Should my law firm track non-billable time?
Billable time should always be tracked as it happens – after all, it’s how firms get paid. But what about non-billable time?
For law firms who want to optimize their workflows and allow their high-level lawyers to focus on billable tasks, the best way to do it is by tracking non-billable hours. Reviewing these reports on an ongoing basis (typically monthly) can show trends, help you see where the firm can improve
To track your non-billable hours you can likely use the same tool you’ve been using to track billable hours, which makes implementing the workflow relatively easy.
Before you get started, make sure you’ve laid everything to be tracked. Examples of non-billable time to track include:
- Professional development and CLEs
- Business development and marketing
- Management meetings and law firm functions
- Administrative tasks, like billing and invoicing
With effective time tracking of non-billable hours, law firms can put that data to use in a number of ways.
Locate inefficiencies
By tracking non-billable time, you can see areas that are taking up more time than they should be or that can be reworked to allow for more time for the recorder. For example, there may be opportunities where work could possibly be delegated to an associate or paralegal to free up more billable hours. Or you may find there is a disproportionate amount of time spent on inter-office meetings and work to minimize these where possible.
Additionally, you may find that items that should be billable are instead being thought of as non-billable.
Determine fees
You may not realize how much non-billable time is being spent on cases. Once you step back and take a big picture look, you may find that you need to charge a higher hourly or flat fee in order to cover costs[1]. On the flip side, it may show you that you can reduce certain rates to stay competitive.
Plan better
To get done everything that has to be completed, lawyers need to be very aware of how long certain tasks will take them. By keeping tabs on non-billable hours, lawyers can then have a better idea of how long it will take to get done what they need to rather than trying to fit too much into a particular day. Ultimately, this leads to better time management and an increased ability to meet deadlines and delegate effectively.
References
1. Billable or Non-Billable: How Many Kinds of Time Are There?