By Todd Gerstein
CFO & Founder, Smart WebParts
How often do your timekeepers prepare timesheets? Daily, weekly, monthly? What percentage of your timekeepers comply with firm policy? How long does it take them to prepare their timesheets?
If you don’t know the answers, what’s the cost of not knowing that information?
Plenty. Fortunately, we have some survey answers to the above questions. Let’s drill down into the data to see what we can find.
Taking a Peek at Firm Due Date Policies
A few posts ago, we told you about the Law Firm Timekeeping Survey we co-sponsored with Adam Smith Esq. to gain a deeper understanding of the timekeeping process. In that survey, we talked to firms that ranged in size from 100 to more than 1,000 lawyers, with a mean of 494 attorneys, or approximately equivalent to #82 in the AMLAW 100.
When we asked the respondents how often their firm required them to submit their time, this is what we learned:
- 35% reported their firms request timesheets daily or twice a week,
- 43% weekly and the final
- 22% expect timesheets monthly or twice a month.
But, What’s Really Happening?
It’s one thing to ask timekeepers what is their firm’s policy, and another thing to find out what is their actual behavior. When asked how often they prepare their timesheets, we learned:
- 54% prepare their time sheets daily
- 34% bi-weekly or weekly
- 12% twice monthly or monthly.
However, based on research we performed at multiple law firms, it looks like respondents have overstated their timeliness in the survey. How do we know this? We have a testing protocol that allows us to look into a firm’s accounting system to see how fast everyone is submitting their timesheets.
This script we’ve developed calculates three metrics: (1) how many days it takes for each individual to submit their timesheets, (2) the distribution of scores across the whole firm, and (3) what percent of the firm is compliant with due policy.
On average, our scripts (across multiple firms) tell us that only 18% of the population submits their timesheets daily, in comparison to the self-reported 54% in our survey. Our instincts tell us that respondents in the survey overstated their timeliness. So, we have two data points at odds with each other. Either way, not many people submit their timesheets daily.
It has always been my contention (and this comes from my 25+ years of consulting) if you want to solve a problem, the first step is to measure and analyze. And that is exactly what these scripts do. We have developed scripts for the Aderant time and billing system, and are working on one for Elite. If you are interested in these scripts, please contact me.
Compliance to Firm Policy
Do timekeepers adhere to firm policy? To find out the answer, we cross tabulated how often people submit their timesheets against firm policy. This is what we discovered:
- 77% compliance for a daily policy
- 91% compliance for a weekly policy
- 100% compliance for a monthly policy
Daily compliance at 77%? Eh, probably not. Since we think timekeepers are over-stating their timeliness, compliance would be overstated too. The same for weekly compliance.
How Long Does It Take to Prepare Timesheets?
We have always wondered how long it takes people to prepare their timesheets. Rather than look at the survey population as a whole, we segmented the data by behavior to gain a better understanding of what’s happening.
The results tell us that conventional wisdom is right: Preparing timesheets daily is the most efficient way to go. It’s clear that the manual process of reconstruction used by almost everybody else significantly inflates the amount of prep time.
Opportunity Cost of Time Entry
So, what is the opportunity cost of the time entry process for a firm? A lot!
For example, the $400 per hour timekeeper has an annual opportunity cost between $13,000 and $28,000 depending upon their behavior. One could only conclude that improving the process would yield a high return on investment in absolute dollars and in found time for the timekeeper–eliminating some of the pain.
Opportunity Cost of Preparing Timesheets
It’s clear by now that timesheets preparation comes with a high cost in wasted time. For this reason alone, there are ample reasons for a firm to revisit their timekeeping processes and find ways technology can help improve the situation.
Filed under: Strategy Brief