We Built Smart Time with These In Mind
What timekeeping metrics should you measure? Here’s our offering: a list of the top three metrics absolutely every law firm should be tracking. And, we believe that this information should be made available to both the timekeeper and management. After all, if there isn’t a feedback loop within the firm based on those metrics, what point would there be in measuring?
1. Hours Booked: This is the classic timekeeping measure for law firms. How many billable and non-billable hours did the timekeeper book? Some call this metric a measure of productivity, which might be debatable. But it does shed light on how hard the timekeeper is working. It also shows how many hours a timekeeper has worked that can be converted into revenue.
While most firms track booked hours for the current month and year-to-date, we have also seen firms track hours for 18 months rolling, in order to see longer-term trends. If you set budgets (and I highly recommend you do), be sure to show the variance between hours worked against budget, and be sure your timekeeping system puts these stats in front of the timekeeper. We’ve seen that the mere presence of monthly and annual budgets helps increase booked hours. I am always amazed at how many firms don’t have clearly stated budgets, but ones tentatively said with a whisper.
2. Month-End Late Time: You’ll want to look closely at how many hours the timekeeper books after the month-end close, and also how many hours miss the monthly billing cycle. All the research into law firm profitability shows that hours booked and billed months late have a lower profitability realization rate. It’s clear that month-end late time is a sure way to lose revenue you’d have otherwise realized. In fact, we’ve seen this number as high as 7% in some firms. Management must work to bring month-end late time down; these stats are a surefire way to make your managing partner crazy. (Give the dog a bone.)
3. Time Entry Velocity: This measures how quickly time entries get recorded into the system, or, in other words, how many days after doing the work that the timekeeper enters hours into the system.
This one’s important, so let’s dive deeper into the math. Velocity = the difference between the work date and the entry date. So, when velocity = 0, the timekeeper worked and booked time on the same day. When velocity = 2, the timekeeper put in a full week of time into the system on Friday. If velocity = 15, that means the timekeeper is putting all their time in at month end.
Now, the right way to measure velocity is to score every time entry and then average it to get an overall score for each timekeeper. This score transmits their behavior. If a user averages a score between 0 and 1, they are a “contemporaneous” timekeeper, meaning they enter time on the same or next day. To support this type of timekeeper, you must have contemporaneous timekeeping tools like rapid time entry screens and timers.
If a user’s score is greater than 2, they are a “reconstructionist” timekeeper, meaning they are attempting to recreate their day by looking at emails, phone calls, appointments and such to reconstruct their time entries days after the fact. This type especially benefits from time capture technology, which provides the user a journal (derived from electronically monitoring the timekeepers) of what they did, when they did it and how long it took.
Besides identifying behavior, velocity also measures timekeepers’ compliance against the firm’s time entry due date policy. Here, you’ll want to measure the difference between the policy score and the individual’s score. For example, if the firm’s policy is that time for the week must be entered by Friday, the compliance policy has a score of 2. If the user has a velocity score of 3, it means they are not in compliance.
Most likely you know who your late timekeepers are, and this measure gives you a way to quantify it.
So there you have it—the metrics that will give you insight into your timekeepers’ behaviors, and thus, your firm’s inner workings. (Or not-workings, as the case may be.)
With these in hand—reported to you in Smart Time—users and management can come together to better steer the ship toward timekeeping compliance and greater profitability—all with greater simplicity and ease.