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How Do Consultants Track Billable Hours?

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Legal consultants typically log their time as they work on tasks, using timers or manual entry systems. These methods allow them to track how much time they spend on each activity, providing a clear record of their billable hours.

Many consultants often use legal time tracking software to log their activities precisely. High-quality legal software distinguishes between billable hours vs. actual hours, ensuring every minute spent on client-related work is billed correctly and not overlooked.

An important aspect of this process is determining the increments you will bill time in. But what type of increments can you bill in? Do consultants bill in 15-minute increments? What are the benefits of billing incrementally? In this short guide, we will explore the tools and methods legal consultants use to track and bill their time effectively, as well as the advantages of different billing increments.

How Do You Bill in Increments as a Consultant?

Billing in increments as a legal consultant involves breaking down your time into smaller, standardized units, typically ranging from six to fifteen minutes. This method, common in the legal profession, allows for precise tracking of time spent on various tasks.

Why Use Incremental Billing?

  1. Improved Accuracy: Billing in smaller increments makes sure that every minute of work is accounted for. This method eliminates guesswork, reducing the risk of underbilling or overbilling clients.
  2. Transparency: Clients appreciate the detailed breakdown of tasks. Incremental billing provides a clear picture of how you spend time on a case, fostering trust and transparency in the client-consultant relationship.
  3. Efficient Time Management: For consultants, this method helps in managing time more effectively. By tracking time in smaller units, consultants can better analyze productivity and identify areas for improvement.
  4. Enhanced Client Satisfaction: Clients often feel more satisfied when they see a detailed, itemized invoice. It shows that the consultant has dedicated specific periods to their case or project, justifying the costs and highlighting the value of the services provided.

In the legal field, where precision and accountability are of the utmost importance, billing in increments can help you demonstrate your professionalism. This level of detail shows clients that you only charge for the actual time spent on their case, enhancing their trust and satisfaction.

How Does Billing in 15-Minute Increments Work?

Billing in 15-minute increments involves dividing your work time into 15-minute blocks, each representing 0.25 of an hour. This method can simplify time tracking and invoicing, making it easier to manage and understand.

How Does Billing in 15-Minute Increments Work

To illustrate, consider a case where you’re working on a client’s case for 1 hour in 15-minute increments. The breakdown might look something like this:

  • 15 minutes on a phone call with the client (0.25 hours)
  • 30 minutes researching case law (0.5 hours)
  • 15 minutes drafting a letter (0.25 hours)

You would bill these tasks as 1.0 hours in total. Billing in quarter-hour increments reduces the complexity of time tracking compared to more granular methods like six-minute increments. Legal consultants can quickly tally their billable time, saving administrative effort.

How Do You Bill Time in 6-Minute Increments?

Billing time in six-minute increments involves dividing each hour into ten six-minute segments, each representing 0.1 of an hour. Many legal consultants use this method to ensure that all work is accounted for precisely and accurately. The billing increments chart below provides a more comprehensive breakdown.

How Do You Bill Time in 6-Minute Increments

Let’s say you need to bill for the following tasks:

  • 18 minutes drafting a contract (0.3 hours)
  • 36 minutes on a client call (0.6 hours)
  • 24 minutes reviewing documents the client sent you (0.4 hours)

By breaking these tasks into six-minute increments, the consultant can bill for exactly 0.3, 0.6, and 0.4 hours, respectively, providing a detailed and accurate representation of the time spent on each activity. The two main benefits of billing this way include: 

  1. Precision: Six-minute increments offer a high level of detail, which is crucial for justifying billable hours to clients. You can account for every small task and only bill clients for the exact time spent on their matters.
  2. Reduced Risk of Overbilling: Unlike larger increments, six-minute billing minimizes the chances of rounding up time excessively, which can lead to overbilling and client dissatisfaction.

While tools like a billing increments chart are helpful, legal consultants often use time tracking software like Bill4Time to streamline the process further. Bill4Time can automatically divide time into six- or 15-minute increments, convert it to decimals, and multiply it by your hourly rate. This type of software helps legal consultants optimize their administrative workflows and reduce the potential for human error in manual calculations.

How Do Consultants Charge for Their Time Using Software?

Legal professionals can simplify their entire billing cycle, from entering time to receiving payment, by using time tracking software like Bill4Time. The Bill4Time platform can help you with tasks like: 

Entering Time
Using Bill4Time, consultants can easily start tracking their time. When beginning a task, you can start a timer directly within the software and connect it to any client. If you prefer to enter time manually, you can do so by selecting the client and matter and then inputting the task’s duration.

Generating Invoices
Once you’ve logged your time on a case, Bill4Time can generate detailed invoices. These invoices include a breakdown of each task performed, the time spent, and the corresponding fees. Bill4Time automatically calculates the total billable amount based on the consultant’s hourly rate. For example, if you log 3.5 hours of work at $200 per hour, Bill4Time will generate an invoice showing a total of $700.

Sending Invoices and Receiving Payments
Bill4Time simplifies the invoicing process by allowing you to send invoices directly to clients in multiple ways: email, text, or the Bill4Time client portal. You can customize the invoices with your logo and branding, building credibility. Clients can then make payments online through Bill4Time’s native payment processor, making the process convenient for both parties.

Ready to streamline your billing process and improve your efficiency? Sign up for a free trial of Bill4Time today or schedule a free demo to see how it can support your consulting practice.

How Do I Track My Billable Hours?

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Lawyers track billable hours in a variety of ways, some more effective than others. The two most common methods for tracking billable hours are:

1. Legal Software: Many attorneys rely on specialized legal time tracking software with built-in timers and task-tracking capabilities. This technology allows for accurate logging of hours spent on client-specific activities. Each entry is tied directly to client cases, making billing and financial tracking seamless.

2. Manual Timekeeping: Some practitioners still prefer traditional methods like spreadsheets or handwritten logs to record their time. For those who prefer manual timekeeping, keeping billable hours vs. actual hours separate demands high discipline to ensure accuracy.

Choosing the right method can make a big difference. To help you decide, let’s explore what billable hours involve and how you can manage them effectively.

What Is an Example of a Billable Hour?

What Is an Example of a Billable Hour?

A billable hour is time spent on tasks that directly benefit a client. For example, when you are drafting a legal document, that’s a billable hour. Meeting with clients or opposing counsel also counts. These tasks involve using your expertise to move a client’s case forward.

Other examples of billable hours include:

  • Researching case law
  • Preparing for trial
  • Reviewing a case file
  • Attending court hearings
  • Taking depositions
  • Consulting with experts
  • Attending mediation 

It’s important to separate billable hours from non-billable ones. Time spent on administrative work, like managing your firm’s website or attending internal meetings, isn’t billable. The key is to keep your billing clear and honest. Billing accurately builds trust with your clients and ensures you’re compensated fairly for your work.

Using proper timekeeping practices helps you log these hours accurately. Legal software is particularly beneficial in tracking your time efficiently, reducing the risk of errors that occur with manual logs.  Whatever method you choose, make sure you track your time in a way that works best for you. This way, you won’t miss out on billing for any work done.

For additional guidance, you can use UTBMS (Uniform Task-Based Management System) codes to determine what qualifies as a billable hour. These codes standardize legal work, billing, and categorization, making it easier to track and bill accurately. You can find more information on UTBMS codes here.

How Do You Account for Billable Hours on the Go?

Tracking time efficiently and accurately has always been challenging, but the rise of remote and hybrid work has added complexity. Modern lawyers now work on the go and in different locations, making it more difficult to track hours in real-time.

However, mobile apps and digital platforms designed for lawyer time tracking can help with logging hours in real-time, no matter where you’re working.

For example, Bill4Time offers sophisticated timekeeping tools to capture both billable and non-billable hours in real time from any device with an internet connection. With the accompanying mobile app, you can easily set and stop timers, pick up where you left off, and convert appointments into time entries from any device at any time.

Though trying to figure out how to track billable hours in Excel or building a billable hours calculator in Excel might seem like viable options, they often end up being tedious and error-prone. Legal time tracking software makes things easier and more accurate, so you can rest assured your billing is correct.

How Do You Account for Billable Hours on the Go

How Do I Calculate Billable Hours?

Logging and tracking hours is only one part of the equation — you have to calculate your billable hours, too, starting with choosing an appropriate billing increment.

The standard 6-minute increment is the “sweet spot” for time, but it’s also easy to calculate. 6-minute increments are 1/10th of an hour. To calculate time, divide the time spent in minutes by 6, which is equal to 0.1 of an hour. So, for a 37-minute task, you would have six increments or 0.6 hours.

Similarly, if you use 15-minute increments – another common increment in the legal industry — you would divide the number by 15. Each time increment is 0.25 of an hour, so 45 minutes of work equals .75 hours for billing. This calculation is often second nature, since we tell time based on quarters of an hour.

Once you have your work time represented in hours, you must calculate your billable hours. Multiply the increment by your billable hours rate for billing.

For example, if you worked for an hour and 10 minutes with an hourly rate of $300, the calculation would be 1.2 x $300 = $360. The $360 total is what you’ll bill to the client for that time, plus any other hours or expenses.

Tips for Calculating Billable Hours

The billable hours process takes time to perfect. Here are some best practices to ensure accuracy and efficiency:

  • Understand your billable and non-billable activities, such as client meetings and case research (client case) vs. billing and invoicing (administrative).
  • Stay consistent with your timekeeping practices, including your billing increments and hourly rate, the tasks you bill for, and how often you bill clients. This process ensures you are transparent and builds client trust while minimizing the risk of errors.
  • Track your financial performance with billable and non-billable hours. Look for trends to determine what tasks are profitable for your firm, what tasks aren’t, and how you can improve efficiency and productivity.
  • Use time tracking software to record your billable hours accurately. Investing in professional, legal-specific time tracking software offers more capabilities and features to elevate your time tracking and billing processes.

How Can I Track My Billable Hours for Free?

While you can track your billable hours for free using basic apps, these often lack security or features specific to lawyers. Some other limitations include:

  • Data Loss: Inadequate security can lead to lost time entries and compromised data.
  • Manual Errors: Free apps can lead to manual entry mistakes, resulting in inaccurate billing.
  • Lack of Real-Time Tracking: Some free apps do not offer real-time tracking, making it easy to miss logging crucial billable hours.
  • Security Risks: Free apps often have weak security measures, risking sensitive client information.
  • Restrictions: Free apps may limit the number of clients or projects you can manage and might display annoying ads.
  • Limited Features: Even the best free time tracking app may lack essential features like advanced reporting note-taking capabilities.

A free billable hours tracker for employees at your firm might seem attractive, but free versions often have hidden costs. Security risks, missing features, and the potential for errors make them less suitable for professional use. Investing in specialized legal time tracking software can enhance your practice’s efficiency, provide peace of mind, and help you serve your clients better.

For example, you might find Bill4Time a valuable solution. It offers automatic time capture, secure data storage, and detailed reporting, making tracking and billing straightforward. Check out a free demo or start a free trial to see how it works for you.