September 26, 2006
Reducing the Billable Time Leakage in Law Firms
Regardless of how you bill (hourly, contingent or fixed price), you need to know the invested time to measure profitability. Most firms measure relative profitability as “realization”. Overall realization is the percent collected divided by the value of the hours worked at standard value.
One of the problems, however, is that some of the time invested on a case or matter is never captured. That is leakage—time worked but not reported. It happens most frequently in firms that allow legal professionals to track and report time after the fact. Some studies indicate that leakage is as high as 40 percent when timekeepers are reconstructing how they spend their time at the end of a week, for example. It stands to reason that those smaller slices of time worked will be lost to an imperfect memory.
Increased fee earner productivity for many firms is as simple as switching from after-the-fact time reporting to tracking time as worked. You can kick that up a notch with PDA devices like the BlackBerry® to provide your mobile professionals with anytime/anywhere capability. Time tracking software can also turn e-mail and phone messages into time entries with a simple click.
Check with your business software vendor for their time capturing options. There are some generic products that can be used across a number of time and billing systems. One of those is Carpe Diem from Sage Software. Another is DTE from Advanced Productivity Software, Inc. However, before you go the generic route, check with your time and billing software vendor to find out what options they offer for time tracking as you work. The law firm business software suite from Juris Inc., for example, includes the MyJuris option for the legal professional. MyJuris not only equips the timekeeper for anytime/anywhere time recording, it provides continuous reporting back to the firm’s main Juris system, providing managing partners and practice heads with current-to-moment information on billable and non-billable activity including both completed and in-process work. It uses dashboard technology to provide information that is both actionable and instantly digestible. The MyJuris option goes even further to improve law firm realization; time entries are automatically audited against engagement rules with feedback to the attorney. This eliminates rework. It also reduces client-initiated adjustments and eliminates rejected bills. Keeping current with time and expense activity coupled with engagement rule auditing means bills get out the door faster and money gets in the bank sooner. Faster billing and collections also reduces adjustments and bad debts. It all adds up to more partner income! For more information about MyJuris download the 6 page product brochure (PDF) available from Juris, Inc.
Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.
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Filed under Technology by Tom Collins