Managing Risk: Careful Timekeeping Pays for Itself
Spending a moment to record your time is one of the best investments
you can make. Here are six reasons why.
By Ann Massie Nelson
There's an old joke about a lawyer who dies and appears on the
doorstep of heaven. St. Peter exclaims, "My, you're in remarkable shape
for a fellow who is 145 years old." The lawyer says, "What? I'm only
68." "You can't be," says St. Peter. "I have your time sheets to prove
it!"
Keeping precise, up-to-the-minute time sheets is
a painstaking chore, a housekeeping duty that most lawyers would just as
soon put off. But poorly kept time records can cost enormously in lost
revenue, client dissatisfaction, and malpractice or ethics
complaints.
Your time sheets probably won't guarantee you admission to the bar in
the hereafter, but there are six reasons why you should keep scrupulous
time records, even for contingency fee cases or flat fee transactions.
According to Thomas S. Sleik, a partner in the La Crosse firm of Hale,
Skemp, Hanson, Skemp & Sleik, good timekeeping:
1) Informs and reassures clients. Time records allow
your firm to produce itemized bills that educate clients about the legal
process and show the time and effort you have spent on their behalf.
Rather than dashing off a one- or two-line bill for "estate plan
preparation," send an itemized bill that impresses the clients with the
time you spent interviewing clients, inventorying assets, researching
applicable federal and state tax laws, drafting of will and trust
agreements, and so on. (Note the use of verbs to show action.)
A monthly, itemized bill also assures the client you are working on
his or her behalf, even if resolution of the matter is months away.
Conversely, the client can question or comment on your activity before
you get too far off the path with services or expenses the client feels
were unwarranted.
2) Documents what you did, when. Time records
memorialize what tasks you performed, the minutes or hours involved, and
the sequence of events. Make it a habit to document your time
immediately after the client walks out the door, when you hang up the
phone, or when you put away the file. Trying to recreate time records at
the end of a week (sometimes even at the end of the day) will result in
errors.
Software makes timekeeping task easier
Timesaving tools can take the drudgery out of timekeeping. Several
time and billing software programs have been developed specifically for
law firms. The Hale, Skemp, Hanson, Skemp & Sleik firm in La Crosse
has successfully used TABS III by Software Technology Inc., (402)
423-1440. For reviews of several other time and billing programs, see
the Minnesota
Lawyers Mutual Web site.
"Memories fade. If things go south with a client, detailed time
sheets could substantiate your memory in the event of a malpractice
claim," Sleik says. One of the first things the former client's new
counsel requests in prosecuting legal malpractice claims is a copy of
the attorney's time records.
3) Helps you measure your productivity. Where did
the time go? Your time sheets have the answer. Sleik uses an automated
timekeeping program that allows him to easily analyze his time use. For
example, he can get a report showing billable versus nonbillable hours,
time spent on contingency fee matters, percent of time devoted to
different areas of practice or to firm activities or administration,
hours spent working at different rates, and so on.
4) Provides a basis for reviewing associates' work.
In large group practices, time records are useful in determining
compensation and promotions, but Sleik recommends you look beyond
billable hour quotas when analyzing associates' time use. How
efficiently are associates using their time? Why is a new lawyer
spending a majority of his or her time in one area of practice? What
nonremunerative responsibilities do associates have? Do you encourage
associates to report pro bono work? Are your associates meeting their
continuing education requirements?
5) Reduces staff time and potential confidentiality
breach. "My secretary, who has been with me for 26 years, had
to set aside two hours every Friday to transcribe paper time sheets for
one other attorney and me. When we installed computer terminals in
attorneys' offices about 10 years ago, she pointed out that I could
enter my own time records as quickly as I could write them on a form,
giving her two extra hours a week for more productive work," says
Sleik.
Lawyers who enter their own time records can use their judgment in
describing the services provided. Because time entries often are merged
directly into billing statements, staff members may inadvertently reveal
information that the lawyer would not want to fall into the wrong hands.
If the representation involves a government entity, the lawyer's bills
may be revealed under the Open Records Law. Detailed time records could
reveal litigation strategy and jeopardize the client's position.
Ann Massie Nelson
is communications director at Wisconsin Lawyers Mutual Insurance Co.,
Madison.
6) Contributes to firm profitability. Lawyers who,
one or two weeks later, try to reenact time spent on a file are more
likely to undercharge the client than overcharge. Even with contingent
fee cases or flat fee transactions where you might think timekeeping is
unimportant, you need to record your hours to analyze case selection,
Sleik points out.
If you put off recording your time, you may need to do a little soul
searching. Do you value all your time or do you write off certain tasks?
Do you feel ambivalent about helping clients (particularly those with
limited resources), then billing your hourly rate? If work isn't done in
a traditional setting, do you neglect to record the time because you
feel it wasn't "real" work?
"You can't bill for everything," Sleik says. "At the same time, don't
sell yourself short. A chance meeting with another lawyer while you are
waiting at the courthouse may turn out to be very valuable to your
client. Sometimes, short services have long results."
Wisconsin
Lawyer