Law firm billable hours

Maximize Your Law Firm Billable Hours with Practice Management Software

by PracticeLeague
April, 2021

The business side of law practice involves prompt billing, tracking timekeeping and invoicing, accepting online payments, schedule appointments, manage documents and much more. A law practice management software enables law firms to improve billable hours and manage case and client records efficiently

While most of pertaining to law firm billing was managed manually, time-tracking law firm expenses and billing is a tedious process, involving resources and overheads. Integrating the administrative functions by adopting a mechanism of practice management software is vital to run modern law firms, for the sheer reasons of-

Efficient allocation of resources

Retrieve, access and store documents on a safe and secure mode

Draw insights on billing and expenses

Improve billable hours so that no details are missing

About Billable Hours and Why Time-tracking is Important

Let us first take a step back and understand what does billable hours mean and why time tracking is important for law firms. In simple terms, billable hours may be explained as the law firm’s billing practice of keeping track of the hours spent on a per job basis for a particular client. Lawyers keep track of the time on their own and submit them for approval before passing it on to clients. The methods of tracking may vary but the general principle remains the same; invoicing for every manual hour spent on the work. So, in the bargain lawyers may very often overlook the billing details, miss out on certain tasks and therefore miss out on the potential earnings by billing incorrectly.

So, what happens next?

The results are predictable-lost opportunities, loss of billing, extra time spent on tasks without being accounted for and mismanagement at the end of the day. As a lawyer, it is important to value your time by billing appropriately so that no details fall between the cracks. For any law firm to thrive, tracking billing of client is important and an indispensable part of legal operations, without which, there is a chance that the law firm will be unable to invoice the client, causing loss of revenue on essential billable activities.

The American Bar Association reports that failing to track billable time immediately causes a 20% drop in the billable time.

This is therefore, imperative that both premier law firms or other growing law firms have proper mechanism to track activities and precisely bill them on time. In a bid to provide better services law firms stand a great chance in winning the confidence of its clients by providing better transparency in billing, time tracking methods and prompt accounting methods.
It therefore goes without saying that law firms have to adopt and use fair and ethical billing mechanism so that each task is accounted for, and no opportunity is lost. Improving billing hours, therefore means a fair method of billing where every aspect of the service is accounted for, tracked on a routine basis and billed for at the end of the billing cycle. Typically, billing hours involves time committed for litigation, advisory matters. Billing details should also involve details of filing fees, court reporter cost, service of process fees, travel expenses, providing legal opinions, drafting letters, etc., that involves legal relation between the client and the law firm.

Moving on to the Non-billable Hours

If tracking billable hours is of utmost importance, reducing non billable hours is equally vital for any law firm. They are important for the growth of the overall law firm business that involves meeting stakeholders, client development, networking and administrative duties. Investment in legal learning, furthering education, may not add on to the bottom-line, but is crucial for long term sustenance and professional development. Therefore, non-billing activities is necessary and as important as the billable hours

As per the Clio 2018 Trends Report, the realization rate shows that only 81% of billable hours worked are invoiced, and the collection rate averages a mere 85%.

Adopting an integrated Law Firm Practice Management platform has its own set of benefits

Compensation systems for lawyers work well since they aim to incentivize and recognize the consistency in performance. While the compensation strategy is directly related to the hourly billing, there is also a need felt for consistency in the overall process. Partner hours and billing rates vary modestly across different law firms, but in any which ways, lawyers will be drawn towards taking up more substantive legal work and develop networking to reach out to more clientele. Whether for compensation or hourly billing method, having a software tools enables calendaring, tracking lawyer work hours, and overall output of individual lawyers.

With an increasing number of law firms adopting integrated solutions to track time and manage their billable hours, the focus is two-fold:

  • 1) To achieve and improve billable hours and provide high quality time on client case
  • 2) Streamline processes and indulge in more value-added activities or educating your clients

RazorLex by Practiceleague is a time-bound solution for a host of issues that law firms face as a result of management (or rather mismanagement) of bills and inadequacies caused due to time-tracking.

  • 1 As a robust and integrated platform, RazorLex is an efficient time and billing software that provides timely billing with multi-level billing structure. This includes the retainership model, hourly billing, activity-based billing, resource/designation specific and blended models

  • 2 The invoicing and payment tracking feature allows for the availability of final invoices and receivables with a single 2 click. Timesheets, activities, court appearances, tasks, etc., are integrated for timely and automated billing.

  • 3 Automatic invoicing for the work done by teams and individual resources can be managed with the time and billing module.

  • 4 Draft bills, review and get timely approvals from partners and create timesheets and billing expenses automatically tagged based on the billing mandate given by client.

  • 5 Track payments of clients on a real-time basis and send timely reminders for overdue payment so as to reduce lawyer downtime and quickly turn law practice into a profitable business.

  • 6 Easily assign, track and manage various tasks for themselves and their teams, while tracking the progress of all assigned responsibilities, being able to set deadlines, automate reminders and receive alerts for all competed tasks

  • 7 Real-time and on-demand Client, Team, Resource, Partner and Office wise reports are made available to help you analyse and grow your practice. Comprehensive reports and graphs with every detail about your firm's productivity and revenue are automatically computed.

  • 8 Expenses related to vacation time, travel, court fees, copies, calls, emails, courier and postage fees, and other overheads can be recorded in real-time even from your devices. Out of the pocket expenses can then be automatically tagged and attached to the client invoices.

  • 9 Milestone-based payments allows law firms to manage various milestones on each project, work progress, total cost of individuals working on the project, the cost, time, and resource allocation. The Project Management tool allows Law firms to track profitability of projects and clients while allowing for a better control and visibility on each project.

RazorLex is an efficient platform that allows lawyers manage their billable hours and downtime and thereby increase law firm profitability. Since the time and billing features are directly integrated to the RazorLex software, it contributes to increasing functionality and improving transparency and accountability with lawyer time tracking software. While working in a remote space, these features can prove to be beneficial when incorporated into the system thereby increasing collaboration between law firm employees, clients, co-counsel and external stakeholders. By replacing the impractical IT infrastructure, with an efficient law firm billing software, law firms ensure that business operations are unhindered even while working remotely or in a hybrid work atmosphere.

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