Time Tracking for Lawyers: 4 Reasons to Stop Using Excel

Time tracking for lawyers should be effortless. Many rely on Excel spreadsheets to track their time and are accustomed to this method. However, using spreadsheets to track time has hidden business and revenue implications.

Why law firms using excel lose money

The problem with using spreadsheets to track time is the increased opportunity for human error. Benjamin Lieber, Managing Partner at Potomac Law Firm talked about what time tracking for lawyers is like when spreadsheets are used:

“Lawyers would send me their time every month by email and would come in all different formats and all different conventions and levels of granularity. And even the units would vary somewhat. Some would use a tenth of an hour or some would use quarter hours, some would use a third of an hour; it was a mess…”

This can be a common scenario for law firms using spreadsheets as their form of time tracking. Here is why this can cause problems:

• Lawyers end up spending too much non-billable time on their timesheets
• Managing partners lose a tremendous amount of non-billable time deciphering attorney timesheets
• Law firm utilization and productivity rates plummet 
• Firm-wide standards aren’t enforced or clearly identified
• Managing partners are so busy wrangling spreadsheets that they don’t have the time needed to address the problem with their timekeepers

Research shows lawyers are paid for less than 30 percent of their day.

Laywers today are running themselves into the ground, doing everything they can to meet the crushing standards set by firms, who are also struggling to contend with competitors. 

Here’s the problem with spreadsheets. Your spreadsheets, whether it’s Microsoft Excel, Google Sheets or Open Office Calc come with a specific set of problems. 

1. Skill set. Do your employees have the necessary skills needed to use the spreadsheets properly? It’s important for your law firms time tracking practices easy and intuitive.
2. Human Error. If you don’t track your time minute-by-minute, it can be easy to forget how long it actually took you to complete your work. Additionally, spreadsheets are easy to manipulate and built-in equations can be distorted.
3. Inconsistent standards. The way one attorney tracks time, may vary from another. This can cause inconsistency in time tracking and hurt billing.
4. Billable leakage due to delayed time entries, creating a case of over-billing, lost revenue and an increase in non-billable work. Research shows spreadsheets, when combined with non-billable work, produces an average loss of $86,294 to $106,294 per person, per year. 

Your firm has multiple clients. This means multiple spreadsheets for each client or one master spreadsheet. To complicate things even further, each associate has their own copy of the time tracking spreadsheet. One or more of your timekeepers continue to make new copies of this spreadsheet. 

Who has the most up-to-date copy? Did the other timekeepers working on a client matter download your most recent spreadsheet? If they didn’t, and they added their time to an old spreadsheet your most recent work is missing. The 40 hours of work you spent on your client’s matter is now gone. 

Advantages of Time Tracking Software

The solution to eliminating spreadsheets is time tracking software. Software like Bill4Time, takes the guess work out of tracking, managing and deciphering lawyers timesheets. This results in more time for attorneys to focus on their work and decreases the changes of hidden revenue leakage at your law firm.

In some situations, your law firm may need to adjust a clients invoice. It could be due to lack of communication of your billing process, dissatisfaction with service or simply trying to bargain your rate. No matter the reason, rate reductions add up over time and can hurt you bottomline. Having the proper legal billing software can help reduce law firm write-downs and boost your revenue.

The case of Manigault v. Daly & Sorenson, LLC, is a notable example of expectations gone awry. Manigault felt her law firm used 15-minute increments to charge her unfairly when the “specified work took far less time to accomplish.“

Did her law firm take advantage of her in this situation? We’ll never know. The Wyoming Supreme Court disagreed with her assertions, stating that her law firm was not unreasonable. 

The secret cause of write-downs and write-offs

The hidden driver of law firm write-downs and write-offs typically isn’t due to a misunderstanding. It’s also not usually the result of overwhelming mistakes on the firm’s part. It’s an expectations mismatch. 

Pam Woldow, attorney and legal consultant, confirmed this in several posts. Here are a few of the scenarios that create write-downs and write-offs. 

1. Create realistic expectations. It’s important to have an idea of the services you can provide and scope the work accordingly. This starts with an accurate process to measure performance. Inaccurate measures of performance and cost estimates can lead to miscommunication resulting in a client being dissatisfied and requesting a write-down.
2. No concrete budget set. No budget was set during initial negotiations. The firm simply billed clients as usual, doing as much work as they can justify. When clients receive their bill they’re upset. The large amount listed was nowhere close to their expectations and could ask for a discount.
3. Scope creep or changes to the scope. Scope creep occurs in one of two ways – clients request changes but assume their requests are part of the existing budget/price. Or, the firm makes changes to the agreed-upon scope (justified or unjustified). It’s important to communicate all changes and the impact they could make on the scope of work.
4. Inefficient time tracking. Refer to timekeepers who (a.) spend far too much time on legal work and (b.) use traditional form of timekeeping such as an Excel sheet or pen and paper. Utilizing an automated, “set it and forget it” style time tracking software can reduce inaccuracies and allow you to measure your performance.

The issue in each of these very common scenarios is miscommunication on expectations.

Reduce law firm write-downs with proper communication

First, we need to clarify our terms. We need to understand the difference between a write-down and a write-off? It’s an important distinction that helps us better understand the benefits of legal billing software. 

• A write-down reduces the value of an asset (invoices in this case) for tax and accounting purposes, but the asset still retains some value.
• A write-off negates all present and future value of an asset. It reduces its value to zero.

A write-off is typically a one-time event, entered immediately when an asset has lost all usefulness or value, but write-downs can be entered incrementally over time.

When it comes to billing, your clients have fuzzy, implicit and unrealistic expectations. A study by Jukka Ojasalo outlined the differences between these client expectations.

• Fuzzy expectation. Your clients expect your invoice to be within an approximate range, though they couldn’t tell you what that specific number is.
• Implicit expectations. Your client believes it’s “obvious” or “self-evident” that your bill would fall within a specific dollar amount or range (only it’s not obvious).
• Unrealistic expectations. These are expectations you’re either unable or unwilling to meet; for example, your client expects you to produce $500,000 of legal work for $25,000.

To truly reduce law firm write-downs and write-offs, these expectations must be flushed out during the negotiation process. 

How legal billing software can help boost revenue

1. Automated workflows. Good legal billing software enables you to create automated workflows. These workflows are a series of steps and procedures your team follows at the beginning, middle and end of a project. Does a particular client want you to pick up the phone and talk to them when an invoice is over budget? Are clients, contacted when they request something that’s considered to be scope creep? 
2. Pre-bills. A draft version of your invoice gives you the time to go over billing guidelines and client expectations ahead of time. A pre-bill gives you time to run things past partners in charge of a specific matter or project before it reaches the client. 
3. Project management. Good project management enables you to create and assign tasks for specific projects or matters. That’s important if you need to flush out client expectations during the beginning stages of a project or simply hold clients accountable to the standard they’ve set. 
4. Automated time tracking. Using automated time tracking tools, you can convert completed tasks and to-dos into time entries and invoices. That’s beneficial for several reasons. First, you have a visual reminder that you’re working on the tasks and action items your clients have specifically requested. Second, you’re able to gain explicit approvals on each of the pertinent tasks in your client’s project or matter. 
5. Detailed reporting. Reporting can help determine which practice areas have the most write-downs or write-offs, manage budget and identify where problems could arise. Your software should help you identify the important trends and details shaping your firm’s financials. 

Good legal billing software enables you to send invoices and receive payment. Great legal billing software provides you with a framework and the full suite of tools your firm needs to boost revenue, reduce write-downs and eliminate write-offs. Platforms like, Bill4Time, offer an all-in-one solution from built-in payments processing through Bill4Time Payments to invoicing, automated time-tracking and more to manage your firm.

Write-downs and write-offs aren’t mandatory

Sometimes they’re necessary, but they should be the exception rather than the rule. 

Managing your client expectations is easier when you have the right set of tools. With good communication, the right legal billing software and a full suite of supporting tools, your firm will have the tools to reduce unnecessary revenue loss.

The recording for this live stream is available. Register here to access it for free! 

Over the last year, we’ve watched the needs of our clients evolve and it prompted us to make some changes. Maintaining revenue is an important aspect of your business and having a high-level view of your company’s cash flow is easier to manage in-house. 

We are thrilled to offer a truly all-in-one software with our new in-house payments processor,  Bill4Time Payments! Now, your company can easily process payments in the office or on the go without the hassle of waiting for paper checks. Your clients can quickly make their payment in just a few clicks and it deposits directly into your operating account. Faster collection times translates to your company increasing revenue by earning more on the dollar.

If you missed our latest live stream with our VP of Customer Success, Krisitn O’Neill, and Manager of Customer Success, Kris Holz, you can view the recording below for an exclusive behind-the-scenes look into the functionality of Bill4Time Payments and how ePayments will get you paid faster.

Why online payments are a must-have (3:05) 

Online payments are more than just an added convenience for your clients. They greatly influence your time to collect on invoices and the amount of revenue you’re bringing in. 78% of consumers ranked digital payments as their desired method of payment, making online payments more than just a nice-to-have. Companies who offer ePayments will notice a decrease in collection times which correlates to increased revenue. 

What makes Bill4Time Payments different? (4:03)

Third-party and integrated payment processors are expensive. There are often many hidden monthly and transaction fees that can quickly add up, especially if your company is processing payments at a high-volume. 

By building payments into the Bill4Time platform, we can offer an all-in-one system that gives you an all encompassing view of your business at a lower cost. Bill4Time Payments offers industry-low transaction fees, flat pricing and is 100% compliant with ABA, IOLTA, and all 50 state bar rules for accepting online payments – operating account payments are available now and trust account payments will be available in June.

Getting started with online payments is simple! (6:30)

In just a few simple steps, your company can be on its way to offering hassle-free online payments. Our 3-step application process is easy to complete and can be found right in your Bill4Time account at no additional cost. 

If you’re not already a Bill4Time user, you can get a free custom demo to learn how our practice management software can help you better manage your business. 

Invoicing & your clients online payment experience (9:05)

The Bill4Time platform already offers customized invoicing, but with the addition of Bill4Time Payments, your invoices will now display a “Pay Now” button. Clients will receive an email notification prompting them to make their payment either through a previously setup client portal or a secure link. In just a few clicks, your clients can quickly pay their invoice and it will be deposited directly into your operating account. 

Live payments overview (14:00)

You can easily view all of your clients payments including if they were successful, declined or refunded in one place. This one-stop shop feature allows you to quickly assess where payments originated from and their status. 

You can learn more about the other amazing benefits Bill4Time Payments has to offer by viewing our behind-the-scenes video below. 

Free legal consultations are a great way to vet clients to determine if they’ll be a good fit and assess whether you can handle their case. There are hidden downsides to offering free consultations though. This blog will help you weigh your options to determine if your law firm should offer them.

The hidden cost of free legal consultations

Let’s do a little math to reinforce that point. Let’s say two attorneys in your boutique firm provide 325, one-hour free consultations to prospective clients each year. To keep things simple, both attorneys bill at a rate of $325 per hour.

If you were paid for your time, 325 free consultations annually at a rate of $325 per hour would be $105,625.

325 consultations x $325 per hr = $105,625.

Let’s also assume that you’re able to convert 10 percent (or 33) of these prospects as clients with an average retainer of $5,000.

33 clients x $5,000 retainer = $165,000 in revenue

Free consultations don’t require a significant amount of resources. However, bringing a client on means you’ll now need to deduct your expenses from the $165,000 listed above. If you deduct 40 percent for expenses (e.g., salaries, supplies, rent, utilities, taxes, etc.), you’re left with $99,000.

$165,000 in revenue – 40% expenses = $99,000 in net income

You’ve just taken a large pay cut to service this client. This is before your client requests discounts, or you have to make write-downs or write-offs. 

The challenges with free consultations

Hidden problem #1: Ideal clients who want to pay are lost

Quality clients want to know what they’re getting for their money. But they also want to be able to capture your undivided attention. Ideal clients are aware that a simple one or two-hour consultation isn’t enough to provide them with genuine and actionable advice they can use to address their matter.

They also realize that a free consultation means you’re not 100 percent focused on your clients, and you’re not 100 percent focused on them. So after vetting your firm, these clients immediately move to retain your services, so they have your undivided attention. This is the power of paid consultations.

The issue here is that free legal consultations make it difficult to find these clients right away. There’s a qualitative difference between ideal clients who pay for your services and prospects who demand a free consultation. Laura Ruvolo Lipp, Esq. of the Ruvolo Law firm, shares her experience on the clients that come with free consultations.

“A tiny percentage (less than 10%) of those consultations retained and became clients.  Those who did were the people who were serious about retaining an attorney and understood what attorneys charge before they scheduled the consultation.  Many were personally referred to me and were already determined to work with me before they arrived.  The mass that did not retain was largely comprised of individuals who: (1) had no intention of retaining an attorney but wanted to gather as much free legal advice as they could; (2) had absolutely no ability to fund legal representation; (3) were hoping to talk me into helping them for free or a reduced cost; and/or (4) were meeting with as many family law firms as they could so those attorneys would be conflicted-out of representing their spouse.  That last one happened a lot after it was discussed in an episode of The Sopranos. I kid you not.”

With paid consultations, there are no illusions about whether your clients value your services or not. They’ve paid for your time, and they’re working with you to resolve their matter.

Hidden problem #2: You lose future clients

Attorney Tripp Watson describes yet another problem with free consultations.

“Your “quick question,” is actually considered to be legal representation. If I provide any advice to you whatsoever, no matter how benign, you just constructively became my client under the law. So, when the person that is trying to sue you comes into my office wanting to pay me to sue you for the issue that you called me about, my 30-second response to you will prevent me from being retained by a paying client. Your “quick question” may just cost me actual money.”

This is especially difficult if a client disqualifies you from future work due to a free consultation you received from a client. If you’re handling this situation properly, this is a headache.

You have even more nonbillable work to do.

You’ll need to keep track of the free consultations you provide —who, what, where, when, etc. You’ll then need to be on the lookout to ensure you aren’t creating a potential conflict when you take on new clients.

Here’s where this gets expensive.

Imagine that you’re running ads or paying for leads in your local area. A free consultation has prevented you from retaining a paying client due to a potential conflict, one you’ve just spend good money to acquire.

Free consultations generally take more than they give

The more devastating consequences are hidden. These hidden problems make it difficult for your firm to maintain profitability. They ravage your utilization and productivity rates. They decrease billable time and hammer your realization rates.

Are they worth it? That’s for you to decide. While it makes financial sense for some firms, there are far more consequences at play. A large majority of small to medium law firms rely on free consultations; it seems like they’re doing fine. Dig a little deeper, and you may be surprised at what you find.

Revenue leakage is a bad thing. It’s also optional; with the right approach and an emphasis on paid consultations, you’ll generate a steady supply of clients.

Get paid faster with Bill4Time Payments and enjoy the convenience of an all-in-one solution. 

Over the past year, we’ve watched our customers and their firms adapt to the many challenges that COVID-19 has presented. As we enter into a potentially brighter future, we at Bill4Time are honored to continue building new features to help our customers in the new normal and next normal. 

Today we are beyond excited to introduce Bill4Time Payments! Whether a firm is staying remote, returning to the office, or operating in a hybrid capacity, getting paid is paramount. The reliance on clumsy paper checks and outdated billing habits are major challenges for law firms as they try to grow.

Bill4Time Payments allows you to streamline your payments process, collect more on the dollar, and gain financial clarity right within Bill4Time, all with 100% ABA and IOLTA compliance. To celebrate the launch of this game-changing feature, we’re offering a $150 cashback bonus when you sign up now. The cashback bonus will be transferred to your connected operating account after you accumulate $150 in transaction fees for payments received using the new Bill4Time Payments, so there is no risk to give it a try. Here’s how the new Bill4Time Payments works, and why you should enable your free payments account today. 

Get Paid Faster, Collect More, Delight Your Clients

With Bill4Time Payments, you can let clients pay you the way they pay for everything these days — virtually. Your clients prefer a digital payment option, in fact, 78% of them want to pay you online! If you’re still waiting on paper checks, you’re missing out on the speed and financial freedom you get when collecting fees instantly online.   

Get started on your clients’ case quickly by accepting fees instantly, upfront. Providing a “Pay Now” button on your invoices allows your client to pay up to 70% faster than the industry average of 94 days. Providing multiple options such as credit card or eCheck gives your client the freedom of using their preferred payment method.

Needing an attorney comes with its own load of stresses, paying them should be the easiest part of all. The fewer administrative tasks you give your clients, the happier they will be. Clients can save their payment information right within Bill4Time Payments, giving you the flexibility to request instant payment from their account, whenever necessary. No more repetitive forms to fill out and keep tabs on. Even better, giving clients an online payment option results in faster payments, which means you and your team can spend less time tracking collection efforts and following up on overdue invoices. 

Streamline Payments and Get Financial Clarity 

Humans make mistakes, don’t let them make one with your money. Reduce the risk of human error from cash or check deposit data entry, and reduce or eliminate the time spent doing manual payments data entry altogether. Allow Bill4Time Payments to speed up and handle the bookkeeping for you.  

With Bill4Time Payments, you can easily access a clean set of payments data which you can use to stay informed about your firm’s financial health. Receive live insights and track every step of the payments process from the initial invoice to final payment receipt. Does your mailbox send you those analytics?  

Save with Industry-Low Pricing

Every penny counts when it comes to collecting your invoices and with Bill4Time Payments you’ll save tons each month. We offer the industry’s lowest pricing on compliant payments with zero monthly membership fees, only a 1% eCheck transaction fee, and transparent 2.9% pricing on all credit cards regardless of card type. 

Think you know what you’re paying to another processor? You may be surprised as many processors have additional fees or bracketed rates for different card types. If you would like to see if Bill4Time Payments will provide savings to your firm, we are happy to provide a rate comparison free of charge. The majority of the time we find that our rates beat other processors and our customers are often surprised to learn what they are really paying to process payments. 

Enjoy the Convenience of a Compliant, All-In-One Solution 

If you’ve already placed your trust in Bill4Time, why hand your payments data over to a third party? We take data security seriously, that’s why Bill4Time uses 256-Bit encryption and has around-the-clock security monitoring.   

When choosing a payment processor, it’s important to keep compliance in mind. Using a payments processor designed specifically for the legal professional is the best way to ensure both Trust and PCI compliance. Bill4Time Payments is 100% compliant with IOLTA, the ABA, and lawyers’ online payment rules in all 50 states. Operating account payments are available now and trust account payments will be available in June!

Trust account funds are always protected from third-party access and trust and operating funds are never commingled. All processing fees are taken out of your default operating account even for trust payments. Should your client ever initiate a dispute on a transaction, all chargeback access is also directed to the operating account even for trust payments, ensuring that you are always 100% compliant with the ABA Rules of Professional Conduct and the trust payment rules promulgated by all 50 state bar associations. Our team also provides chargeback assistance at no additional cost so you will always feel supported by the Bill4Time team you trust.  

Activate your account today 

Ready to start accepting payments online using Bill4Time Payments?  If you’re already enjoying the benefits of Bill4Time and would like to activate Bill4Time Payments, you may begin your application. Sign up now and a $150 cashback bonus will be transferred to your connected operating account after you accumulate $150 in transaction fees for payments received using the new Bill4Time Payments. If you’re not currently a Bill4Time customer, sign up below to schedule a free customized demo.

Like most organizations across the world, our entire business infrastructure was upended overnight in March of 2020. With teams spread out across the country, we sent everyone home in the name of safety and equipped them to work from home within 48 hours. While 2020 was full of many challenges for our organization, we learned a lot about our team and how we work well together. 

Though there was a steep learning curve for all teams at Paradigm, which Bill4Time is a part of, we’ve since come to embrace our remote environment. In fact, it’s worked out so well that Paradigm has just been officially designated as a Great Place to Work! This recognition is important to us as it comes directly from our colleagues, with 94% of them stating that we are indeed, a great place to work! 

So here we are, after an entire year of constantly testing, learning, and growing as an organization, we’ve come to the conclusion that Paradigm will remain a remote-hybrid company, indefinitely. 

To read more about the factors that went into this decision, and tips on how we’ve been able to make remote work happen effectively, visit the Paradigm blog.