Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a small estate planning/administration law firm in Louisville, Kentucky. We are having a hard time getting a handle on determining the productivity of our associates and paralegals. Many of our associates and paralegals work part-time and the typical metrics such as 1500-1700 annual billable hours, etc. don't work for us. Do you have any thoughts or suggestions?

A. You might want to consider using a billable/worked ratio which is the ratio of billable hours logged to hours worked. For attorneys and paralegals that are totally focused on providing client services a good benchmark is 70%-73%. If an attorney or paralegal works 30 hours a week - you would hope to see 21-22 hours billable per week. Based on 50 weeks per year this would equate to somewhere around 1050 billable hours per year. For a full-timer working 8 hours a day or 40 hours per week - 50 weeks per year this would work out to around 1400+ hours per year. Most full-time attorneys work closer to 50+ hours a week and are expected to log between 1500-1700+ hours per year. The expectation for full time paralegals is around 1400 hours.

The 70-73% ratio is ambitious - but is achievable. For paralegals this goal will not be possible if they are loaded down with administrative duties. Excellent time management and time keeping skills and practices will need to be in place as well.

While billable hours are a starting point, you also need to examine the impact of write-downs of work (adjustments prior to billing) and write-offs of bills that have been rendered to clients. In other words - what got billed and what actually was paid. Examine the billing and collection realization percentages and or the realization or effective rates for these people as well.

In addition to dollars you should also factor in quality and speed of work as well as client satisfaction scores.

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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact