Too often, receipts and hastily made spreadsheets get lost in the shuffle of trying to just get the work done. But this is an area where careful record-keeping will save your law firm quite a bit of money, once it’s all added up. There have been a few numbers bandied about concerning non-billable hours and the poor comparison to billable hours (if you’re counting non-billable hours) as a bad thing. It would seem more helpful to call your billable hours non-billable hours time investments, of course. At any rate, there seems to be a consensus that in real life, an attorney is only spending less than three hours on billable work per day. When new lawyers and law students ask and do the math on “How many billable hours in a year will I be expected to work? It can seem very difficult to track that time, especially when almost every minute at work must be productive and profitable.
- Sometimes clients may complain if you add non-billable hours to the invoice even though the hours were spent indirectly for the client’s benefit.
- Doing this will ensure you stay organized and help you understand exactly how much to charge your client.
- For example, Forecast is an all-in-one tool you can use for project management, invoicing, time tracking, and administrative work.
- The tool automatically records your work activities, including those conducted offline.
- In numerous industries, companies charge their clients on an hourly basis, for the services they provide.
Whether done manually or by a time tracking tool, billable hours need to be logged. It’s best to automate it, even if it’s through a simple time tracking app. If you’re completing multiple tasks at the same time, then you also need to track them separately. Most clients will have an expectation of the amount of time a project will take and if your billable hours fall within this, they most likely won’t question it. There are plenty of time tracking apps out there such as Indy’s Time Tracker that will accurately calculate the time you spent on a project.
Firm of the Future
If you are required to track your billable hours, you may benefit from an automated time tracking solution. A digital time tracker can help you record all your working hours. Some tools make it easy to track time against clients or jobs, so you can bill more accurately for the work you do.
- These are critical because they determine the income of a worker based on how much time they spend working.
- Everything done during that time is not exactly related to the client or done on their behalf.
- This will also help you plan for the following day and decrease your non-billable hours.
- Our memory is subject to flaws and it’s almost impossible for someone to remember every minute of a workday.
- Perhaps you both underestimated the amount of work required.
For the majority of law students, billable hours are an important concept to understand, especially as students weigh career options. Most law students graduate law school and begin life as an attorney at a law firm where billable hours become an important aspect of day-to-day life. You’ll know exactly how many hours each employee spends on a project and will be able to determine if they could be working faster or more efficiently. You can also use this information to pay them fairly when billing clients based on hourly rates. Lawyers can track billable hours with a billable hours chart, which will save them the time, effort, and frustration of calculating the hours manually.
Do Review Missing Time Once a Week
For example, you finish your breakfast and you have three hours until lunch. Shut down your email, avoid distractions and start tracking your time with a mobile app or a desktop app. Knowing precisely what your billable hours percentage is will help you to identify areas in your business that may need improving. This may be additional team training and a re-assessment of what you class as billable and non-billable. It takes a few seconds to switch your timer to a different task and drastically improve the accuracy of your billable hours. An attorney’s approach to billable hours will differ from a PR agency.
Have clear policies to explain rates and billing practices to clients from the start. Communicating clearly can help manage clients’ expectations regarding billing and payment. By knowing exactly which tasks constitute billable hours and how to keep track, you’ll be ready and set to optimize everything from workflows to invoicing. How many billable hours you aim for will depend on your industry and professional position. It is also possible to monitor the utilization rate of employees working billable hours. Excel has a template specifically designed for managing your billable hours.
