Timekeeping advances capture law firm COOs’ and CFOs’ attention
Law firms increasingly rely on COOs and CFOs to manage the business of law, under the direction of the managing partner. Virtually every Am Law 200 firm has a COO, or a similar operational leader with a title of chief executive officer, chief administrative officer or executive director. 85% of Am Law 100 firms have a CFO, which has correlated to higher per equity partner profits.
The pressure on COOs and CFOs to keep their firms on track for greater financial returns and operational efficiency never ends. As these law firm professionals cast their scrutiny deeper into the firm, the timekeeping octopus has caught their attention.
Timekeeping hassles hurt revenue
Let’s face it—few firms have solved the hassle of timekeeping for busy, mobile lawyers. Lawyers work on tens of different revenue-generating activities every day. Stopping to record time during legal work is distracting and inefficient, not to mention a dreaded, boring administrative task lawyers despise. So most spend hours over the weekend doing time entry. With this after-the-fact approach, it’s easy to forget 15 minutes here or 20 minutes there of billable time done the previous week or month. This hurts revenue because this lost time is never billed to a client. And it adds up over the months and years.
Noncompliant bills get rejected
Outside counsel guidelines (OCGs) have flooded law firms with billing stipulations that if not met, result in rejected bills. Block billing—billing entries that use broad generic terms to describe legal services performed—are a big no-no in many OCGs. Yet lawyers who are unaccustomed to providing specific, line-item descriptions and unaware of the client’s requirements may submit time with overly broad activity summaries. The erroneous time entry tentacles hit the billing system, which sends off noncompliant bills to clients. Of course, the bill is then rejected due to a violation of client OCGs. Afterwards, the time is commonly written off, decreasing firm realization rates and revenue.
Bad time records, bad pricing
Law firms have to compete fiercely to win business in a tightening legal market. Nowadays, winning new business depends on proposing reasonable pricing and, frequently, flat fees or phase-based fees. Where do firms find data to develop competitive pricing? In time and billing systems. But if these data sources include forgotten unbilled time, or written-off or written-down time, the new pricing will be based on inaccurate notions of the resources and time needed to get the job done for the client. To win new business and achieve good margins, firms need good timekeeping data.
Advances: compliant time
Law firms need technology that ensures time is accurate and compliant with OCGs. COOs and CFOs interested in precisely capturing and billing for all legal services done at the firm will want to learn more about advances in time-capture technology. Newer technology can automatically suggest time entries based on lawyers’ matter-specific usage in document, email, calendar, and telephone systems, eliminating hassles and “forgotten time.” In addition, billing disputes, write-offs, and decreasing realization rates can be vanquished with today’s AI-based OCG compliance technology.
To learn more about timekeeping’s potential to impact law firms’ bottom lines, read our ebook: Law firms face a time and billing crossroads.
- How IAASB’s New Quality Management Standards Affect Your Accounting Firm: A Closer Look at ISQM 1
- Meet Our June Intapp Employee Hero, Alex Clayton
- The Evolution of Legal Data Analytics and AI-Based Insights
- Manage AML and CDD with OnePlace Risk & Compliance
- 5 Ways Purpose-Built Software Can Accelerate Your Accounting Firm’s Client Acceptance
- Win Business and Grow Your Firm with Cloud-Based Solutions
- Boost Profitability with Automated Time and Billing Software
- Time Tracking Software for Consultants: How Automated Consulting Time Tracking Eliminates Costly Inefficiencies to Improve Profitability
- A First Look at OnePlace Collaboration & Content for Accounting and Consulting
- Meet Our May Intapp Employee Hero, Caleece Nash
Sign up to receive email updates from Intapp