Time to Keep Time

by David J Bilinsky

Lawyers live by time. As such it is important to track your time even if you don’t bill by the hour, in order to determine your profitability in a file, as a lawyer, a practice group and as a firm. There are many metrics that help assist with this, but they all have as their starting point an accurate measure of the time worked on a daily basis. One of the most interesting metrics is a lawyer’s effective hourly rate (EHR) which is the total fees received on a file divided by the total time put into a file (not just billed). Oftentimes EHR is compared to a lawyer’s standard billable rate. While most lawyers consider it fortunate to have an EHR that is 95 per cent of their standard billable rate, some lawyers who have moved into alternative billing have found that their EHR can be multiples of their standard rate and that their clients are delighted in how they bill. As they say, it is all in the presentation.

On the other hand, future financial difficulties are oftentimes indicated by a change in time recording and billing habits; one of the first signs of a lawyer in trouble is either a failure to record time or alternatively, a failure to bill out WIP. Either can indicate a lawyer suffering from burnout, substance abuse, stress or some other problem that is affecting their work.

In any event, it is important for a lawyer and a firm to have accurate and contemporaneous time records. How can technology help here? There are a number of tools and applications that can ease the burden of keeping time.

Timekeeping Tools
Here is a selection of time keeping applications for a busy lawyer:

MonetaSuite (www.monetasuite.com) is composed of three applications: MonetaMail, MonetaMobile, MonetaDocs as well as MonetaServer. These applications track time when working in Outlook, in Excel or Word on a PC and on your mobile device by monitoring active windows and emails. Output in an an Excel spreadsheet or PDF document. This is a simple, automated way of tracking your time. MonetaMail is $99/USD/year.

TimeSlips (www.timeslips.com) is the standard for time and billing by professionals. It not only tracks time, it generates bills, tracks receivables and integrates into most accounting packages. $499.95 USD.

RainMaker (www.rainmakerlegal.com) offers time and expense collection as well as financial management, CRM (customer relationship management), conflict checking, collection management, document management and more. Cost is not disclosed.

PCLaw (http://tinyurl.com/o7lr8o) is an integrated legal trust, general accounting and time and billing solution and more. PCLaw has been the traditional legal solo/small firm accounting standard. First user is $1140.00 Cdn.

LawStream (www.lawstream.com) is an integrated legal trust and general accounting, time and billing, practice management solution for PCs as well as for Macs. Mac users rave about this product. Cost not disclosed.

Amicus Accounting/Amicus Attorney (www.amicusattorney.com) is an integrated time and billing, legal and trust accounting and case management solution. Amicus Accounting $349 USD initial licence, Amicus Attorney (Small Firm Edition) $499 USD initial licence.

Further thoughts on Time
If you only bill by time, you have a theoretical “ceiling” in the amount you can bill (24 x 365 x standard hourly rate) every year. By knowing what it costs you in time on a typical file, you can start to move into alternative billing solutions that provide certainty to the client and a guaranteed profit to you over the long haul. Mark Robertson has co-written a book that covers the whole spectrum of value billing by lawyers. You can read a sample chapter at: http://tinyurl.com/lvjqug. Mark’s book explores the options in this regard. He is living proof that this works; he has built his practice around value billing.

David J. Bilinsky Blog: www.thoughtfullaw.com.

This article originally appeared in the October 2009 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.