Special from the Edge International Communiqué
Law firms are their own worst enemies in the effective use of billable hours.
Founding Partner, Edge International
Managing time in a law firm isn’t only about billable and non-billable hours - it is about creating a dashboard that allows lawyers to elegantly drive client expectations relating to time-frames and costing.
Sad State of Time Tracking in Law Firms
I asked Todd Gerstein of Smart WebParts (www.smartwebparts.com) what his latest data on this subject looked like… he said: “Less than 40% of all timekeepers keep their time contemporaneously; the silent majority (60%) reconstruct their time when they prepare their timesheets.” He went on to say: “The compliance numbers are just terrible. Most of the time 80% of the partners are not in compliance. Associates are not in compliance 35-45% of the time.”
Todd said this about Month End Cut-Off: “We measure the amount of time that is put in after the month end cutoff… which is at risk for billing and collection realization problems. It is not uncommon to find 5-7% of time (wip value) at risk to miss the billing cycle. It also seems to be one of the issues that sets off managing partners.”
If the loss of inventory is not bad enough (cash in the door), there is a much greater and more sinister ramification of the messy and inadequate timekeeping practices. In this modern era of Legal Project Management, it is imperative that lawyers who lead teams understand on a daily basis where their projects stand in the context of two vital metrics:
- Time to completion as compared to the client’s timeline expectation, and
- Cost to completion as compared to the client’s budgetary expectation.
Destroying the Client Relationship
The ability to communicate variances and projections with clients on an ongoing basis affords the law firm its greatest opportunity to maintain high levels of client satisfaction, and from time to time, to obtain variances with the client’s blessing. Most law firm lawyers do not have a dashboard. They fly blind. The failure to accurately track time distorts the picture and ultimately annoys the client.
1. Stop the theft now: Stop tolerating sloppy time recording practices by individuals. It is not charmingly idiosyncratic: it is theft, theft from the individual timekeeper, theft from the firm, and yes, even theft from the client who deserves accurate information.
2. Provide the best tools and technology: Todd Gerstein’s system puts your existing systems to work for you making the time tracking process easier and more accurate. If you have a better way fine… but you need to compensate for the human foibles that make the current processes inadequate.
3. Train: Tracking time well is an essential skill… help your people acquire and improve that skill.
4. Keep the client in the equation: Time tracking is not only for your internal management … it is also for the benefit of your clients who are happy to pay money for value but hate surprises. Create systems that make it glaringly obvious when your lawyers are not tracking their time accurately.
Gerry Riskin is a Canadian lawyer and Business School graduate with a global reputation as an author, management consultant and pioneer in the field of professional firm economics and marketing. After winning two Queen Elizabeth Scholarships, he practiced law from 1973, in 1979 becoming a partner with one hundred-year-old Emery Jamieson and then in 1984 becoming the Managing Partner of Snyder & Company with offices in Canada and Hong Kong. Gerry was consistently one of the top three rainmakers in his firm and quickly began to develop a reputation which led to a demand for his abilities to teach others to do the same.
In 1983, Gerry co-founded The Edge Group which in January 2001 evolved into Edge International. Over our history we have topped the list in a survey depicting the most popular marketing consultants by major U.S. firms and have been named one of the top three legal consultancies by U.S. Managing Partners.
Gerry has clients which include the most prominent professional service firms in the world, has led numerous workshops, retreats and seminars and has been engaged to assist firms requiring marketing, strategic planning, one-on-one coaching, merging, multi-office management, practice group and industry group management, client relations skills training and management training.
Gerry lives in the British West Indies. He can be contacted in the U.S. or Canada at +1 202-957-6717 or, from other countries, using the Edge toll free numbers. He may also be contacted by e-mail at firstname.lastname@example.org
Visit Gerry’s Blog, Amazing Firms, Amazing Practices at www.gerryriskin.com