1st Year Associate Guide To Managing Billable Time

Billable Hours

It will also allow all of your employees to spend more time on higher-level, more profitable tasks. If you are still looking for the best way to track, you don’t want to miss Forecast’s massive Utilization report either.

This list should contain all the latest news about your current project. For instance, if someone needs approval from you, or any additional data, they should include it in that list. When running your own business, there will be situations when your employees will need your help with solving an urgent problem. Sometimes, you’ll have more than one issue to figure out, which can be incredibly stressful. Related articles on how to run a more efficient, profitable law firm. You may be tempted to round up to an even hour when billing, but padding hours unnecessarily is inaccurate and unethical.

How Many Billable Hours Is Average?

But this is an area where careful record-keeping will save your law firm quite a bit of money, once it’s all added up. The average billable hours for an attorney range between 1,700 and 2,300 hours. Your employee utilization rate is the percent of time that any employee or department is billable. Executives and other members of the leadership team will have a lower utilization rate than a junior-level employee who is grinding out client work every day. Tracking employee time can tell you what the difference between those rates should be.

One exception is the legal industry, where many attorneys are required to work a certain number of billable hours each year. Legal professionals who fail to hit that number or a close milestone can be fired. If you spend four hours balancing a client’s books, and you’re paid by the hour, you have four billable hours. However, you have to have a record of your time worked to bill that time to the client. And that’s just one step to recording and being paid for billable hours.

  • Non-billable hours are all the other hours spent running your business or working on tasks that are not directly related to a specific project.
  • But, there’s also a certain weakness of a utilization rate system, especially applicable to consulting businesses.
  • According to research firm McKinsey, 45% of the activities people are paid to do — from entry-level workers to those in the C-suite — could be automated with lower-cost technology.
  • Including all this information can be tedious and time-consuming.
  • Remember my lawyer, who – no offence – I have zero interest in talking to unless absolutely necessary.
  • Billable hours are the hours you spend doing tasks for a particular project.

To open the page, use the path in the Security and navigation section above. The weekly billable hours values appear in the rightmost column shaded in blue. Billable hours are the nr. of hours spent working on a specific project and client.

Set An Hourly Rate

Many of these firms would argue that this isn’t really a billable hours model at all – and they may be right – but it is the peak evolution of the gun-for-hire consulting model that drives many industries. Try to track your time spent on non-billable tasks in addition to billable tasks. You can later review your non-billable time to find inefficiencies in your workdays. For example, you may realize that you spend too much time taking coffee breaks. If you cut down your coffee breaks, you can use that time to work on billable tasks.

They’re important because they contribute to the overall success of the business but aren’t related to a single project. Therefore, you can’t charge these hours to a particular client. Aside from that, it will also show you if your time spending stays within the limits you’ve set, which makes it easier to catch runaway activities that could cost you a lot of money in the long run. It’s no industry secret that time tracking is already considered a must-have tool at your belt. A software developer or attorney that is capable of working a total of 180 hours a month won’t be able to bill all of his time. Now picture that in the context of running a software development company that estimates writing code based on a full 8-hour workday.

We’re the world’s leading provider of cloud-based legal software. With Clio’s low-barrier and affordable solutions, lawyers can manage and grow their firms more effectively, more profitably, and with better client experiences. We’re redefining how lawyers manage their firms by equipping them with essential tools to run their firms securely from any device, anywhere. Whatever the case, registering time and keeping track of billable hours is paramount if you want to know what to expect from your projects in terms of timing and budgeting. Depending on the industry, project, and collaboration details, you might have to either include only billable hours in your tracking sheets or both, billable and non-billable ones . Here is a list of tasks and activities that could get included in the average billable hours template.

Billable Hours

Use detailed but succinct descriptions to ensure clear, transparent billing. Descriptions should provide enough essential information for clients to understand what they’re paying for. Block billing means grouping various activities under one single time entry.

Biglaw Firm Tells Lawyers To Bill Clients For Time Spent On Toilet

In addition to missing out on time you could bill, you may overbill a client, lose sensitive information, make a detrimental error, cost your firm money, ordamage your reputation. Not every company can afford the ante to engage the top-end-of-town consultants. And those that do, often fall into the trap of feeling like it’s just monopoly money. Having said all of that, your ability to tap into and hire skills that you don’t have internally, is absolutely critical to being able to build and grow a profitable and sustainable business. In these days of Airtasker and Upwork, expert services are readily available and affordable to any business, regardless of size. For example, because you don’t have to worry about staff retention, capability, building and talent management in an area that you’ve outsourced to a service provider, it’s easily overlooked. We assume that the big service firms are doing this diligently and competently – but trust me, that is a big assumption.

When new lawyers and law students ask “How many billable hours in a year they will I be expected to work? ” they realize that it’s a lot of hours and that it can seem very difficult to track that time, especially when almost every minute must be productive and profitable.


Although those activities are essential and make an integral part of the daily agenda, it is best to do proactive resource management and help your people reduce the number of their non-billable hours. In pragmatic terms, those hours mean that your team makes less money for the company, while for your clients it means that projects might take a little longer than they otherwise would. But knowing how to keep track of billable time can be a tricky business. Furthermore, billable hours often do not encompass all of the work that employees are required to do, for example excluding work for the firm that is not billed to a particular client.

Billable Hours

Billable hours for a particular client or project may also be pooled. That can enable more effective use of human resources and less expense to the client. For example, a project manager might have a rate of $1,000 a day but employees assigned lower rates may do much of the work for a given project. The client may be charged a combined rate based on the billable hours of all employees involved in the project. The utilization rate calculates billable time as a percentage of an employee’s total working hours.

Remember, billable time only refers to project-related tasks, so a client call is billable while a call with a colleague unrelated to the project is not. Some positions require the use of billable hours, and your company may have specific policies or requirements in place. These policies may provide guidelines to help you determine what constitutes billable time.

Track Your Hours

Be sure to account for disruptions in employee schedules, such as vacations, holidays, and shorter months. Browse US Legal Forms’ largest database of 85k state and industry-specific legal forms. However, it will impact the project’s overall timespan and how much revenue will be generated monthly. When a Florida law capped an attorney at $1.53 an hour, the Florida Supreme Court finally stepped in and called shenanigans. The number one thing for a service provider is to ensure the focus on long term relationships and customer value is emphasised, despite the short term pressures. This means that if you manage things really well, you can capture value by attacking the low hanging fruit, but it’s ultimately just a short term sugar hit.

For example, if we take a software development company, the client will be charged for the research, product development, project planning, client communication and obligatory meetings, revisions, etc. If you don’t track your time, you tally up your billable hours for the quarter or at six months and realize your goal is now impossible. You didn’t reach your billable hours in the past few months, so now it’s unlikely you’ll have the time or work to reach those 2,000 hours.

  • Below are nine ways you can increase your profit margins when you track billable and non-billable time.
  • With a strong focus on convenience, Bill4Time offers online access to your account and mobile apps anytime, anywhere.
  • In the billable hours world, supplier companies deliver services to client companies in an exchange of time for money.
  • Managers can reduce time spent following up with employees using timesheet completion reminders.
  • Billable hours also help to avoid any possible misunderstanding with clients as the matter of who is doing what.
  • But you won’t know the value of your non-billable hours if you don’t track them at all.

To his credit, the CEO of the tech firm held true to his word on a project that clearly wasn’t profitable for his company. To this day, I have a huge amount of respect for his commitment and his integrity.

We help you do right by your clients and get you home for dinner on time. This tells you how many staff you need to complete a project, the critical areas for improvement, and, additionally, highlights any gaps so you can meet the agreed deadlines. How to create a project timeline (+ free templates) Learn what project timelines are, how to create a project timeline, and download 10 free project timeline templates you can use for this purpose…. How to make a work schedule (+ work schedule templates) Everything you need to know about creating a work schedule for employees, including free scheduling templates for busy managers…. Think about your branding strategy and overall company performance. As a business owner, you can organize a quick all-hands meeting every week. This would be a terrific opportunity to discuss your branding strategy, plan your future moves, and exchange your ideas on how to achieve better results.

For a manual time log, you can create a spreadsheet to track the projects you worked on, the dates and hours you worked on them and the tasks you completed during that time. Non-billable hours are hours that a law firm’s client should not pay for. These include truly wise Billable Hours time investments such as continuing legal education, networking, and rainmaking, for example. Non-billable hours also include timekeeping , other administrative functions, and errands, for example. You shouldn’t think of non-billable time as time that wasn’t valuable.

If a non-administrator needs access to this report, create an Administrator permission template with only Target Billable Hours assigned, and assign it to the user. However, a high utilization rate is a big priority among professional services companies. For example, Steve, a freelance web designer worked a total of 7 hours on Tuesday. Out of which, 5 hours was spent creating a web page for Company XYZ and the remaining 2 were spent on learning new design tools.

Smalllaw Billing Maxims I E, Get Paid!

Studies of lawyers suggest that high billable hour requirements exacerbate the difficulties women have in practice, especially for those women who have family responsibilities. This leads to high dropout rates from law firm practice that hurt both law firms and their clients. Lowering billable hours will increase the possibility that women will succeed in these workplaces while making lawyers more efficient.

These issues could happen due errors in pricing systems, or due to duplicate work, and etc. Saviom, a resource management and workforce planning software. Regarding billable hours, Saviom can help managers better understand their employees’ workflows, projects, and productivity.

Yet, many business owners tend not to track their billable hours properly or underestimate them. Both billable and non-billable hours should be treated like a precious resource and tracked and scheduled accordingly. In addition, specifying which tasks are billable and which are not will help you make more informed choices on how time is allocated. Knowing how much time per month you and your team are spending on meetings, answering e-mails and taking phone calls, is the first step to improve overall efficiency and productivity. If the user wants to do that from the Personal Cabinet, he/she will have a great bonus – Timetracker, which helps to calculate the exact time spent on the specific task. The user needs to click on the time tracker and when work is done just click stop. After that, the ‘Log Work’ dialogue with filled data will automatically open.

It is fundamental to distinguish and measure these types of hours. While billable hours generate revenue for your business, non-billable hours are still important to keep the business running smoothly. However, although both are relevant, it is necessary to calculate and balance them out appropriately in order to create an adequate fee structure. End users can view progress to billable hours targets in their timesheets. This feature is available to those using the legacyTimeBill and RepliconPSM products and the new TimeBill Plus and Professional Services Automation products. However, only the configurable timesheet offered in the new products supports the bar graph that displays billable hours progress to resources.

You can also create and edit batch invoices, and clients can review and pay invoices online 24/7. Depending on the requirements of your firm, you may be able to set your own invoicing schedule.

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