Law firms are certainly not immune to the effects of the economic downturn. As is the case in most of corporate America, cost-cutting measures must be considered in all areas of the firm from office space, to travel and expense policies, to staff size. Along with a scrupulous review of the billable time per attorney, firms need to take a hard look at their operations, including process efficiencies and employee utilization. An often-overlooked area of opportunity for improving efficiency and reducing overhead is the non-billable staff time and attendance process.

 

Take a Closer Look

How does your firm track and manage non-billable employee time? What about vacation time, sick leave and over hours? Surprisingly, for most firms the answer is “paper.”

 

The cost of maintaining a manual time and attendance process can be quite daunting. It is important to note that this cost goes far beyond the one or two people in the payroll department. Though the process undoubtedly varies from firm to firm, it is inevitably time and labor intensive, involving staff, supervisor, attorney, accounting and HR staff time. A typical firm using a manual system will complete the following steps per employee for each payroll cycle:

·           Completion of time sheet by employee

·           Routing of time sheet to attorney and/or     supervisor for review

·           Review and approval of time sheet

·           Copying and filing of signed timecards

·           Routing to payroll

·           Totaling timesheets

·           Verifying calculations

·           Keying data into payroll system

·           Checking/rechecking for errors

·           Entering of sick leave and vacation time to HR system

·           Processing paychecks

 

Clearly, for many firms the staff payroll process is a time and resource drain. This cycle is complicated even further when employees turn timesheets in late, disrupting the flow and often necessitating the processing of manual checks. Additionally, the keying/rekeying of information in up to three different systems (i.e. payroll, HR, accounting) is prone to error and can greatly affect accuracy and cause hours of correction time. Further, management of vacation requests, sick leave and over hours slows down the process and drains resources even further, with HR and payroll staff spending valuable time answering employee questions about available vacation and sick time. The estimated costs for the steps shown above range from minutes to hours per employee, per paycheck. In fact, when looked at from a firm-wide perspective, the amount of employee time spent on this process can mean tens of thousands of dollars each year–time that would be better spent on more profitable business activities.

The Benefits of Automation

For years, increasing ROI objectives have lead CIOs and IT Directors to implement self-service solutions for attorneys, with applications for time entry, legal research, billing information, knowledge management and library services made accessible through firm portals or intranets. The business case for automated staff time and attendance is profound, as was the case 10 years ago for billable time, when a once manual process was transformed by electronic time entry. As the applications matured and attorney resistance softened, paper timesheets for billable time were practically eliminated. The implementation of these systems has allowed firms to remain competitive by giving billable timekeepers quick access to pertinent

information while reducing overhead and improving overall profitability.

 

Similarly, self-service applications for non-billable staff can derive these same benefits. By allowing employees to electronically submit timesheets and giving them access to information such as accrued vacation time, significant process improvements will be realized and the associated costs will be reduced. The implementation of an electronic staff time and attendance system can streamline the process, cut down on administrative time, and improve accuracy and efficiency through integration with leading HR, accounting and payroll systems. Plus, because most of these applications are web-based, they can be quickly and easily added to each staff member’s desktop or accessed via a firm portal or intranet, making rollout extremely cost effective.

 

Should Your Firm Make the Move?

Implementing a staff time and attendance system improves efficiency, increases accuracy and usually pays for itself within 12 months. Before shopping for a system, your firm should assess the following:

~          How many hours does your firm’s non-billable staff, supervisors and accounting department spend each payroll period on the following:  filling out time sheets; tracking down missing timesheets; timesheet approvals; totaling timesheets; and payroll preparation? Overall, how many hours are spent each week that could be allocated to more productive business tasks?

~          What is your firm’s payroll error factor? What is the process for correcting those errors? How many people are involved in that process? How often are manual checks issued to correct these errors?

~          How is your firm tracking vacation time, sick leave and over hours? Are the accrual rules and rates assigned to these categories being applied accurately and fairly? How much time do your firm’s supervisors spend responding to employee requests regarding remaining leave time?

~          Does your firm re-key employee information into more than one system?

 

Lastly, consider the costs of not implementing a system. As John Green, CIO at Baker Donelson, who recently purchased and implemented a staff time and attendance system put it, “I feel strongly that in this day and age, with all of the technology available, it’s unconscionable to spend so much time on manual processes. Any firm that examines its current time and attendance process is likely to find that there are countless inefficiencies occurring daily that automation will solve. No firm wants their employees spending time on redundant tasks that have no direct value to the organization.”

 

About our author . . .

Jane Trombly is Vice President of Advanced Productivity Software (APS).  APS provides time tracking software designed to enhance its customers’ productivity and profitability, including DTE™ distributed time entry, LookUp™ for research cost tracking and recovery and RollCall™ for staff time and attendance.