Taking Control of Billable Time

By Terri Olson

Most firms have no trouble realizing that doing a better job in collecting on bills sent to clients makes for increased profit. However, few spend much if any time analyzing the money lost through work that is done, but for some reason or another never recorded or billed. However, this is actually a very common source of financial frustration for lawyers in practices both big and small. Work is being done, and in many cases even recorded, but somewhere between the point at which the attorney attends the hearing, takes the telephone call, or drafts the contract, this work vanishes -- never to be seen by the client.

Let's look at some of the common perpetrators of this offense against productivity.

The attorney who refuses to record time, even though the work is billable. In many firms, there's one lawyer who just will not hand in timesheets to the secretaries or bookkeeper to enter. He (or she) is working -- everybody can see how hard he works -- but as far as the accounting department is concerned, he's a zero producer. Nothing he does makes it to the bookkeeper, although he usually insists that he'll get around to it soon. Unfortunately, he is more likely to be a partner than an associate, and therefore it is more difficult to get him to comply.

The attorney who records time but won't let anyone bill it. This attorney is frequently a sociable creature with many community ties. He knows all of his clients, and so tells the secretary "don't worry about billing old Harvey for that" or "we'll send a bill out on that after the divorce is finalized -- I don't want her to have anything extra to worry about." This lawyer has plenty of recorded time (work in progress), but it never goes any further than that. He also is certain that he will eventually get around to it, so is not likely to view his procrastination as a problem.

A close relation is the lawyer who likes to hold bills until the absolute latest time possible. She may feel that since there's "only one more thing to do on this", there's no reason to send a bill this month. Or he may think that the total bill will be more palatable to the client once a settlement has been achieved, and so doesn't want to spoil the attorney-client relationship by asking for money at this stage.

The supervising attorney who writes down all work done by associates. Most associates in larger firms have had at least one bitter experience with the partner who won't write down his or her own work, but lets the red ink flow freely over associate's bills. Granted, many times these write-downs are fully justified: the associate may not understand the work and may be taking too long over it; the client may have specific issues regarding the billing of which the associate is unaware. But sometimes, especially if partners are compensated on work billed, it becomes tempting to reduce a bill on a matter by cutting into the hours billed by a junior lawyer and retaining the partner's hours intact.

The lawyer with low self-esteem. Although it may sound like a joke, there are many lawyers out there who view their own pre-bills, say "I could never have done anything worth that much money", and whittle away at their hourly totals until little if anything is left. True, new attorneys often spend too much time relative to the value the client may receive from the matter. It's good to look objectively at the total and see it through the client's eyes. But some attorneys have never become used to looking at themselves as valued -- and valuable -- professionals. The sight of a multi-thousand dollar invoice to a client fills them with anxiety and a conviction of their unworthiness.

The lawyer who won't return pre-bills. Standard accounting practice in law firms is for time to be recorded, a draft bill generated, and this draft, or pre-bill, given to the responsible attorney for final correction and approval. But once it hits the in basket, it may never come back out again. Some law firms, especially the larger firms, have come to the realization that rigorous deadlines for returning pre-bills may become necessary.

Why are all the above such wasters of time and money? Obviously, the firm can't spend or distribute money that hasn't been billed, but there are subtler issues at work as well. For one thing, failure to review and return pre-bills may disrupt the entire firm's billing cycle, especially if bills are sent in batch at a certain time each month. And it is not accurate for a lawyer to assume that bills will be cheerfully paid by a client, regardless of how far back in the past the work was performed. In addition, capricious or unnecessary write-downs, whether they are of an attorney's own work or of someone else's, create inconsistent messages to the client about the value of the work. Not only that, but the morale problems can be staggering if associates, or even partners, see that other attorneys in the firm are not required to produce time records, return pre-bills, or cooperate in the billing process to the extent that they are.

So if you see yourself in the above descriptions, take steps to analyze your billing procedures and improve your policies on recording time, reviewing, and correcting bills. Your bank balance will thank you, and so will the other attorneys in your firm!