While the legal industry and legal tech industry continue to evolve, the billable hour remains the go-to method for charging for legal services. This method stems from the ethical requirement that says attorney fees must be fair and reasonable (see ABA Model Rule 1.5). It is arguable that the billable hour is the most reasonable and fair method, as each dollar a client spends directly corresponds to the exact time that a lawyer works on that client’s matter.
There’s a catch here, however. Fees tied to the billable hour are only fair if the attorney accurately reports his or her time actually spent on billable work.
Unfortunately, most attorneys do not have solid legal timekeeping practices in place. Indeed, many attorneys do not realize that some of their timekeeping efforts can actually be hindering their practices and bringing into question their ability to meet their fee-related ethical obligations.
#1: Forgetting to Track Time Contemporaneously
The biggest pitfall of legal timekeeping occurs on a daily—even hourly— basis. Most lawyers do not keep track of their time as they go. They do not have a time tracking app or even a simple legal pad and paper next to them at all times, marking down starting and stopping times by task and client. Sound familiar?
If you are one of these lawyers, this means you have to take time to think back on your day. You probably even review your calendar, emails, files on your desk and desktop, and phone logs to see what you and who you spoke with. This often leads directly into legal timekeeping trouble.
#2: Underestimating Time Spent on Billable Tasks
If you do not track on an as-you-go basis, you wind up guesstimating how much time you spent on each billable task you handled. But the further away you get from each task handles means the fuzzier you are on just how many minutes you actually spent on a call, drafting a motion or following up with an insurance adjuster. You may find yourself using a canned amount of time for calls to make it easier on yourself. But in doing so, you are likely underestimating just how much time you actually spent on those billable tasks. This also means you are likely undervaluing how much your time is actually worth.
The flipside of this is also true. You could overestimate your time, which means you’re potentially charging clients for time that you did not spend on their matter.
#3: Ignoring Time Spent on Non-Billable Tasks
Do you know how much money you make per hour? If you tracked every task you worked on every minute of every day, you would get a clear picture of how much time you are actually billing out and how much time you may be wasting on non-billable tasks. The amount of time lost here can astound you!
Don’t Let Legal Timekeeping Troubles Keep Your Law Firm From Success
If you are a lawyer who charges clients based on the billable hour method, review your own legal timekeeping methods to see if you are falling into any of the traps discussed above. Should you find that these issues are troubling you and your small law firm, take steps now to remedy the situation. Find a law practice time tracking solution that meets your needs and your budget. Failure to do so could mean failure to meet your ethical obligations as they relate to fees and fee arrangements.