■ This metric enables a firm to understand their completed Value Funnel, rather than first gaining visibility when a time entry arrives in the billing system. This measurement allows for better utilization, profitability, and capacity planning. My company Laurel is at the forefront of capturing and exposing this data which has never been available to firm leaders.
2. Time Entry
● Role: Attorneys and Paralegals
After performing work on client tasks, the attorney or paralegal must convert the time worked into an official record in the form of a billing entry. These “atomic units” of a client bill account for time spent in increments of an hour based on agreement with the client. A common increment is “one tenth” of an hour (0.1 hour), representing every six minutes of work. Some increments can be as detailed as “hundredths” (0.01 hour) representing an accounting of every minute of time spent. As you can imagine, this step is tedious and error prone. Lawyers without a tool to help them capture and record their time spent often resort to starting and stopping manual timers when they switch tasks, keeping notes of the time, they spend in Microsoft Excel, and/or looking through digital artifacts (e.g. email outbox, calendar, etc.) to recreate their time.
The attorney logs details on the tasks performed, broken down by activity type (e.g., research, drafting, client calls, etc.), and describes the work completed in a narrative format so their client can understand what was done. Some firms and clients also require the timekeeper to apply phase, task, and activity codes that help further classify the entry for ease of understanding by the client and deeper analysis by the firm.
The process by which time begins its monetization is kicked off when a time entry is submitted to the billing system by the timekeeper. Time spent working that is never submitted for billing is lost potential revenue. This time/revenue is “left on the table,” causing firms to question “the why” behind these lapses in time recording, or explicit decisions by the timekeeper to not bill for the time.
● Role: Legal Assistants/Support Staff (not all situations)
At some firms, legal assistants may help attorneys remember to log their time or perform timekeeping on behalf of attorneys, using key contextual information from the attorney to accurately represent the work completed. After this task is completed, the attorney will review the time and ensure its accuracy.
● Key Metric(s):
○ Lag to Create Entry: Amount of time between client work being completed and billing entry being created.
○ Lag to Release Entry: Amount of time (days) between billing entry creation and release (submission) to the billing system.
○ Granularity: # of entries released per workday. An increase in this metric can help defensibility of client bills by showing added detail of each discrete task completed.
○ Utilization: % of time spent doing billable work. Other types of work are: non-billable, administrative, pro-bono, etc. While some of this work is extremely important, it is not directly revenue-generating and thus the law firm wants to measure % time spent on billable work.
○ Daily Timekeeping Ratio: ratio comparing number of days worked and number of days where timekeeping (entry creation) takes place. This metric gives insight into how many days are building up before a timekeeper recounts their time and generates entries. The longer a timekeeper waits to “recreate” a timesheet, this can lead to slippage, lack of detail, and loss.
3. Review and Approval of Time Entries
● Role: Supervising Attorneys or Project Managers
Senior associates, supervising attorneys, or project managers review time entries to ensure they meet client expectations and firm guidelines. They check for accuracy, compliance with billing guidelines, adjust any entries if necessary, and follow up with the timekeeper for clarification as needed.
There are additional rules to the monetization of a time entry, written when the matter is set up and agreed by the Firm-Client relationship. An example of this would be the fee agreement, in which the Firm and Client consent to some combination of time and materials (hourly), fixed fee, hybrid, and contingency. Other examples of Firm-Client agreements are: how time should be recorded, what can and cannot be billed to clients, standard billing rates, invoice format and content requirements, and expense policies.
● Role: Billing Coordinators or Billing Specialists
In some firms, billing coordinators or specialists may run an initial audit to identify entries that could be potentially problematic (like excessive time on certain tasks) and flag them for further review. This sends the entries back to their timekeeper for revisions.
● Key Metric(s):
○ Internal Write-Down: Amount of worked hours reduced or removed from a potential bill before it goes to the client. Measured in hours and dollars (when the billing rate is considered) and can be measured as an absolute amount, per entry, or per hour worked. Write-downs can be done by:
■ Timekeeper at point of entry, often called “self-auditing” or “voluntary write-down.” Can be identified on a billable time entry by the difference between time worked and billed.
■ Their supervising attorney if they believe the work should not be charged for, the client will not pay for it, or to build goodwill with the client.