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Sunday, March 7, 2021

3 Reasons you’re Not Making Budget (and how to fix them)

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Adding ValueAs altruistic as we all generally are, the reality of legal practice is that our firms set budgets, and we need to meet them (at least if we want to stay employed).

This issue can be a bit of a pressure point for many young lawyers as they struggle to acclimatize to an environment in which there is a financial imperative on their time.  Similarly, in firms where the monthly figures are available to be viewed within the firm, this can create a pretty competitive environment where significant stress arises for young lawyers who are consistently not delivering the fees billed.

Consistently with young lawyers though I see three major reasons that they aren’t making budget.  So today let’s take a look at those, and how you can start to work on them.

You’re Leaking Money

The principle area young lawyers leak money is when they discount themselves.  If you are in a firm where you record your time spent on activities (and most do, irrespective of the billing practices) then it’s probably not up to you to start discounting your time at the recording phase.

This might come from insecurity, from compassion (which is not inherently a bad thing, obviously, but in this case is misguided) or from a number of other possible avenues – but the short answer is that you MUST record your time accurately.  Don’t forget that in delegating the task to you, your cost of doing the task was taken into account, as was your capacity and your efficiency.  Therefore, recording less time than you accurately spent is doing you and your firm a significant disservice.

You’re Inefficient

The next place where your hard work gets flushed down the toilet is at billing time.

You spent 5 hours on a task only to find that your magnanimous partner has written off 4 hours of it when the bill is done.

The question  you need to know the answer to is why?

If this happens only occasionally (at least to the point of any significance) then it’s probably not an issue – it’s just a fact of practice that your time will be written off sometimes, for reasons that may or may not be any good.

However if this is happening all the time you need to find out what the cause is.  At this point I’m hoping you work somewhere where you have at least some access to billing records.  The sophistication of your reporting options will vary, but many times you will actually be able to get a summary of your time recorded versus time billed on any given file, or all files.  That is your best bet, and often your accounts department/person will be able to assist.

Sometimes this is a habit of particular senior staff – they just write off time of junior staff because they (wrongly) place little value in your time.  You will be able to identify this if you notice that your time is generally billed completely for files with most supervisors, but not one or two.  This can be a bit confronting, but the best way to deal with it is to speak with those people and ask why they are writing so much of your time off.  Hopefully the mere asking of the question will bring it to their attention (I suggest going with information – numbers are wonderful).  If they are not the kind of people you can approach, then going over their head is unlikely to do anything, but you could give it a shot.

Other times, however, if your time is being habitually written off across the board, then there is a problem with your own processes.  Perhaps it’s a delegation problem, and there is a mismatch of expectations when work is given to you.  Perhaps you are overworking issues and delivering products that could have been delivered earlier and faster.

Once you know there is a problem, and where it lies, you will be a better position to start addressing it.

Workflow Issues

This is where you are doing lots of things, but no file is progressing to a point it can be billed in a timely fashion.

Often this problem will alleviate itself over time.  With sensible employers, they will know if your area lends itself to sporadic billing (personal injuries, transactional land work are two frequent examples).  Over the course of a year, this should sort itself out and you need not worry too much.

However, if it’s not your work type you might want to consider shifting your priorities (if possible) a little, and trying to progress files to an appropriate point where they can be billed.  That might mean finalising an advice, doing a pleading, getting a letter out or whatever catalyst might prompt the issuing of a bill.

Got Billing and Budget Questions?

Need something more specific?  Let me know in the comments and I’ll do my best – what are your billing woes?

Happy Lawyering!

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