Getting Paid What You’re Worth: Why Time Tracking is Essential to Understanding Your Productivity

Written by Jeremy Diviney in Accounting, Blog, Legal, Running Your Business
July 25, 2017:

As a lawyer with extensive education and training, you are entitled to be paid what you’re worth. But what are you worth? That is actually up to you. That doesn’t mean deciding the amount you charge per hour (but yes, you get to do that, too). It means the amount of effort, planning, marketing, networking, reputation building, blood, sweat and tears you put into your firm is entirely up to you. But you’ll find the more of yourself you put into every minute of that hour you’re charging your clients for, the more you’ll get back. So what should you be focusing on? Getting the most out of your time and accurately tracking the time you spend working on cases will ultimately give the most return on your investment (of time).

Time Management

With multiple clients and multiple projects going on at once, it can be overwhelming to keep everything organized. But time management is key to long-term success. According to MindTools, when you plan and organize the time you spend on work-related activities, it leads to greater productivity and efficiency, a better professional reputation, less stress, and increased opportunities for advancement and new clients.

It may sound obvious but poor time management skills can lead to missed deadlines, poor quality work, and damage to your professional reputation, which ultimately could have negative consequences for your career. All this, of course, leads to high levels of stress. In fact, procrastination can actually harm your health, as this Canadian study on the causes of high blood pressure suggests.

So how do you manage your time? Here are some easy tips to get you started.

  • Do the most dreaded task first. Do the thing that has been occupying your mind the most and causing the most stress. This will automatically make the rest of your day seem like a piece of cake.
  • Designate a specific window of time to make and return phone calls. If you answer the phone every time it rings, nothing will get done. Saving all your phone calls (with necessary exceptions of course) for one specific time will cause fewer distractions and interruptions in your schedule.
  • Make the next day’s task list at the end of every work day. Spending your last few minutes at the office prioritizing the next day’s schedule will make a big difference in your entire week.

Do It With Time Tracking

Now that you’ve organized your own time, in order to make sure you are getting paid for everything you’re entitled to, it is necessary to accurately track the time you spend working on clients’ cases and projects. Here are some pro tips:

  • Get in the habit of keeping meticulously detailed records and invoices. This includes writing full descriptive sentences with dates and times that account   for every billable minute.
  • Strike a balance of sufficient descriptions: not too much, not too little. Explain each task so even the most skeptical client can see the purpose and benefit, and thinks twice about registering a dispute. But don’t add so much detail that a client ignores the implicit value message.
  • Avoid rabbit holes and other distractions. Phone calls are obvious, but what about email or text notification signals on your phone. Turn off all distractions and complete a task before getting side tracked by bright, shiny objects.

No surprise, we agree that time tracking software like Bill4Time is the best way to accomplish this. But don’t just take our word for it: according to an article in Forbes, firms that actively measure data and track time have a much better understanding of their financials and the marketing return on their investment than those that don’t consistently measure and track.

So what should you be tracking? Smart firms track all activities, not just billable hours.

  • New Business – when leads stop coming in at a consistent pace, business will inevitably slow down as well. Specifically set up a project within your company files for new business and track the hours you (and staff) spend on all new business activities: prospecting, networking, phone calls, emails. This is an important measure of the future success of your firm, so be sure you get positive ROI of the time spent.
  • Archives & Milestones – time tracking software like Bill4Time can serve as an archive for client projects and accomplishments. When you track your time as projects (and use consistent labeling), you also create permanent, searchable records when the projects are done: key accomplishments, decisions, and approvals. This becomes an invaluable archive that can be used to document a history of a long-standing client relationship.
  • Financial Productivity – Comparing time records with other financial measures can be a great management tool to spot problems early. For example, look at utilization rate (hours billed vs. total hours) to spot which associates are most productive. Look at realization rate (hours billed/hours collected) to detect if certain clients have unreasonable billing disputes, or certain associates have unreasonable charges. Look at collections-based stats (Unbilled Days and Uncollected Days) to determine if you’re too slow to send invoices after a matter is closed, or if a client is too slow to pay.

Analyzing all this data and information will allow you to see your business from a completely different perspective and bring to light all the things you are doing right and all the things that could use improvement. Time management and time tracking are the keys to a successful firm.

 

 

Jeremy Diviney is President and co-founder of Bill4Time, web-based time billing software serving both small and large professional services firms. With offices in New York, Seattle, and Pittsburgh, Bill4Time creates simple-to-use, intuitive and user-friendly software.

Written by Jeremy Diviney

Jeremy Diviney is Co-Founder and Chief Technology Officer of Bill4Time.com

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