The billable hour is often referred to as “the cockroach of the legal world.” Like it or not, it keeps coming back. Most attorney’s use this as the sole source for measuring productivity. But it’s only the tip of the iceberg. By ignoring all of the non-billable time and expenses that go into running a law firm, you leave yourself powerless to make important business decisions.
Tips for measuring employee value:
- Be careful not to limit your analysis to “billable hour value” vs. “cost to employ.” Many employees contribute to firms in ways that are difficult to place a dollar value on.
- Always capture time for non-billable events, like conducting performance reviews, reviewing pre-bills, attending CLE, etc. Without this information, how can you really analyze your staffing needs?
- Even flat fee and contingency attorneys should track the time they are spending on matters. You can never tell whether you are making money if you don’t know how much time you actually put into a case.
- Pay attention to the attorney’s “collection rate.” If you have any bonus arrangements with associates based on billable hours, do you really want to payout bonuses on fees you haven’t yet collected from the client?
We’ve created a step-by-step guide that walks you through the process of measuring billable and non-billable time, calculating profitability on areas of practice, employees and flat fees, tracking expenses and much more. Make sure you’re seeing the big picture before you make another business decision – download the full whitepaper today!
This Step by Step Guide will walk you through:
- How to determine whether each firm member is productive
- Tracking billable & non-billable time to make staffing decisions
- Calculating an attorney’s “lost fee opportunity”
- How to tell if you’re making a profit on flat fees
- Determining which areas of your practice are losing money
- Rethinking compensation based on “billed” vs “collected” fees
- Simple techniques for recovering your expenses