Time is money—especially when it comes to how many billable hours in a year an attorney can accumulate. Lawyers work hard, and they work a lot. Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year.
Firms “average,” “target” or “minimum” stated billables typically range between 1700 and 2300, although informal networks often quote much higher numbers. The NALP Directory of Legal Employers (www.nalpdirectory.com) contains billable hour information in the “hour and lifestyle” tab, although many firms choose not to share their data.
To achieve 1,800 billable hours, an associate would work her “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. The first option would give an attorney 1,832 billable hours, with a total of 2,430 hours spent “at work” (AKA: including performing non-billable activities.)
It is a simple table to help you quickly calculate how many increments of an hour to charge, based on how long you worked. When tracking billable hours manually with a billable hours chart, most lawyers adhere to 1/10th of an hour (aka six-minute) increments. Why do lawyers bill in six-minute increments?
Firms “average,” “target” or “minimum” stated billables typically range between 1700 and 2300, although informal networks often quote much higher numbers.
Billable hours are typically something the attorney keeps track of on their own and submits for approval before being passed on to the client. Typically, as an attorney, you keep track of these hours by writing them down. Then include a description.
For example, if you want to reach a goal of 2,000 hours annually, you would need to bill for roughly 40 hours each week, or eight billable hours a day. You may not work exactly eight hours each day, but this breaks down what you should average in a day, week, and month to reach your annual goal.
2080 billable hoursIf you do the math, 260 days x 8 hours per day = 2080 billable hours in a year.
Tips to Maximize Your Law Firm's Billable HoursMinimum time increments.Record tasks as you complete them.Create a firm-wide time tracking policy.Increase your productivity.Complete billing descriptions.Delegate strategically.Track all time… billable and non-billable.Get to maximizing.
Six minutes (1/10th of an hour) – Under this structure, lawyers bill tasks in 6-minute increments. Tasks that take less time are rounded up to 6 minutes for billing purposes. For instance, a 3-minute telephone call is billed for 6 minutes of time. The 6-minute increment is the most common within the legal profession.
Throughout the United States, typical attorney fees usually range from about $100 an hour to $400 an hour. These hourly rates will increase with experience and practice area specialization.
For most service companies, 30 percent is considered a good efficiency rate, while 50 percent would deliver extremely efficient employee costing. That means out of eight hours, if a technician does approximately 2.4 hours of billable work per day, the billable hour percentage averages 30 percent.
Under normal circumstances, considering a 5-day workday week and that there are 52 weeks in a year, 3000 billable hours would mean logging 12 billable hours a day, and that would then entail working 14-16 hours a day, every day of the 5-day workday week, for all 52 weeks of the year. Not a pretty prospect.
The most basic magic number is the 40 hour work week. This one likely doesn't need much description for where it comes from. It's eight billable hours in a day, five billable days a week.
Unless someone told you otherwise, bill all the time you spend on a task, even if you know some of it will be marked down. At most firms, you will still get credit toward your billable hour goal for all the time you enter into the firm's billing software, even if not all of that time is billed to the client.
To achieve 1,800 billable hours, an associate would work her “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. The first option would give an attorney 1,832 billable hours, with a total of 2,430 hours spent “at work” (AKA: including ...
Otherwise your $4,000 client project could end up making you $10 per hour because it required more time than you first estimated. With more experience, you can improve your ability to determine the project’s complexity.
You may want to include on your estimate the time you use to present your work and ask for feedback. Also add the time you spend in a meetings or discussing project details.
Now that the job is finished you’d probably collect the final payment, send an invoice and deliver your work.
Of course you could add a fee for late payments, but as a general rule, chasing payments is not a billable task.
After all, your client is paying for results, not for every single task. However, if the client is very demanding and it takes you longer to complete a project than it normally would, you could increase your project fee next time to cover your costs. Otherwise, you’re just giving money away.
You can’t charge your clients for asking for work. If you spend a few hours every week looking for new prospective clients, there’s really no one who could pay you for that.
Remember I said you can charge for doing research for your client? If you learn a new skill for the project and you can use that skill for future work, it’s uncommon to charge your client for the time you spent learning it .
Billable hours are time spent working on professional tasks that can be charged to the client for the agreed hourly rate. Lawyers aren’t unique in billable hours – consultants, writers, developers, graphic designers, and other professionals bill by the hour. You need to keep accurate records of how long you spent on each client’s task in order to charge billable hours. If your records aren’t precise and well organized, you could undercharge or overcharge.
Non-billable time is time that you’re doing work, but not directly for the client. This may include:
Timekeeping can be challenging for new – and older – lawyers. Without the right foundation, time tracking can be time-consuming and inaccurate, leading to losses in productivity and revenue.
Many lawyers are “old-school” and prefer manual time logs, but that’s not the most efficient or accurate way to track your time. Digital time-keeping software and practice management software not only offer time-keeping functions, but cut down on the time you spend manually filling out logs, client details, task details, and invoicing. The software also retains all your important client data in a secure, centralized location, so you can access it quickly and easily, no matter where you are.
Record your non-billable time. You won’t make money on it, but you can identify areas where you could be more efficient or tasks that you may be able to outsource.
Depending on the requirements of your firm, you may be able to set your own invoicing schedule. Many firms use a monthly billing cycle and bill on the same day each month, but you may be able to set weekly, biweekly, or end-of-project billing cycles.
Lawyers work hard, and they work a lot. Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year. According to the 2020 Legal Trends Report, lawyers spend just 2.5 hours each workday on billable work. It’s clear that lawyers must find ways to track their hours as effectively ...
What is a billable hours chart? A billable hours chart is an attorney billable hours template. It is a simple table to help you quickly calculate how many increments of an hour to charge, based on how long you worked. When tracking billable hours manually with a billable hours chart, most lawyers adhere to 1/10th of an hour (aka six-minute) ...
Billing six minutes at a time is standard practice for practical reasons: Manually billing by the minute or in smaller increments is difficult and time-consuming to track and calculate by hand. Conversely, billing in larger increments could lead to excessive padding, leading to unhappy clients overpaying for legal services. Six-minute periods are easy to calculate with the help of a billable hours chart, and they allow for reasonable increments without rounding up by too much.
To run a successful, client-centred law firm, you need to prioritize your client’s experience. Have clear policies to explain rates and billing practices to clients from the start. For example, how often you will bill them. Communicating clearly can help manage clients’ expectations regarding billing and payment.
One important aspect of law firm life that is nearly impossible to avoid is the “billable hour.” Most law firms make their money by billing their clients by the hour. In order to be profitable to your firm, you must make enough money from your billable hours not only to cover your salary and your overhead, but also to generate revenue for the firm. It’s not a complicated equation – the more hours you bill, the more revenue for the firm.
With a half hour commute (to your desk and working) you are “working” from 7:30 am to 6:50 pm With a one hour commute you are “working” from 7:00 am to 7:20 pm, Monday - Friday
When law firms are making their billable hours targets they need to consider their profitability but they also need to consider the practicality of demanding that lawyers work incredibly long hours as a standard instead of an exception.
Billable hours are the lawyer hours that clients pay for directly. There are tasks that a lawyer does that is just part of the work needed to work at a law firm but then there are tasks that are directly related to the client’s case. Time spent on tasks directly related to a client’s case can be billed for the most part to the client.
It’s important that law firms devise effective strategies for getting the most out of their billable hours while helping lawyers and clients understand just how law firms bill. December 18th, 2018.
Law firms can also use an attorney billable hours chart to see if there are any inefficiencies in the way associates are spending their time but there are limits to how much time any associate can squeeze out of a workday. If a law firm is tracking their time and maximizing their lawyers’ billable hours and they are still unable to turn a profit, they may need to examine other sources of their financial trouble such as a too low fee or too high cost of overhead.
Increase quality but billable time on client cases. High quality time on a client case improves customer satisfaction and is profitable for the law firm because clients refer others and return when they need lawyer services in the future.
For lawyers who are working 70 or even 80 hours a week, it can become easy to forget how that time was spent and how much of that time really is billable hours. Fortunately, when law firms use legal practice management software like Smokeball, they can easily track lawyer work hours and create a billable hours chart that allows partners ...
Once a law firm has paid all of their expenses, the profit/equity leftover is shared amongst the equity partners. If lawyer hours in the law firm didn’t include enough billable hours, equity partners could face a serious decline in their compensation.
INCREASING THE PRODUCTIVE, efficient, billable use of each staff member’s time well into the 1,500 to 2,000 hour annual range is the key to a firm’s bottom-line improvement.
TO SUPPORT THE PRODUCTIVITY BONUS, a firm needs only an additional net-billed-fee summary/worksheet for each staff member each firm fiscal year. It takes less clerical effort than an overtime system does because the calculations are made yearly rather than monthly or weekly.