If you don't bill all your time, you may not go out of business but you will earn less. ... software. If you record a ba
AUTHORED BY JOHN HECKMAN
TOP FIVE WAYS TO MAKE BILLING YOUR TIME MORE FOOLPROOF AND YOUR LAW FIRM MORE PROFITABLE “The best way to prevent time from falling through the cracks is to use billing software with state of the art tools.” If you don’t bill clients, you will go out of business. It’s that simple. Or is it? If you don’t bill all your time, you may not go out of business but you will earn less. So obviously maximizing the time you capture and bill for is critical to your practice. Yet ironically, recording time accurately and ensuring that your accounts are billed and are in good standing is challenging. Do you know when draft bills are ready for you to review? Do you know which of your accounts have a balance that is past due? Do you know the status of your client’s retainer? Try the following exercise. Figure out how much time you have billed weekly on average for the last three months. Then subtract that from 40 hours a week (or however many hours per week you typically work). Even making generous allowances for lunch and non-billable time, the amount of time you are “missing” is likely to be disconcerting. What steps can you take to capture and bill more of your time? This report discusses the top five.
1 - Establish Best Practices You must define best practices and then train your timekeepers accordingly. Without guidelines, all other efforts to capture more time will be hit or miss. A common objection against implementing best practices is “I’m too busy to do it right.” This argument is based on the misconception that you have to make a full-fledged time entry while you are actually on the phone or in the middle of some other task and then go into another application to post your time. Not true if you use state of the art practice management and billing software. If you record a basic time entry with just a couple of words for the subject, you can go back later to edit your entry before submitting it as final. In addition, you should post your time every day. If you leave it to the end line
of the week (or month!), you will inevitably omit activities. The bottom line is that if you are “too busy” to set up good (even if not “best”) practices, you will lose money. Or as one client told me when asking me to rationalize his system, “I know I’m hemorrhaging money.”
2 - Automate Billing Nobody would claim that following a best practices scenario is easy. You need all the help you can get. The best way to prevent time from “falling through the cracks” is to use billing software with state of the art tools as I alluded to above. Automation is key. Your software should make it quick and easy to bill your time. Look for a program with a time tracking icon everywhere — on your appointment or tasks screen for example — so that you can easily bill time for every activity. It should also pre-fill client/matter information and for appointments the time so all you have to do is adjust the time if necessary and enter a billing description. You should be able to review and produce an invoice for everyone’s time from one screen. Modern billing software should also offer statistical analysis tools that will show whether or not you have met your billing milestones, and thus reinforce efforts to be systematic about capturing time. If you’re the managing partner, you should have the ability to monitor everyone in your firm. The best products display this information with drill-down capabilities — eliminating the need to run a series of reports.
3 - Receive Proactive Reminders Look for a program that keeps you on your toes. For example, it should remind you about time not yet billed, bills not yet reviewed and sent, delinquent bills, retainers running low, and more. These proactive reminders can dramatically improve your firm’s cash flow. You should have the ability to send bills and dunning notices directly from the software as well.
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TOP FIVE WAYS TO MAKE BILLING YOUR TIME MORE FOOLPROOF AND YOUR LAW FIRM MORE PROFITABLE
4 - Work With One Vendor Rather Than Two Many law firms use practice management software and billing software — as well they should. But some of these firms buy these respective solutions from different vendors. As a result, they must rely on syncing technologies to move billing information from one program into the other. Or worse, they must manually export and import data. Not only is it timeconsuming to create the same clients and matters in both programs, but it’s prone to error as well, particularly duplicate time entries. A better solution is to use a single product with both practice management and billing. The obvious benefit of a single software solution is that you enter data once and save time. A less obvious but important benefit is that you can capture more time and get your bills out faster. For example, your practice management program can remind you to create a time entry for an activity such as an appointment. Upon creating that time entry, you can immediately post it for billing.
5 - Search For Unbilled Time, Fees and Expenses Standalone programs exist that track everything you do on your computer. You can then scroll through and assign a particular time to a matter and bill it. However, these programs have disadvantages. For example, you have to figure out which email messages apply to which client and matter plus you have to weed out personal and other non-billable messages. The same applies to phone calls – assuming the
the product can track phone calls (many cannot). Finally, by and large these products don’t integrate with most billing or practice management programs, thus requiring manual time entries. Instead, use a combined practice management and billing system that can generate a report listing all unbilled activities. Basically, the software searches through all your appointments, tasks, phone calls, etc. to find entries that have not been billed. This technology makes it much easier to find and bill the items that have fallen through the cracks since they are already associated with a client and matter, thus requiring less work.
QUICK REVIEW What steps can you take to capture and bill more of your time?
1. Establish best practices 2. Automate billing 3. Receive proactive reminders 4. Work with one vendor rather than two 5. Search for unbilled time, fees and expenses
We’re Talking Real Money I am always amazed that people do not perform even the most rudimentary return on investment analysis for capturing time and other aspects of practice management. The math is very simple. If you capture an extra 12 minutes a day, that’s an hour more per week. If you work 50 weeks per year, and bill at an average of $300 an hour, that’s an extra $15,000. Per attorney! If you capture an extra 30 minutes per day, that works out to $37,500 per year per attorney. Again, try the exercise suggested at the beginning of this report. Capturing an extra 30 minutes per day in otherwise “lost” time is not at all unrealistic as I’ve seen this result time and time again with law firms that combine best practices with top-notch practice management or billing software. Can you afford not to maximize your billable time?
“Use a combined practice management and billing system that can search through all your appointments, tasks, phone calls, etc. to find entries that have not been billed.”
ABOUT THE AUTHOR John Heckman of Heckman Consulting (www.heckmanco.com) has assisted law firms with technology issues for over 25 years. John is a Certified Consultant and Trainer for Amicus Attorney and other software applications. He is widely published and authors the legal technology blog, Does It Compute (www.doesitcompute.typepad.com).
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