The Lawyer's Office

Billings are among the most important avenues of client communication. Inaccurate, vague or delayed billings can cost more than yesterday's time, and can also cost tomorrow's business.

Here are eight ways attorneys lose legitimate billable hours, and how they can re-capture them.

Problem 1: The Periodic “Reconstruction.” Reconstructing hours at the end of the day may lose you 5 to 10 percent. Waiting a week can lose as much as 15 to 25 percent.

It is virtually impossible to accurately reconstruct work done more than a day ago. The big pieces may get recorded, but most of the smaller pieces – momentary conversations, e-mail responses and impromptu meetings – will be lost, even though each was legitimate client work.

From the ethical side, trying to reconstruct work done more than a few days ago is an exercise in fiction-writing that may be imprecise and possibly erroneous.

Solution 1: Track Your Time Concur-rently.

The most obvious solution is generally the most hated. But is it more enjoyable to not get paid for up to one-fourth of your work? Is a 10 to 25 percent increase in revenues worth a change of habits?

Reduce the struggle by obtaining a separate dictation machine just for recording time. Carry it with you at all times.

Dictation is less intrusive and more explanatory than software or writing time sheets, and can be done anywhere – in the car, on the train, at home – to help you capture more time.

Problem 2: The Good Client Courtesy. “It was just a two-minute call, and she's a good client; I won't nickel-and-dime her.”

How many calls do you not record in a given month? How many of them contained important information or valuable client interaction?

Solution 2: Record It. Always. Record everything you did, without judgment and decide only once, at pre-bill, what to bill or comp.

Ethically, professionally and financially, recording everything is the only choice. That way the client has full information on your work and sees what you have decided not to charge for.

Problem 3: The Interruption.

How many times have you hung up the phone and were immediately attacked by a team member with a question, or dashed out of your office late for a meeting? Such interruptions cause you to fail to record your time, and often it's lost forever.

Solution 3: Keep Your Door Closed. Train your team to honor this, and to hold non-urgent questions for regular daily meetings or specified open-door times.

Designate non-call times and have your assistant take messages, facilitate or pass on calls to your team. Then designate a call-return time, instead of returning calls on the fly. No matter how rushed, always take the 30 seconds needed to dictate time.

Problem 4: “I Was in Lala Land.”

You've worked for four hours, but you've been unfocused and unproductive. So you write down three. Or two. After all, “I didn't get much accomplished, so I can't very well bill for it!”

Solution 4: Record It All Without Judg-ment.

A certain amount of unproductive wandering around is often necessary. Your brain is processing unconsciously even when you're not very conscious.

Three hours of wandering around often leads to one flash of inspiration. So write it all down and save that judgment for pre-bill stage.

Problem 5: The “WIP” Black Hole.

Many lawyers just don't get around to billing some clients, especially when there has been little progress, or it's a “D” client. So the bill waits a few months and accumulates, and the client's recollection of calls, meetings and so on gets dimmer.

Solution 5: Bill Monthly (unless the client says not to).

Remember that billings are a crucial part of client communications – possibly THE crucial part. It's the basic report to the client on your activity and what you're charging.

Delaying your billing is obfuscation, since you've done work that obligates the client to pay. Essentially, it's not an option to delay these reports unless the client specifically directs you to.

Prompt billings help assure prompt payment, because the client is more likely to remember recent activity and less likely to question items.

Anything less than monthly billing means the loss of the time value of money (you're playing banker for your client) and sets you up for the next problem area.

Problem 6: The First Write-Off.

The vague, reconstructed or delayed bill is sent. The angry client calls with questions, so you trim the bill a bit to placate, but really to compensate for your poor billing practices.

Solution 6: See Solution 5.

Problem 7: The Second Write-Off.

The unhappy “D” client negotiates your bill down again and still doesn't pay. You call again to ask for payment, and end up trimming the bill even more.

Side Note: At this point, you'd do well to ask yourself a question. Was that a “D” client in the beginning, or was it an “A” who went downhill due to poor communication, such as billing practices?

Solution 7: See Solution 5, but also re-examine your client intake process. Are you accepting “D” clients? Then scrutinize your communications and client service. Are you creating “D” clients?

Problem 8: The Final Write-Off. That “D” client who has consumed more unbillable time arguing about billing finally refuses to pay.

Should you sue for fees? Never, unless the amount is huge. If you do consider it, remember to add in the dollars, time and psychological costs of defending an unfounded grievance or malpractice claim, because both are the refuge of the “D” client.

Solution: None, except to review Solu-tions 1 through 7 for the next time.

Conclusion: It Takes a Perspective Shift.

For most attorneys, poor billing practices are actually a symptom of other problems: poor client selection, poor office procedures, office disorganization, poor team management, etc. Focusing on these areas can produce significant results.

But the larger solution is a shift in perspective. You must stop tracking billable hours and start tracking time. That's right. Record everything.

Don't make those moment-to-moment value judgments about billable or not billable. Simply record all of your time, and then make only ONE judgment each month about how much you're going to bill.

If you also record everything non-billable – administration, marketing, personnel – for a week or two, you'll learn more than you wanted to know about your work habits and time wasters. The awareness will have you operating a bit more efficiently.

The law – and the billable hour – are merciless taskmasters. You can reduce the misery by making sure you get paid for all of the hard work you do. Decide you're worth the 10 to 25 revenue increase.

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