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Vol. 72, No. 12, December
1999 |
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."
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