When studying law, there is no playbook on how to run a successful law firm. You know the rules of law, but often not the rules of business success. At Smokeball, our goal is to show you how you can manage and grow a profitable legal practice.
Lawyers often tend to put in very long hours because this translates into successful cases and happy clients. What we fail to do is accurately record those hours and actually, get paid for them. So, let’s address the poisonous seed that grows into a catastrophe for most firms – uncaptured and unpaid time.
Time Tracking
Most lawyers fail to track their time because it is tedious, or they are too busy to do so simultaneously. Further, while they know their staff are busy, they cannot determine what hours were spent on what matter and if that matter was a profitable use of time.
Without accurate time tracking, it is difficult to keep track of billable hours. For a firm that bills by the hour, that lost time is lost potential revenue. Even if you bill a fixed fee, uncaptured time is detrimental to your business. How does not tracking time impact your law firm?
1. Client Invoicing and Reporting
Accurate client reporting is vital to maintaining satisfied client relationships. If a client does not get an accurate account of their legal representation at each step, such as drafting an important document, that client may feel like their lawyer is not advocating for them or is incompetent. This can lead to dissatisfied clients. Show your clients the hours you put in for them. By doing so, it shows them the value you provide.
2. Staff Performance and Success
Knowing what all team members are contributing and if they're contributing to the right things is the difference between profitability and failure. Successful law firms will often review the work their lawyers and paralegals have done the previous day. If time is missing, management may incorrectly believe staff have a light workload and give them more work they cannot handle. The impending result of this – overburdened staff, errors and potentially lost cases.
3. Lost Revenue
If you bill by the hour and you're failing to capture completed work, you will see the direct correlation of that with your revenue stream. If you bill on a flat fee without realising that time is underreported, you will likely assign a lower fixed fee. This is not only lost revenue but also a perception of the quality of your work. As the saying goes “you get what you pay for”, and clients may view a lower rate fee as inferior work.
Regardless of how you bill, accurately reporting time has a direct impact on the bottom line, yet many firms do not realise the severity of poor time recording. Multiple industry studies have shown that law firm fee earners on average only bill 2 hours of the business day. Think about that as you are approaching your 12th hour of work.
So how do law firms survive when they are only billing 25% of their time? They find a way to make time reporting more efficient and effective with Smokeball’s revolutionary automatic time and activity tracking software - AutoTime. Any work completed within Smokeball is automatically recorded and applied to the relevant matter. AutoTime removes the tedium of manual time recording while providing accuracy.
Smokeball integrates seamlessly with Word and Outlook, so the time spent drafting a particular letter or reviewing an email will be captured. Business owners can leverage law firm analytics and insight reports in Smokeball to gain transparency into the work staff are completing, so they can effectively manage everyone’s workload.
AutoTime takes time recording a step further by automatically adding these recorded time activities into client invoices for easy law firm billing. Firms using AutoTime bill over 4 hours per day vs. the 2 hours billed on average. This increase equates to an extra $135k of earnings per fee earner, so now firms can obtain substantially more revenue from these invoices.
As the saying goes, time is money when it comes to growing your law firm. Regardless of how you bill, accurately capturing and invoicing time can result in more satisfied clients, staff success and increased revenue. All of those factors are critical to a thriving legal practice.
Your next steps
Contact us to see how our automatic time tracking combined with best-in-class legal productivity software will transform your law practice.
