Time Recording – A Primer on Billing “by the unit”

Time Recording, Billable UnitsWhen I went to Uni, I had (at least in theory) an infinite amount of time in which to accomplish any task.  In business terms this meant that I basically had no idea what the value of time was.  I was oblivious, as (I expect) most law students are, to the time pressures that practice would place upon me.  This comes up in a number of areas (like legal writing) but today we are going to look at the 6 minute unit, and time recording.

I am keen not to come off as a hypocrite here, so just in case  anybody who knows me reads this article I will make this clear:

I HATE TIME RECORDING

Fortunately I am not alone, with the majority of lawyers viewing time recording as more of a necessary evil than anything else.  That, in itself, is not a problem.  What IS a problem though is where the hatred of time recording impacts upon it being done correctly.

Have you noticed that shows like Suits and The Good Wife don’t suspend the action every 6 minutes so that their surprisingly good looking collection of youthful and energetic lawyers can jot down a time entry into their management system?  I can’t think why that might be…. Although I have noticed that they don’t ever seem to do any filing either…

Why do Lawyers Hate Time Recording?

Here are the common arguments about time recording and why many practitioners don’t like it:

  • It doesn’t seem to be accomplishing anything;
  • It’s very time consuming if it’s done properly;
  • There is a constant ethical/moral (strange words, I know) dilemma about how to do it right, and many different opinions on the subject of what “right” means;
  • This is the part of the job that is scrutinized in the event that things go pear shaped;
  • It’s not something in which we have been trained (not that it requires a lot of training);
  • It’s absolutely not the reason we became lawyers in the first place.  We became lawyers to practice law, not to push administrative buttons;
  • It’s boring and, despite being boring, requires constant attention to get it right.

I’m sure there’s a longer list, and you should feel free to add to it.  However, you get the idea.  Basically, time recording takes us away from what we see as our “core” activities, and so it is on the receiving end of a lot of ill will.

Time Billing – How to do It Right

With all of those things in mind, the reality is that Time Recording is here for a good long while yet.  Yes, alternative billing methods exist, and some firms use them, but most first still focus on time billing for many areas.  Here are my Tips to help you get on top of your time billing:

  • Make it part of every task.  Time Billing is a habit – you need to get used to doing it every time you do anything.  Note the start time, the finish time, and then enter the time.  Doesn’t matter if you’re using paper, excel, or a purpose made system – it’s a matter of “garbage in, garbage out” – so do it as you go and make sure that you do it accurately.  If you’re ever in doubt about this, picture yourself being cross examined about a particular time entry on your client’s bill, and then answering questions about its accuracy.  If you’re comfortable with that, then you should be OK.
  • Do it accurately.  This is a double edged sword.  On the one hand you need to ensure that your time is not recorded as more than it should be, for the obvious reason that you are defrauding your client.  However, many younger practitioners seem to think it’s up to them to deduct time – it’s not (probably).  Unless you’ve been given specific authority, you shouldn’t be arbitrarily reducing your time just because you thought it would be best.  If you aren’t sure – speak to your supervisor about it.  Don’t forget you are there to BOTH serve your client and offer economic value to your firm.  Your time recording is an opportunity to do both properly.
  • Make sure your time entry reflects what you actually did.  This should be a no-brainer, but I’ve read enough time entries to know that it isn’t.  Again, picture yourself in cross examination, and you are asked about a 15 unit time entry “telephone out to Court”.  Your file note is illegible, and you are asked to explain what you were on the phone to the Court about for 1.5 hours, six years after the event.  Can you do it?  Probably not.
  • Phrase your time recording in a way that the client will appreciate the value in the task.  This is for a few reasons, the first of which is that if your client requests an itemised account (assuming they can do so in your jurisdiction) then the starting point for that itemisation will be your time entry.  This is basically the “golden rule” test – if you were the client, and you got a bill with this entry, would you be OK with the description?  Obviously this is not an exercise in creative writing – say it how it is.  But there are ways of phrasing text which communicates value, and ways which does not.  An entry that says “flicking through a bundle of correspondence looking for attachments” might just as accurately be phrased “compiling exhibits for affidavits in support of the application to [accomplish something important]”.

BONUS TIP

Learn from what gets done to your time entries.  If your time recording is amended at billing time, then take a few minutes to look at what was done and why.  If necessary, ask your partner why a change was made if you don’t understand it.  That way, next time, the process gets more efficient each time.

Those are my tips for today.  It does take practice, but it’s extremely important to get this stuff right.  Of course there are other methods for billing clients than the time-costed method, but that doesn’t necessarily mean that time recording will come to an end.  Beyond the bill, time recording and billable units offer a way of measuring productivity, so it’s entirely possible that firms will continue the practice for some time, even if the billing practices change.

What did I miss?  If you have any guidance to help out, be sure to let us know.

Happy lawyering (even when you’re time recording)!

  • Hi Chris…

    Some good tips there thanks…

    I’d go a lot further and say that activity capture goes way past being an aid to fixing a level for a bill and assists lawyers(and their Support) to track where the rest of their day (and year/career), is getting invested…

    KMSFirmTime is just as important as ClientTime because it is an investment in the future, future work/clients, improved skills/knowledge, improved systems etc.

    The average employed lawyer invests over $200,000 worth of FirmTime every year…and it is career-making to spend it wisely and monitor outcomes.

    It shouldn’t be spent filing!

    Interestingly it is a universal truth that lawyers who conscientiously capture their FirmTime activity also capture an improved percentage of their ClientTime…no value judgements are made about whether the time should be captured so it’s comprehensive.

    NB This discussion isn’t about whether all of the investments being made in “normal” client work or “the firm as a major client” work, are high quality. That is a vital subject for another day (every other day)!

    Warm regards,

    Rob Knowsley KMS

    • Hi Rob and thanks for your observations. I would agree – capturing activity of staff is essential and, ultimately, can be used for benefit if it’s done properly. I appreciate you weighing in to the discussion!

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