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Legal Implications of Improper Time Tracking
by: Bill4Time of Bill4Time  -  
Thursday, October 14, 2021

The implications of improper time tracking can impact your success as a lawyer. According to the 2020 Legal Trends Report, lawyers spend about 30 percent of the day doing billable work – leaving roughly two-thirds of the workday spent on non-billable time.

Lawyers can address this productivity discrepancy by meticulously tracking their time and maintaining detailed records. Unfortunately, many lawyers still rely on calendars, call logs, and outdated Excel sheets to track their time.

In addition to a potential loss of revenue, inaccurate or incomplete invoicing can result in overcharging a client. If this occurs, it could reflect poorly on the firm’s ethics and reputation at best, and result in a potential legal malpractice case at worst.

Why is accurate timekeeping with law firm billing important?

Billable time from working hours is a significant factor in determining growth for law firms and lawyers. These billable hours can be used to determine the value of fixed fee rates and the investment of time and effort. For individual lawyers, wasted hours in a workday could leak considerable revenue, especially over long periods of time. Lawyers that don’t pay attention to their non-billable hours can’t optimize productivity and ensure that they’re compensating for time and effort.

On an owner level, this can result in the closure of a law firm. Partners are paid in profit share, not salaries. As a result, they’re affected by the profitability of the firm and the liability that comes with ownership.

Depending on the structure of the firm or succession plan, partners may be personally liable when a firm dissolves. Any compensation a partner then receives may be lost in bankruptcy proceedings. Furthermore, if the firm dissolves before billings, they may lose the right to that money.

Benefits of Legal Time Tracking Solutions

Better productivity

Along with inaccuracies, improper time tracking can waste a lot of valuable time in its process. When you have to write down the start and end time for tasks and what and who they were for, that can add up over a day. With an efficient legal billing solution, it only takes seconds to start and stop tracking. You can also organize your dashboard by client, project, or task, saving time on logging the specifics of the work you’ve completed. All those minutes spent manually calculating billable time are condensed to seconds, freeing your time for more productive tasks.

Efficient legal billing

Time tracking software also shortens the time spent generating invoices. In addition to the time spent manually recording timekeeping, the firm’s staff must spend time collecting, tracking records, organizing them, and then billing. Legal billing solutions streamline this entire process and allow your staff to focus on other important tasks. Attorneys automatically enter time-keeping logs that sync with the system, allowing for efficient and accurate invoicing.

Accurate time tracking

Despite the time it takes, manual time tracking creates numerous opportunities for human error. Distractions, interruptions, and multitasking can disrupt the process, leaving you unsure of when you ended one task and began another. You have to stop to check times and fill in the blanks, which probably leaves more than a few mistakes in how you spend your billable day.

Comprehensive-time tracking software offers multiple billing options in one centralized location. You can toggle between tasks, clients, or projects quickly and conveniently without missing a beat.

Optimized billing

Time wasted with manual tracking and the potential for error should be enough, but this system also leaves a chance of overbilling a client. Handwritten notes are easy to misinterpret, especially with hurried handwriting. If your staff reads a note wrong and accidentally bills a client for extra time, your firm now has a liability.

Digital legal billing adds an extra layer of protection with improved accuracy. Your time is tracked precisely and automatically broken down into billable time, non-billable time, internal non-client time, and staff and contractor tracking.

More convenience

In the digital age, there’s no reason to work with outdated manual entry. Lawyers aren’t confined to an office with one computer. Instead, lawyers have the option to work on tablets, laptops, smartphones, home PCs, and more. Without a digitized time tracking system, it can be even more challenging to keep accurate records across devices.

Legal billing solutions offer secure mobile apps to track time, manage projects, and organize expenses, anywhere you are. Entries are saved if you’re offline and sync when you’re connected, so nothing is lost in the shuffle.

Enhanced security

Lawyers often handle sensitive information for clients. Paper is not safe or secure. It’s easy to misplace paper or leave it in view of prying eyes. You can also lose paper from your briefcase, on your commute, or during a lunch or dinner meeting. Paper is also easily damaged in the event of a disaster, such as a fire or a flood. If this happens, how will you bill for your time?

With a cloud-based legal billing solution, everything is stored safely and securely in the virtual space. All your vital information is backed up and stored, so even if your device is destroyed, you can still access your important task logs. This information is stored in data centers that are geographically distributed, powered by redundant systems, and protected by bank-level security standards, mitigating the risk of a breach or cyberattack.

Outsourcing insights

Though not directly related to revenue, digital timekeeping allows lawyers to investigate their billable time and their non-billable time. Many lawyers are tasked with business operations tasks, such as marketing, development, website maintenance, and more. A lot of time can be lost with projects that benefit the business, but don’t end up on an invoice.

When you have a comprehensive view of how you spend your time, you can make decisions about outsourcing tasks where you can, such as website design or marketing strategy. This can free your time to focus on the practice of law, rather than micromanaging the business operations for improper time tracking.

Eliminate improper time tracking with technology

Manual tracking can leave a firm or lawyer vulnerable in many ways. From revenue leakage to misplacing sensitive information to reputation damage from overbilling.

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