In this article, we would present our experience and researches about law firm challenges and organizational difficulties as well as present innovative timesheet software for lawyers. It could play an essential role in the development of productivity, profitability and efficiency of doing law firm business, under certain conditions.
Why some law firms always stay small?
When the law firm is growing it faces essential challenges that cannot be managed appropriately in most cases. Crucial challenges are usually the following:
- Partners do not have time for strategically thinking
- An increasing number of projects is hard to manage, especially if a law firm prefers to keep an excellent level of quality
- In the growing process, partners do not have reliable insight into how many hours their associates spent on different tasks and clients
- Costs management!! What is the cost of the client?
- You have to invest in infrastructure, but how: risk + profitability decrease
- Partners are occupied with operational tasks
- Partners are not skilled in economics and KPI management
- Managers (Senior associates) do not possess relevant leadership skills
- Lack of controlling and budgeting function
- Senior associates waste their time, but it cannot be efficiently controlled by Partners.
- Associates time allocation is not managed adequately
Timesheet software for lawyers as key infrastructure for growth and quality!
Timesheet software for lawyers is an innovative solution for the development of the work productivity of attorneys and the profitability of projects and clients.
Business data you have, such as revenues, total costs, profit, balance sheet, etc. represent the anatomy of your firm. Time Analytics enables review of business physiology, provides automatically answers and guidelines for the following:
- Are my attorneys working efficiently?
- How much time do they spend on each individual task?
- Control and improve the productivity of them?
- What is the structure of non-billable time (time-wasting discovery)?
- Reasons for overtime?
- I know what is invoiced for each project, but what is the cost of the project?
- Allocate costs to each client?
- Calculate profit per client?
- Increase the efficiency of activities and projects?
P.S. According to our research within 47 international European law firms, 89% of them declared they have a need for time tracking per employees, task, and clients. 77% of them keep records manually while only 23% implemented online timesheet software for lawyers
Let’s talk about realistic billable rate and how to manage that?
If your monthly revenues amount to 200k USD, and all of your people work 2,500 hours total hourly rate is 80 USD. If we assume that 1,000 is billable, the realistic billable hourly rate is 100 USD. Nice figures but what it does mean to you and how you can use this information in order to improve firm performance?
Track billable hours (and charge your efforts properly)
Timesheet software for lawyers contains a database with an accurate number of billable hours for each employee, project, and client. With two clicks you get reports for billable hours for the required period for each client.
Most importantly, there is the main dashboard that offers an overview of billable hours of movement per month:
Time utilization – an indicator of time-wasting
Calculate time utilization by dividing total hours by billable hours. Investigate where 1,500 non-billable hours are going to?
In the above graph, you see the movement of utilization rate. Details of non-billable hours could be used for the analysis of the non-productive behavior of your attorneys and time-wasting. Still, it is very important to follow the monthly movement and overtakes appropriate action timely. For example, in the case utilization rate dramatically decreasing you can discover the reason for that. In the reports section, the utilization rate is calculated for each project, each employee, and each client.
Make connections in total hours spent on business development and revenue increase!
However, the structure of non-billable hours may be an indicator of positive development. Namely, you can follow total hours spent on business development activities, meetings with potential clients, marketing. Such time should be considered in relation to the marginal growth of revenues. If the increase of such activities results in an increase in revenues or number of clients, that is a positive time.
Administration work – too much time consuming
Timesheet software for layers also provides a structure of administration time consumption. Accordingly, in detailed reports, you can monitor whether huge administration work is appropriate or not.
Sum all indicators and compare with the previous period – where are you going?
By tracking a movement in performance you can make a good plan, and settle the more reliable goals.
Check how are your competitors doing?
Indeed, you cannot know all information from your competitors. You can compare your law firm indicators with competition in some aspects. If they have published financial statements in the relevant register and if you know the number of lawyers, you can calculate their total hourly rate and compare it with your rate.
Make a budgeted key indicator (KPI)
All of those indicators should be analyzed historically. In addition to your excellent forecast, that is an essential foundation for the preparation of the main KPIs budget. We always suggest the preparation of one year budget on monthly basis. There are for steps in preparation relevant KPIs budget:
- Set powerful KPIs
- Compare figures with last month and discover what is the reasons for the difference
- Based on all figures make an annual budget (total revenues, margins, total hours, billable hours, total rate, effective rate)
- Once you have a budget, you can compare actual figures with historical figures and budgets. Find the reason for the variance.
Boost your law firm performance!
Timesheet software is basically your management tool for law firm performance improvement.
To summarize, the software for lawyers is a guarantee of controlling the historical movement of the main KPIs and represents the foundation for budgeting.
Your main KPIs to be managed in software could be:
- Total hours ( weekly, monthly, annually)
- Total billable hours
- Utilization rate
- Costs per project or service lines
- Time structure per different activities
In the next sections, we would explain how timesheet software for lawyers may help you to manage some of the above key indicators.
Do not use complicated timesheet software for lawyers!
Your read this article as you are interested in how you can develop your law firm. You spent the time to do this, but time is a critical resource we are talking about especially where we have switched to remote work and time tracking for remote employees.
Therefore, timesheet software for lawyers has to be simple.
Our timesheet software for lawyers enables easily booking of their hours spent on specific tasks either related to client engagements or internal tasks. As per our estimation, they need five to seven minutes a day to book their work.
In this way, you get the information database suitable for full business control.
In the market, there is a lot of time tracking solution based on a stopwatch, but our opinion that is too difficult and burdens employees.
How do attorneys keep track of their time?
We invest a lot of time to make simple and innovative solutions. Discover the example of initial entries by each law firm employee:
After entry, the employee can save data that are immediately shown in their timesheet and reports.
Each employee can create a template for repetitive activities and tasks
Further, if the employee performs the usual or repetitive task it can be possible to create an attorney time tracking template. Next time when he runs the application he can select the “My template” option and select the appropriate template where he just inputs a time.
Timesheet software for lawyers powerful reports
Partners of the law firm or any person settled as admin of software get access to all data and reports. They can follow key performance indicators of a law firm in one click.
Associates who are not granted admin rights get access to their personal dashboard and analytics.
Client related reports
For each client, based on timesheet calculator you get a report of client profitability. Time tracking software for lawyers help you to get the following answers:
- How much total time my lawyers spent on clients in a certain period of time?
- How many hours are billable to the client?
- Cost of engagement (this is given as a result of total hours multiplied by hourly cost of a lawyer)
- Time utilization rate?
- What is the structure of services performed to the client, and how many hours are spent for each service?
- How many people are engaged with the client, and how many hours each of them spent separately?
To illustrate, please see the following example of client reports:
Reports related to employees
Reports for employee performance show its total hours, billable hours, utilization rate, etc.
The reports offer relevant data for employee evaluation, it is very easy to see who is productive or not. For each people, the time consumption per each settled activity is available. In a case lawyers work remotely, you can easily check their daily activities.
Furthermore, you can use similar reports that show the structure of all tasks and activities, and performance for each project or service line.
Moreover, for an easy understanding of key figures, we offer a graphical view as a well:
To be clear, our time tracking software for law firms is not billing software. However, very detailed timesheets and time tracking per each client, tasks, service line, project, hourly rates, offer an excellent basis for preparing the most accurate and transparent invoice.
Accordingly, you can export full relevant data for each client and make an excellent invoice appendix, and any time, for the required invoicing period.
Hence, Time analytics as invoicing assistant enables you to control all relevant data before invoicing, offer a more valuable and more accurate way for invoice preparation:
- You can control all tasks and services suitable for billing, before billing
- Review which activities are billable and unbillable and approve that
- Make a calculation of billable hours in excel and prepare invoice based on settled hourly rates
“Before we started with “Time analytics”, our lawyers have been recording their tasks per client and billable hours within excel. Each of them should send their excel file to the firm secretary who collects all data, make pivot tables, and prepare the invoices. Since we had a problem in timely delivering excel files, calculation of fees based on hourly rates, different formats, mistyping issues, we started to use online excel file stored on our drive disk. However, it has been transparent to all lawyers and we need to do a lot of manual work to prepare the appendix to invoice. With time analytics we make a very accurate invoice with a clear and transparent invoice appendix. Our clients appreciate that!
Alfraid Chen, Founding partner of Singapore law firm
How much I should invest in timesheet software for lawyers?
Timesheet software for lawyers is free of use for a law firm that employs up to five employees, with certain limitations of client and task entries. In case you prefer the paid version, the investment is about 5 USD per user. If the monthly salary cost of an associate is 2000, an investment of an additional 5 USD should not be a significant load for law firm cost.
In case you have more than fifty users/employees we can make a deal about a significant discount.
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