Hi, Finance – April

“I can see from the Management Accounts that I need my fee earners to record more time. Nearly all of them are under target for the Year-to-Date. I am sure they are busy enough, but they are just not getting the time down on the system. No matter how many times I talk to them about it, nothing changes. So I know what I want to do: I just need to know how to make it happen”.

You are not alone! This can seem like an intractable issue to so many but let’s see if we negotiate a way through it. Thus far, you have not found a way to ensure that all fee earner time is recorded. As a result, fee earners are often missing those little extra billing opportunities and where fees are on a time-cost basis, the main fee itself can be too low as well. This results in fees being lower than they should be.

This matters because in many law firms, each 1% loss of fee income results in something like a 4% reduction in bottom-line profit. If you lose £1 in every £100, you are badly damaging your profits.

How might we fix this?

Your interventions so far have not made any difference.  You have to do something different.  If you carry on doing what you always did, you will get what you always got, so you need to find a way to change behaviours.  Something that makes the fee earners get that time onto the ledger.

What will make a difference depends on the individual fee earner but in general:

• They need to understand the impact on fees and profit of them failing to record time properly
• There needs to be an incentive for them to fully record time. They must want to do it
• Time recording must be made easy: take away any difficulties in recording time.

Improving understanding

The fee earner will usually be unaware of the effect of not recording time properly. Time-recording training is the most effective way to ensure they realise the impacts of their behaviours. They would come away from that programme understanding why time recording matters and with a plan to do things differently.

Proper training is more effective than simply ‘telling’ them. You are aiming to change their behaviour: to change their routine and get them into good habits. A training session, outside of the normal work environment and using an experienced trainer, provides the best environment to provide that understanding

Providing incentives

This does not necessarily mean financial incentives. It depends on the fee earner: some may respond to extra remuneration, but others respond to gift vouchers, a charitable contribution, extra time off or something other than cash. Whatever it is, it has to be something that the fee earner values. You can do no worse than asking them what they might appreciate if they achieve the targets set.

Make sure that you monitor the time recording statistics and note the improvement as it comes through. Feedback to staff shows you notice and care. You should also see the resulting fee improvement to prove that the ultimate impact is taking effect.

Making time recording easier

One reason time does not get recorded fully is because it is a time-consuming and uninteresting job.  Lawyers are never going to get excited about time-recording!  If the fee earner is complaining about the administrative task, take away the cause for complaint.

Make it as easy as possible.  Many Practice Management Systems have auto-time recording features.  These record time based on a standard number of units for undertaking that task or they have clocks that turn on when you start the work and turn off when you stop the work.  There are manual versions of the clock systems too, which you must remember to start and stop when you start and stop work on a matter.  Most systems allow you to enter time manually and that can be delegated to another person, typically support staff, as well.  (I do think if they can record time for their support staff to enter, they could enter it themselves.  It’s almost as if it’s being done twice). There are also more specialist solutions that use the concept of ‘time capture’ – monitoring all fee earner activities in the background and making ‘suggestions’ where time entries have been otherwise missed.

They now know what is needed, so they can choose the way that should work for them.  Monitor output and see whether there is an improvement.

Conclusion

Time recording is rarely at 100% of what it should be.  But, as law firm managers and owners, we employ fee earners – typically – seven to eight hours per day.  Therefore we should know what they are doing for the time they are working for us and most of that time, they should be working for our clients.  More client work will, other things being equal, lead to increased fees.  It is not a direct correlation because so few matters are billed on an hourly rate, except certain areas of litigation: but doing the work is a prerequisite.  Time recording is simply the record but it needs to be a complete and accurate record.

Making the change to achieve that complete and accurate record is not easy.  There are plenty of advisors who would say something like “Your fee earners need to record more of their time”.  Now you have a better steer on how that can be done.