November 28, 2007
Irony, Incent and the Case for Contemporaneous Timekeeping by Attorneys
Speaking of irony, one of the most timeless of topics revolves around time. Time and expertise are all an attorney has to sell, whether it be in current expertise (litigating a matter) or in transferring it into a workable and reusable template (transactional forms). Valuation of that expertise is determined by the time it takes to perform a task. The fact that some attorneys consider timekeeping anathema further feeds fodder to irony.
You can’t accurately place a value on a task without recording the time it takes to do it. You can't accurately place a value of an hour's work without recording the time you spend working.
For law firms of any size, discussing the importance of recording billable work timely can quickly become circular. For example, some attorneys use the excuse that recording time costs them money since it takes time away from them doing billable work. Of course, not recording time leaves billable work unrecorded and thus unbillable, which costs them money.
For those firms who have defied the gravitational pull of lazy timekeeping, the issue then becomes execution – how do you provide incentives for compliance? Do you implement punitive or rewarding incentives?
David Lat at Above The Law, in a post in August, posted a memo from a large firm who took the punitive route, punishing lawyers who don’t enter time daily. The relevant portion of the memo read:
Notification of non-compliance will be given to the Office of Attorney Development as well as to the leader of the delinquent timekeeper’s department or practice group. Failure to comply will impact the performance evaluation of a timekeeper and, in repeated cases, will result in a timekeeper no longer being eligible for direct deposit of his or her compensation.
One can envision an attorney first reading the above thinking back to the days in law school, all the promise, all the glory and excitement for being a champion of that which binds our civilization. Then, as he/she focuses on the memo again, the “self actualization” moment: I am a rat in a cage.
Punitive measures for non-compliance appear more like a tax in my opinion. You are taxing the timekeeper for not following your guidelines. If this method works and doesn’t affect the long-term retention of talent, then it is a good idea. However, in the above example, the firm is trading one administrative headache for another. Recording your work timely helps administration by having less to perform to get bills out - the time is in, now bill it. However, if the attorney doesn't record time within the allocated grace period, then not only does the administration get stuck with getting the attorney to record their billable work but they also get the hassle of manually processing the attorney's paycheck! The admin can't win!
There are other ways to encourage compliance. Rewarding contemporaneous timekeeping is like providing a tax cut – you give something back to timekeepers for doing what they should be doing anyway.
For example, a Juris client gives timekeepers cash if they get their time in before deadline. They spend tens of thousands of dollars a year compensating eager timekeepers yet their margins are higher than before the policy was implemented. They are making money by spending money targeted to achieve a positive result.
Another gives out candy – and reports that it works well. Some post numbers to a board or send out daily/weekly emails, ranking those timekeepers based on productivity (you don’t have to show numbers; the ranking alone is enough to expose the weak). If you don’t record your time, your number is lower regardless of how much work has been performed. Using this method, though, is based on an assumption of competitiveness. It isn’t uncommon for the chronic problem attorneys to show little care for their plight.
Any incentive must be accompanied by mentoring for those who struggle to make their numbers. Gimmics may be effective at improving the performance of those who are coachable, but the goal is to keep the cash flowing inward. You can either be punitive up front or on the back end but regardless you need to know when to show a timekeeper the door. A timekeeper that can't or won't help the firm stay profitable is a drain on resources and must be marginalized to lessen the affect it has on the producers. Otherwise you risk losing the talent that help make the firm profitable.
There are many ways to get attorneys to record time as work is performed. Set up benchmarks and measure against them to see if your methods are working. If not, change them. Management isn’t a one-time check of the pulse. It requires constant measurement and adjustment.
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Filed under Management, Policies/ Procedures by Tom Collins
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