Tag: time sheets

NSW Law Society’s reminder to the Legal Profession about time billing practices

by on Nov.05, 2011, under Practice Management Services

For the benefit of all practitioners it is timely to be reminded of some of the principles which guide prudent solicitors using time billing.

  • The distinction between time costing (a tool of law office management) and time billing should not be forgotten.
  • Accurate and prompt recording of time, during or soon after attendance, will be vital at the time of bill preparation.
  • The client’s needs and requirements, especially demands for excessive service, should be promptly recorded at the time of taking instructions and referred to at the time of billing.
  • The client should be promptly informed of any additional work required and the need for it.
  • The various administrative and incidental expenses (including travel and photocopying) should be carefully reviewed prior to billing.
  • Sensible and realistic time billing, in accordance with the principle of fair and reasonable costs, will prevent many disputes arising.
  • The bill of costs is one of the most important documents received by the client and requires careful preparation.
  • There should be a careful balance between brevity and sufficient information in the bill of costs to enable the client to understand and appreciate the fees charged.
  • Finally, apart from time billing, the availability of alternative fee charging methods should be discussed with responsive clients when appropriate.



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Practical Practice Management – Time Sheets

by on Oct.27, 2010, under Practice Management Services

Law firms are businesses like any other business. They are in business to make money for the owners, just like any other business. They have “front office” people – the sales people, and “back office” people – the support staff, just like any other business.

Is this so difficult to understand? Then why do so many law firms not get it? Is it because, as a “profession” it is deemed to be an area of life that sits above us ordinary folk? I don’t think so.

I think the real problem is that, having been high achievers throughout school, college, university, law college etc some practitioners may not have seen it necessary to go to business school, and learn how to run a business. And let’s face it, if you are really bright, you will be picked up by one of the larger firms where all the management and “back office stuff” is already being taken care of by professional managers.

So let’s put the bigger firms to one side and concentrate on the mid-tier and smaller firms.

Apart from the normal HR issues associated with managing people, what are some of the more important things that need to be considered?

First and foremost for the business owner and/or manager to consider is what product or service the business is selling, and then all the sales management criteria around that. By that I mean the product being such things as a Will, or a commercial transaction or a service being advice in regards to say taxation or business structure. They are your saleable items.

Nearly all law firms (although one can hope that this nearly 100 year old practice will soon be put to rest) still insist on billing in units of six minutes (or part thereof). Therefore, six minutes equals one unit and where the charge out rate is $600 per hour, one unit is worth $60… or is it? (That’s a question for another time).

So, having established the product/service and the price to be charged, you’d think that the business would maintain a very tight focus on how they and their legal staff were spending each day, particularly in regards to accurate and efficent recording of time on clients’ matters. This is important because this is what the business is selling. If it does not keep a strict eye on sales (or productivity, to use a less confronting term), how will it know how well it is doing? How will it know which fee earners are earning their keep and which ones could do better? Maybe it’s not the fee earner, it might be that it is that particular practice area that has slowed down due to economic circumstances. Which then goes on to raise the question of whether or not staff numbers need to be reduced, or (preferably) more marketing needs to be done.

The good firms do, and probably could do better. The smaller firms do, to a degree. A note on a file is just not good enough, particularly if a client disputes the fees charges and you then need to have your costs assess by an independent body. They will want to see an accurate recording of how the bill was calculated, and will want to ensure there has been no duplication of work. How can this be achieved if there is not an accurate record?

In my position, I am able to discuss with all levels of practitioners just how they keep a record of the time spent on a client’s matter.  I hear all sorts of things, from those companies and firms that are very good, with good systems and strict adherence to time keeping policies to those where records are “created” some days after the event, to those where a note is made on a piece of paper and left on file (until it is remembered some while later).  This is not a great way to run a business.

More on this at another time.

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