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How Automatic Time Tracking Can Boost Profitability and Decrease Your Workload
As technology changes, it’s common to look back at the past and wonder, “How did they do it?”
How did businesses run smoothly without email?
How did companies compete without phones?
How did people work under deadlines without coffee? (OK, that’s going way back.)
New tools and technologies are emerging every day that provide law firms with advantages and opportunities. These tools, like generative AI models and automatic time tracking, can potentially boost a firm’s profitability and decrease its workload—significantly.
Automatic time tracking empowers teams to thrive and grow. When integrated into legal practice management software, it makes it easy to track how legal staff spend their time each day. That data can be used to automatically draft client invoices each month for review.
Even better: time trackers don’t just accurately track time and facilitate automated billing. They also combine with detailed reporting to give law firm leaders the information they need to make data-driven decisions that launch their practice to new heights.
How automatic time tracking boosts profitability
Automated time trackers are an integrated tool within Rocket Matter’s practice management software. Because they are included as part of practice management software, these trackers transfer logged time directly to a law firm’s billing system and provide accurate, seamless time-tracking records.
Another benefit of automated time trackers is that they are mobile-friendly. Instead of losing time trying to replicate hours spent at the courthouse or fielding a call while away from the keyboard, legal professionals can simply pull up a mobile app and capture all relevant data in the moment.
As a result, law firms can minimize lost time and profit, set accurate fees and rates, and make decisions that enhance short-term and long-term profitability.
Eliminate lost time and lost profit
Legal staff have a lot going on in their day. From court filings to client communications, there are always pressing matters that require immediate attention. As a result, tracking billable hours can often fall by the wayside and get treated as a last-minute task at the end of the day or week, something jotted on a sticky note and soon buried under the next 100-page contract that needs reviewing.
This type of manual time tracking isn’t sustainable—or profitable. According to the American Bar Association, attorneys who wait until the end of the day to record their hours can lose 10% of their billable time. And lawyers that track time hastily often have to spend more time reviewing client invoices, which eats into billable hours.
That’s where automated time trackers come in. Automated time trackers, especially those with various tracking options, ensure that staff track time accurately as they go, ensuring law firms are paid correctly for their work and spend less time correcting invoices at the end of every month.
Demystifying the Billable Hour: How to Right-Size Your Rates
With prices rising so much over the last year (global inflation is forecasted at 8.8% in 2022), it’s the right time to look at your current rates and see if you’re charging enough to remain profitable.
Establish accurate fees and rates
Law firms that offer fee structures beyond the billable hour need to know how much time is required for each project type. To do this, firms often draw on historical data and records of internal costs to set estimated fees. But if your firm underestimates the amount of time it takes to resolve a flat-fee case matter, you could be significantly underpaid for your work.
By using an integrated time tracker, legal staff can learn exactly how much time and resources go into different types of projects, from partner billable hours to clerical tasks and expenses.
This practice helps firms create a billable rate that reflects all the effort they put into client matters.
Use data to make decisions to increase profitability
Accurate data is key to making the best decisions for your team.
Automated time trackers that integrate with legal practice management software have another advantage: they enable you to get detailed reports that can reveal barriers to increased profitability.
Here are some examples of issues that reports may turn up:
- Your project estimates are too low, and you need to increase your rates to reflect the value your team provides to clients
- Certain projects require a disproportionate amount of clerical work and would benefit from a combination fee structure to take into account significant additional work
- A certain type of project is incredibly profitable for your team
Based on these insights, your law firm can make decisions that can boost your bottom line, such as pursuing more profitable service areas and minimizing exposure to legal matters that result in less-than-ideal profit margins.
How automatic time tracking reduces workloads
We’ve seen how automatic time tracking directly increases a firm’s profitability, but it can do more than that: tracking your time can also lighten the workload through billing system integrations, compliance assurance, and more efficient resource allocation.
Create more efficient billing practices
Manual time tracking doesn’t just lead to lost time for your firm on a daily basis—it leads to lost time every month in the form of inefficient billing practices.
With manual systems, legal teams must spend more time reviewing cases with staff, resolving discrepancies, and ensuring that numbers match up across systems. Time trackers eliminate this inefficiency and decrease the time it takes to process billing every month.
Because they can integrate with your law firm’s billing software, time trackers allow your staff to generate invoices based on the hours logged per each client code, and process multiple invoices at once. In practice, this means legal staff only has to review invoices for accuracy (not assemble them painstakingly each time). And with integrated billing software, law firms can send invoices with secure links for online payment.
Less work for your team. Less work for your clients. It’s a productivity boost for everyone involved.
Ensure ABA compliance
Manual time tracking leaves the door wide open to human error when it comes to billing, which can lead to time-consuming mediation with clients and an increased likelihood of audits. Also, it can be more difficult to explain discrepancies or large increases in billable time for a particular client.
Overcharging clients, whether on purpose or by accident, can lead to serious consequences for law firms, affecting their bottom lines and reputations.
ABA Model Rules of Professional Conduct Rule 1.5 prohibits attorneys from collecting unreasonable fees for expenses. If a firm is suspected of breaking this rule, it can result in mediation, audits, and a lot of late nights.
So don’t expose your firm to risk. Instead, minimize risk to protect your law firm’s reputation, productivity, and client relationships.
Allocate resources for streamlined operations
Accurate data analysis is critical to making decisions that favor your law firm’s productivity. With an automated time tracker, managers can learn exactly what workload each staff member can handle.
Through accurate reporting, managers can understand staff performance across a wide range of operations. It can reveal the areas in which certain team members excel and which team members may be underperforming. Armed with the correct information, managers can make decisions about employee positions and responsibilities. This can optimize law firm productivity and play to each team member’s strengths (because employee satisfaction is also important!).
Launch your firm to new heights
With Rocket Matter’s integrated automated time tracker, law firms can decrease workloads and boost productivity. Try this convenient, legal-specific technology, and you may soon be wondering, How did I ever get it done before? Schedule a demo today to save time and money with Rocket Matter.
Demystifying the Billable Hour: How to Right-Size Your Rates
With prices rising so much over the last year (global inflation is forecasted at 8.8% in 2022), it’s the right time to look at your current rates and see if you’re charging enough to remain profitable.
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