What a 0.1 actually costs your firm

The arithmetic

A 0.1 is six minutes. At a charge-out rate of $350 an hour, it is worth $35. If a lawyer misses one unit a day across 230 working days, that is about $8,000 a year in work done and never billed.

Most lawyers miss more than one. When I ran billing at a 30-lawyer firm, comparing diaries against timesheets showed a typical gap of three to five short entries a day. Almost all of them were 0.1 or 0.2.

• 1 missed unit a day: about $8,000 a year per lawyer

• 3 missed units a day: about $24,000

• 5 missed units a day: about $40,000

Now multiply by headcount. A 15-lawyer firm missing three units per lawyer each day leaves around $360,000 unbilled. Not all of it would be collected, but almost all of it was legitimate work.

The figures assume the missed work would have been billed at the full rate. In practice some of it would be written down or written off, so treat the totals as the upper end. Even at half, the gap is larger than most firms spend on technology in a year.

Why the small entries go first

Long tasks get recorded because they are memorable. A two-hour drafting session is hard to forget. A three-minute call with the other side, a reply to a client from the train or a question from a junior about a file is exactly what never reaches the timesheet.

These are often the entries clients value most. A short call that settles an issue is work a client is happy to pay for, as long as the invoice says what it was. They also cluster on the busiest days, when a lawyer is least likely to stop and record them.

Short entries are also the ones most likely to be recorded on the wrong matter. A lawyer who records time at the end of the day remembers the call but not which file it was for, and a quick guess sends the unit to the wrong client.

Find your own number

You can estimate your firm’s gap in an afternoon. Pick two or three lawyers who are willing to help, and one recent week.

1. List every meeting, call and email in each lawyer’s diary and sent items for that week.

2. Compare the list against their recorded time for the same week.

3. Count the activities with no entry, and estimate each one at 0.1 or 0.2.

4. Multiply by the lawyer’s rate and by 46 working weeks.

The result is rarely exact, and it does not need to be. It gives you a number to weigh against what a better routine would cost, and a baseline to measure against in three months.

Expect some resistance. Nobody enjoys finding out how much of their week went unrecorded. Present it as a firm-wide estimate rather than a measure of any one person, and use the result to agree a routine, not to assign blame.

Write-offs you never see

Firms watch write-offs closely because they show up in reports. Unrecorded time shows up nowhere. When a partner writes off a recorded unit, someone has at least made a decision, but time that was never recorded was never decided at all.

We were proud of our low write-off rate for years. Then we compared diaries to timesheets and realised the write-offs were happening before anyone typed anything.

Stuart Lowe, Managing Partner, Whitlock Rowe

It affects pricing too. If your estimates and fixed fees are built on recorded time, and recorded time runs short, every estimate is too low before the matter starts.

There is a quieter cost as well. When recorded hours run short, the firm’s figures for each lawyer, each practice group and each matter type are all wrong in the same direction. Decisions about hiring, pricing and which work to take on are made on those figures.

Closing the gap

The fix is a habit, not a policy. Record time while you do the work, from the matter you are already in.

1. File the email and add the time in the same step.

2. Start a timer when you open a matter and stop it when you leave.

3. Spend five minutes at the end of each day checking recorded hours against your diary.

4. Review team totals weekly, not monthly.

Filebird records time in six-minute units from email, documents and the matter itself. The short entries get captured in the place they happen, which is the only place most of them ever will be.

The email step matters most because email is where the short tasks live. A lawyer who files every client email to its matter and records the time in the same step catches most of the units that would otherwise disappear.

What partners can do

The habit belongs to each lawyer, but partners set the tone. Two things make the biggest difference.

• Record your own time the same way. Juniors notice when partners reconstruct their week on a Friday.

• Ask about unrecorded time without blame. “What did we miss this week?” works better than “Why are your hours low?”

Some firms also share team totals each week. It keeps the conversation regular, so nobody is surprised at month end and nobody feels singled out.

Partners can also stop rewarding reconstruction. If the weekly review praises the lawyer with the most hours, people will fill their timesheets on Friday afternoon. If it praises accurate, timely entries, people will record as they go.

Three months later

The firms that close the gap do not do it with a policy memo. They do it with a daily habit, a weekly look at the numbers and a tool that makes recording time part of work that is already happening. Run the same one-week comparison again after three months. The difference between the two numbers is what the routine is worth to your firm.