how to bill time as a lawyer

How to Effectively Bill Time as a Lawyer

• Craft Detailed Billing Descriptions. Detailed task descriptions are a fundamental component of a well-drafted invoice. ...
• Avoid Block Billing. Block billing is the practice of listing a group of tasks in a block summary under a single time entry.
• Record Time Promptly. ...
• Remember Your Audience. ...
• Familiarize Yourself With Client Billing Policies. ...

Full Answer

How to effectively Bill time as a lawyer?

Three Ways to Better Billing

1. Break it out Don’t bill in blocks, bill in bites — small, bite-size pieces that detail all of the hard work you put into your pleadings and the like. ...
2. Don’t let billable tasks slip through the cracks You’re doing the work. Make sure you’re capturing all of it in the form of itemized tasks on your timesheet. ...
3. Keep time contemporaneously

How do lawyers calculate billable hours?

Software that can help your track billable hours

1. Saviom. Companies with lots of moving parts can benefit from the insights achieved through Saviom, a resource management and workforce planning software.
2. TSheets. To invoice for billable time, you have to track time. ...
3. PracticePanther. ...
4. Asana. ...
5. QuickBooks. ...

How much can a lawyer expect to get paid?

How Much Does a Lawyer Make? Lawyers made a median salary of $126,930 in 2020. The best-paid 25 percent made $189,520 that year, while the lowest-paid 25 percent made $84,450. The BLS projects ...

How much does a lawyer make a hour?

How much does a Lawyer make? As of Jan 29, 2022, the average hourly pay for a Lawyer in the United States is $38.82 an hour. While ZipRecruiter is seeing hourly wages as high as $68.03 and as low as $7.21, the majority of Lawyer wages currently range between $28.85 (25th percentile) to $46.39 (75th percentile) across the United States.

How do you calculate billable hours for a lawyer?

Calculating billable hours is straightforward: you take how much you've worked and multiply it by your hourly rate.

How do you charge billable hours?

How do you calculate billable hours?Set an hourly rate.Track every billable hour on a timesheet.Add up your billable hours.Multiply total billable hours by billing rate.Add fees or taxes to the client's invoice.

How do you capture billable time?

5 Easy Tips to Capture & Bill more timeIdentify unbilled time, fees, and expenses. Before you can implement strategies to capture more time and billable hours, you need to identify how and where this time gets lost. ... Establish best practices. ... Accurate time tracking. ... Automate the billing process. ... Make it mobile.

How do you bill in 15 minutes increments?

The standard increments used by most firms are as follows.1/10 of an hour (6 min)1/6 of an hour (10 min)1/4 of an hour (15 min)

What should my billable rate be?

We typically factor in 20% as a good point to pay the business owner(s) and keep the business moving forward in a healthy fashion. In the example below, you can see the variations in what your billable rate should be based on the profit margin in the columns to the right.

How many hours should I be billing?

As a general rule, if you bill between 36 and 40 hours in a week, you're likely going to be okay. Over the long run, the expectation is that you should be averaging 40 billable hours a week - assuming you have productive work to do.

Why do lawyers bill in 6 minute increments?

Why do lawyers bill in six-minute increments? 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.

How do you calculate billable rate?

One way to calculate a bill rate is to use a pricing multiplier. Start with the base salary of an employee, $80,000 per year. Divide that by the number of work hours in a year, which is about 2080. This results in an hourly rate of around $38.50.

Do you bill for invoicing time?

Typically, it depends on the client and your relationship with them. For larger, higher-paying clients, you can typically bill for the full amount. With smaller clients who are budget-conscious, you may consider only billing for the time you spent with them.

How do you convert time to billable hours?

Strategy: Multiply the Excel by 24 to come up with a decimal number of hours. You can them multiply the hours by the hourly rate to calculate the billing. Multiply times by 24 to get hours.

How is billing in minutes calculated?

Subtract the end time from the start time to compute the duration of time worked. Decide how you will be billing for your time. You can either round the time to the nearest hour, half-hour or 15-minute increment.

How do you invoice time and a half?

Assume an employee earns $20 hourly during a 40-hour work week. Their time and a half pay would be $20 x 1.5 for a total of $30 an hour.

How many hours can a lawyer bill?

Don’t short yourself that billable time. But be realistic about how many hours you can bill in a day. Not everything lawyers do is billable; an 11-hour day at the office might only yield eight billable hours. And that is OK.

What can you bill for in a law firm?

But at most firms, you can and should bill for tasks like reading and sending emails; taking and making phone calls; reviewing accident reports, medical records, and discovery documents; and speaking to clients, opposing counsel, and witnesses.

How long does it take to get proficient at both?

You’ll get more proficient at both, but it will take a few years, and during that period, expect that your billing entries may be cut. 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.

What does a lawyer do in a new matter?

In the new matter, the lawyer copies the memo, makes sure the research is up to date, tailors the arguments to the current client’s case, and files the brief.

Do you get credit for billable hours?

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. Sometimes associates are embarrassed by the amount of time they spend on work they view as “easy.”.

Do summer associates get good at billing?

Most seasoned lawyers recognize that summer associates and young lawyers generally are not good at billing. Most new lawyers don’t get comfortable with billing until they are third- or fourth-year associates.

Can a lawyer bill for travel time?

While the lawyer is on the plane, she uses that time to work on projects for Client 2. Some clients don’t allow lawyers to bill for travel time, and under that circumstance, the lawyer could only bill the time spent working for Client 2 anyway.

How do you bill a legal time?

Be Descriptive. Time sheets are your opportunity to show the client and billing partners what they are paying for, so your time sheets should explain the value you are adding. …

How does billing work in a law firm?

Like a down payment, it is paid at the beginning of the attorney’s representation, usually when the attorney is billing on an hourly basis. The total services and costs are subtracted from the “retainer,” against which further work will be performed.

How do law firms track billable hours?

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. … There are different ways lawyers can keep track of these hours.

How do lawyers bill for emails?

Attorneys typically bill in 1/12 of an hour increments; that means every six minutes. So one short email that takes less than six minutes you will be billed 1/12 of an hour. For emails that take a longer time, you will be billed accordingly. However long it takes to write the email multiples by his/her hourly rate.

How do lawyers record their time?

Since the hourly billing is the most common billing method used by lawyers and attorneys, applying a time tracker allows to break down the hourly rate into specific billable slots, which accounts for the unquestionable precision of the work time calculations.

How do you bill in 15 minutes increments?

You can either round the time to the nearest hour, half-hour or 15-minute increment. If you decide to round, simply change the duration of time to the next nearest time. For example, if you are going to round by 15-minute increments and you worked 3 hours and 25 minutes, your tally would be 3.5 hours.

How many billable hours is normal?

According to the National Association for Law Placement, the average number of billable hours required from a first-year associate is 1,892 hours for the latest year listed, which is 2016. But the average number of billable hours required for first-year associates at firms with more than 700 attorneys is 1,930 hours.

How many hours do lawyers work?

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 ...

When lawyer work hours are tracked with legal billing and time tracking software, should they use very descriptive language on each entry?

When lawyer work hours are tracked with legal billing and time tracking software, they should use very descriptive language on each entry so that a non-lawyer can understand what work was done. When clients can see the details of the work done on their case there is less confusion and fewer billing disputes.

Why is billable hour important?

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.

What is billable hours?

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.

When law firms are making their billable hours targets, do they need to consider their profitability?

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.

What happens if a law firm doesn't pay all of its expenses?

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.

Do law firms bill their hours?

It’s important to note that while the majority of traditional law firms focus on billable hours, public interest law firms don ’t bill their hours to a “client” and small law firms outside of large cities may not have such a high billable hour requirement for their associates.

Is Rocket Lawyer a lawyer?

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

Can a lawyer charge contingent fees?

For example, a lawyer cannot charge you contingent fees if you're being charged in a criminal case, as you will not be awarded damages. Whichever fee agreement you select, make sure you understand it up front and get the parameters in writing.

Do attorneys charge by the hour?

Some attorneys charge by the hour. Although the actual rate varies dramatically depending on location, experience, and case type, it's important to note that you will not only pay for the hours your lawyer spends in court, but the time he or she spends researching, writing motions, meeting with opposing counsel, reviewing discovery, etc.

How to sharpen a billing pencil?

1. Break it out. Don’t bill in blocks, bill in bites — small, bite-size pieces that detail all of the hard work you put into your pleadings and the like. Take a motion for summary judgment, for example.

Can paralegals polish timesheets?

Once you implement the system and your placeholder entries become uniform and routine, you can train your paralegal or assistant to polish your timesheets for you, saving you more time to perform more billable tasks.

1. Document Your Time Tracking Policy

It’s time to literally think about time as money for your firm. Breaking for a 90-minute lunch may be fine in your firm, but that’s a $350 expense that would probably need partner approval if you treated that time as money. The answer is for your firm to establish a documented time policy. This policy should include the items we’ll cover below.

2. Establish a Firewall Between the Invoicing and Time Entry Processes

Making sure all the billable time is entered should not happen at the end of each month when draft invoices are being created. Ideally, you want to eliminate the time between actually working on a billable item and when the time entry is made. Establish a policy where time entries are reviewed and confirmed each week.

3. Enter All Time by End of Day

A lot of associates will wait until maybe Friday afternoon at 5 p.m. to calculate and enter their time for the week. This ends up being a game of fill in the blanks as they try to get to the 40-hour mark. By entering and checking their time at the end of each day, there’s no need for the end of the week guessing game.

4. Capture ALL the Time, Not Just Billable Time

This is one of those ways to really count time as money. If senior partners know where ALL the time has been spent, they can adjust and shift resources accordingly to maximize efficiency and use of time. Perhaps there’s an associate who’s spending 7 hours a week on a task that could be or should be handled by a non-billable employee.

5. Do Review Missing Time Once a Week

Have we mentioned it’s a good idea to separate timekeeping from billing? Assign your billing person the job of reviewing every Monday the missing time from the previous week. It’s easy to work with your timekeepers to rectify any time missing because there’s very little time elapsed.

6. Close Out the Time Entries Every Week

This is a super powerful way to make sure time is entered the day the work is completed. Your timekeeping software should allow you closeout each week so timekeepers don’t have the option to modify or create time entries from the week before.

7. Commission Incentives

If your firm has this in place, pay your timekeepers based on a commission of funds received (and NOT just how much was billed). When timekeepers know that their efforts to track time quickly and efficiently will affect their own paycheck, you’d be amazed how well they can become at this task!

What is a time sheet?

Time sheets are your opportunity to show the client and billing partners what they are paying for, so your time sheets should explain the value you are adding. A generic description like “research procedural issues” is likely to draw pushback from the client, if they are paying attention.

Should attorneys be tracking their time?

All attorneys should be tracking their time contemporaneously and recording time every day. It is too difficult to try to recreate your week or month at the end of the billing cycle. If you try, you are almost certain to make inaccurate estimates of time spent.