For law firms, time is quite literally money. With a finite number of billable hours in a day, the way you structure, track, and plan for time can make a significant difference in areas across your legal practice.
Beyond accurate time management, incorrect timekeeping has far-reaching consequences for:
- Company profits
- ABA compliance
- Staff management
- Client trust
The best way to improve all of the above? Implementing time-tracking software for attorneys.
Six benefits of accurate legal time tracking software
Time tracking is key to accurately staffing and allocating resources for every facet of firm operations. Here are six major benefits of proper time tracking, and how you can step up your system today.
1. Track and plan matter budgets
Because law firms build matter and case plans based on previous experience and knowledge, it can be difficult to scope projects correctly without accurate background information for similar tasks. If your firm chronically under-tracks time, then team members will consistently fall victim to underfunded projects and impossible timelines. Crucially, this can also negatively impact the client experience (and ultimately, client satisfaction).
Under-tracking time doesn’t just impact billable hour projects, either. For non-billable business operations, under-budgeted projects lead to wasted work, inefficient systems, and poor project rollout.
No matter how you frame it, knowing how much associate and partner time is needed for a project will have a significant impact on a matter’s overall success. Otherwise, you may not have the time and resources you need to succeed.
Using an attorney time tracking software like Tabs3 helps your team track time in as little as two clicks. Once you’ve recorded time, you’ll be able to benchmark future projects against that time, so you budget appropriately.
2. Allocate resources accurately
Similar to budget allocation, historical project data is critical to accurately allocating resources for billable and non-billable initiatives in a legal practice. An underestimated project will take up more than the projected time, costing the firm more money and potentially leading to stressful working conditions for attorneys and staff.
On the other hand, if a firm overestimates necessary resources, it can have the opposite problem. Projects can be overstaffed. If staff time isn’t allocated correctly, it can cost associates and partners much-needed billable hours. What’s more, other client work may suffer and profitability can decrease across the board.
Tabs3’s legal time tracking software not only helps you track time, our built-in journal function allows your team to keep detailed notes on each matter. This is vital for budgeting time for future tasks, as notes can inform where the most time was spent and how that can be expedited in the future.
3. Set profitable rates and fee structures
Many firms provide different fee structures to cater to client needs, including flat fees, retainers, fee splitting, and contingency.
If your firm uses flat fees or task-based billing, your profitability depends on accurately pricing your services based on how much time a matter will take to resolve. Without accurate legal time tracking software, you could be severely underselling your services. It’s as simple as that.
4. Maintain compliance with ABA regulations
Beyond your own firm’s needs, time tracking is essential to maintaining compliance with ABA Model Rules of Professional Conduct 1.5, 1.6, and 1.15.
Per the American Bar Association, improper attorney time tracking can lead to serious ethical dilemmas, disciplinary measures, and even disbarment.
It’s important to note that compliance matters for every team member, not just partners. According to Model Rule 1.5, firms can only charge reasonable fees (the definition of which varies based on several factors). If an associate charges a client unreasonable or padded fees, they are accountable for their actions, even if they were directed to do so by a supervising lawyer.
To keep this issue to a minimum, the ABA suggests that legal staff, especially new lawyers, take care to review bills to avoid allegations of padding, especially when logging time for multiple cases at the same time.
The ABA’s top tip for compliance? Use a desktop- and mobile-friendly time-tracking tool as part of a larger practice management system for accurate billing practices. With Tabs3, turning a legal timer on and off is so easy that it will become muscle memory.
5. Improve client relationships
As previously noted, padded fees and invoices are a serious breach of ABA regulations. Beyond the risk of disciplinary measures, improperly tracked attorney time can compromise client trust, and trust is the cornerstone of strong client relationships for a law firm. Clients come to law firms to deal with serious and often stressful legal matters. They need someone they can trust to resolve their matters. If your firm loses that trust via padded billing practices or unreasonable fees, it’s nearly impossible to get back.
On the other hand, consistent, transparent time tracking and fee structures promote open and honest communication which will lead to increased client satisfaction stemming from the level of transparency regarding pricing. This level of understanding fosters mutual trust, which is key to a law firm’s long-term growth.
6. Better understand your staff’s performance
Attorney time tracking is an important measure of your firm’s efficiency and productivity, and it tells you how much staff worked on specific projects, or with certain clients. In addition to the financial, ethical, and reputational risks associated with derelict legal time tracking, inaccurate time tracking can hinder your firm’s ability to support staff who may need more help and reward staff who go above and beyond.
All of these factors play into performance reviews, employee recognition, fair compensation, and keeping track of potential high or low performers at your firm.
How to improve your firm’s time-tracking system
The biggest way to improve a firm’s time-tracking system is to implement automated time tracking throughout the day, rather than tracking time at the end of the day or week.
According to the ABA, lawyers who wait until the end of the day can lose 10% of their billable time. For lawyers who wait until the end of the week, that number goes up to a 25% loss of billable time.
We get the pushback: attorneys are busy, and they don’t want to be distracted by turning timers on and off. However, modern legal time tracking software like Tabs3 is incredibly easy to use. It takes just two clicks to start or stop a time, and it can be managed from your computer or phone, meaning your ability to track billable hours isn’t tethered to your desk.
Simplify your time tracking with Tabs3 Software
Nobody wants tedious, menial tasks added on top of day-to-day work. But attorney time tracking doesn’t have to be that way anymore. Today, attorney time tracking software like Tabs3 make time tracking simple and help firms save time later by automatically translating tracked time to bills.
To see how we can help transform your time tracking and firm productivity, schedule a demo today.
