One of the many reasons we believe NuLaw is worthy of your attention as a legal case management application is its built-in ability to easily track billable time. We realize how critical billable hours are to the average law firm. But guess what? Tracking non-billable time is equally important.
By non-billable time, we mean that time put in by your attorneys and support staff that isn’t included on your bills. It does not include work done by employees whose tasks do not relate directly to the cases your firm is working on. For example, IT and marketing staff. Though their time and effort should be tracked as well, tracking non-billable time is about getting a better handle on what goes into the cases your firm takes.
Here are five reasons to track non-billable time:
1. Understanding the Total Cost of a Case
Law is very similar to most other businesses in that there is always expended time that does not show up on customer invoices. In law practice, there are all sorts of matter management issues that do not get counted for billing. Yet it still costs the firm real money to do those things. Each of the matters contributes to the total cost of working a case. Therefore, you need to have a handle on how long it takes to complete them.
Understanding the total cost of each of your cases will help decision-makers better understand whether or not your rates are high enough. And who knows? A good analysis of total cost may allow you to reduce your rates for some clients.
2. More Efficient Use of Time
Another reason to track non-billable time is to give your entire team opportunities to manage whatever time they do have. In this regard, time tracking is a lot like budgeting. You don’t really know where waste is occurring until you start tracking how resources are being spent. Also like budgeting, tracking non-billable time makes it a lot easier to understand where precious time could be saved.
3. Better Planning for Attorneys
Keeping the budget analogy going, tracking non-billable time makes it easier for your attorneys to plan ahead. Just like a budget allows for better financial planning, tracking all the time spent on individual cases gives your attorneys a better understanding of what to expect in the future. This helps them plan accordingly. Attorneys who plan better are those who are more efficient with time and resources.
4. Fewer Write-Downs
Failing to keep track of non-billable time can create certain conflicts that do not show up until bill preparation begins. As bills are being handed from one team member to the next, write-downs become an issue. There can be so many write-downs just to get a bill to fall within agreed constraints that your firm ends up doing far too much work for free. This is never good position to be in.
5. Better Billing Practices
The fifth and final reason to track non-billable time is to improve your firm’s billing practices. For example, you may have a junior associate who comes on board and is not familiar with how your firm does things. What that associate deems non-billable time might actually be billable. You wouldn’t know his work was being done for free if your firm is not tracking non-billable time.
Every minute spent on a case equals money being spent by your firm. That’s why you need to track non-billable in addition to billable hours. Your firm needs to know how all of its time is being spent so that nothing is wasted.