitability while long term strategies come to fruition.

Traditional manual time recording methods have familiar problems such as incorrect recording, lost time sheets, fee earners who have forgotten how much time they spent on a matter or possibly not having recorded any time at all.

Electronic time recording and billing applications work to limit the possibility of human error, providing an effective and convenient means of recording time and billing clients accurately, according to Margaret Buchanan, TFB Branch Manager (Scotland).

To demonstrate the potential benefits of fee earning software, she offers the following example:

“Firstly, assume a fee earner’s rate of £100 per hour. Using a time recording product, she might save at least an hour a day by recording time automatically through her PC, rather than filling out manual time sheets. Subsequently, she saves £100 per day / £500 per week for the firm. If the firm had 10 fee earners, working in a similar nature for the same fee, the firm could save a total of £5,000 per week / £20,000 per month, which could otherwise be earned for time spent working on client matters.

Secondly, accurate time recording using the appropriate software, could account for an extra hour or more that is spent on a client matter, which a fee earner has forgotten to include on his time sheet or that was calculated incorrectly.”

Additionally, fee earner software provides the flexibility for conducting analyses of how and where fee earner time is spent, which can help establish targets and allocate resources.

If it all sounds too good to be true and too much of a quick fix for the falling profits encountered by many firms, then Colin Kennedy, Managing Director of Solicitec Scotland Ltd, offers some words of caution.

“The key to successfully delivering systems that both maximise the fee earner’s time as well as record that time accurately against the correct case and work type, is to make the process as unobtrusive as possible. Where fee-earner productivity systems and time recording systems have been unsuccessful is when the use of the system is seen as an additional task. Modern systems worth their salt come at the issue from a different angle – make the system central to doing the work and capture the time in the background.

“This way the fee-earner’s time is used to its full potential and the firm is able to bill (and cost) accurately as the system has built up an accurate picture of the time spent on each case automatically, without the fee earners actually having to manually record any time themselves. We as suppliers of legal IT systems should be able to deliver software that can accurately cater for the firm’s business processes, record all the time spent on each case against defined work types and produce bills automatically based on the firm’s business rules.

If this happens whilst allowing fee earners to earn fees and not be bogged down with administrative tasks or recording time, lawyers will maximise both their revenues and their profits.”

Key to any good system is getting the so-called “cash trail” as efficient as possible, says Brian Douglas of Aim Professional Systems.

“The profitability of a law firm is directly linked to the amount of staff time it can recover from direct client work, this not only includes direct fee-earner time but also the time spent by support staff like secretaries.  Therefore it is vital that time spent on client activity is effectively recorded.

“Fee-earners do not like completing timesheets. This is a fact of life in many firms that is difficult to overcome. Invariably, fee-earners will leave their time recording until the end of the working day, or worse still, the end of the working week. As fee-earners look to account for the requisite number of hours for that day or week, it is inevitable that inaccuracy and ‘admin padding’ will creep in.  This is when the fee-earner can no longer recall exactly what they did and in order to complete their timesheet, assigns the unaccounted number of hours to administration or another non-chargeable account.  It is estimated that time lost to ‘admin padding’ can be up to 10% per fee-earner.  Therefore a time recording system that actively encourages fee-earners to accurately account for their time during the working day is essential, it should make it an easier and more rewarding experience.

“The system needs to be flexible and should accommodate chargeable and non-chargeable activity so that the fee-earner is able to account for all of their time.

“In our experience, the introduction of our time recording solution in clients typically results in a 10-15% increase in billable time.”

The billing process should be integrated with time recording so that the bill is constructed from actual time entries and time attendance notes can be picked up and included in the bill if necessary.

“With fee-earners accurately recording time and expenses, and now able to record detailed notes against each time entry, they are in a position to readily identify time spent on activities not budgeted

for or agreed with the client.  With this type of information to hand, additional fees can be recovered from clients, where appropriate.

“For the larger law firm, following the Clifford Chance episode last year when a leaked memo alleged potential overcharging, they are likely to have to increasingly justify their bills to clients.  Clients are likely to demand greater transparency in their bills; the days of issuing a large bill with little or no back-up to justify the fee are gone, customers are going to expect 10 pages of notes explaining the timesheets with every bill,” said Brian Douglas.

Modern practice management systems should be designed to “enable fee earners to reap maximum benefit from the firm’s technology with the minimum amount of effort”, says Heidi Simpson of  Elite Information Systems.

“Modern systems can satisfy both these requirements providing the perfect personalised ‘fee earner desktop’, based on browser technology which allows them to access client and matter enquiries, contacts information and data from the firm’s record centre, record time, draft bills online, complete workflow forms and access monthly cash flow statements on demand.”