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Time Tracking Policies Every Law Firm Should Have
If you magically had an extra day in the week, how would you spend it? Catching up on work, catching up on chores, or catching up on Netflix?
If you’re a busy lawyer (is there any other kind?), you’d probably be tempted to choose work. Time is always in short supply, and there are always more tasks to check off your to-do list.
From working with clients to juggling court appearances and operational work, the time that’s spent on every task directly affects your firm’s efficiency and bottom line. And so, it’s paramount to consistently track your hours and categorize them appropriately.
Comprehensive time-tracking policies can enhance productivity, protect financial health, and prevent thorny issues like compliance violations and strained client relationships.
Why time-tracking policies matter
Law firms experience unique challenges in managing time effectively. The nature of legal work often involves tracking billable (and non-billable) hours, keeping clients satisfied, and staying compliant with industry regulations.
A well-thought-out time-tracking policy can serve as a roadmap that provides clarity and consistency across the firm.
By implementing policies for tracking your time, your firm can easily manage several critical issues.
Compliance requirements
For any legal professional, your work needs to align with various regulations and ethical standards. A comprehensive time-tracking policy ensures that your firm complies with industry-specific requirements, reducing the risk of legal complications.
Client trust and transparency
When it comes to billing, your clients expect transparency and clear communication. A solid time-tracking policy can foster trust with clients by providing a detailed breakdown of the work performed, giving them a clear understanding of the value of your services.
Effective resource allocation
Effective time tracking enables law firms to allocate their resources efficiently. When you have a better picture of how much time is spent on different tasks, law firms can optimize workflows, enhance productivity, and allocate their resources more effectively.
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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.
Components of an effective time-tracking policy
Log your hours and bill your clients? There’s more to time tracking than that. To cover all your bases, here are the components of a comprehensive policy and the tools you need to implement it.
Statement of position on time tracking
The first step in creating an effective time-tracking policy is outlining your firm’s position on how you’re logging hours and billing clients.
Articulate your firm’s commitment to accurate and transparent time tracking. Emphasize the importance of time tracking in maintaining client trust and achieving financial success and establish consequences for non-compliance to encourage firm-wide accountability.
Define your key terms
To make sure you and your team are on the same page for your processes, provide precise definitions for times like “billable hours,” “non-billable hours,” “client matter codes,” and any other industry-specific terms.
When you eliminate ambiguity around terms, everyone at your firm can operate with a clear vision of your policies and apply them to their work.
Time-tracking tools
While it’s possible to track your time manually, this process eats into your available hours and results in lost billable time or inaccuracies with billing caused by human error.
Consider investing in time-tracking software and make sure that the tools you use are user-friendly, industry-specific, and comply with industry standards. Look for features like automatic timers, mobile apps, email integrations, and integration with your practice management system.
Recording time entries
Make sure your team is on the same page regarding how time entries should be recorded. Detail the process of recording time entries, including the frequency with which they should be submitted and the level of detail required.
It’s vital to emphasize the importance of accuracy in time entries and the need for real-time recording (as opposed to at the end of the day or week).
Client matter codes
If you want your time-tracking processes to remain organized and efficient, it’s essential to establish a system for client matter codes to categorize time entries by client and matter.
Make sure that your client matter coding system is uniformly implemented across your firm to facilitate accurate tracking and reporting.
Outline billable vs. non-billable tasks
Provide your team with a clear outline for categorizing time as billable or non-billable. Provide examples to guide staff members in making accurate classifications to avoid costly mistakes or client misunderstandings.
What information to include in time records
Clearly outline the essential details that should be included in each time record, like date, task description, client/matter code, and duration.
Creating a uniform system that emphasizes the importance of completeness and accuracy will keep your team on the right path when they track.
Share your time-tracking policy with attorneys and legal staff
If a policy is written in an office, but no one shares it, was it really written?
Yes, but that doesn’t mean it will be followed. A time-tracking policy is only effective if it’s communicated clearly and consistently across the entire firm.
Follow these steps for smooth implementation:
- Communicate your policy in a firm-wide meeting to ensure that each member of your team knows what to do moving forward.
- Create training programs to educate your team on the proper use of time-tracking tools and policy guidelines.
- Provide detailed documentation to serve as a guide for your tracking procedures.
- Encourage staff to provide feedback on the policy so you can make adjustments if needed.
If there are questions or concerns about how to use time-tracking tools, reach out to your software service provider. They should provide opportunities for training, including knowledge base resources and webinars.
Keep your firm on track with Rocket Matter Track
A well-crafted time-tracking policy is a cornerstone of the success of any law firm. If done well, your policy can aid in addressing compliance issues, enhancing client trust, and optimizing your resource allocation.
If you’re looking for a tool to take the heavy lifting out of tracking time and strengthen your firm’s operational processes, then it’s time to invest in practice management software with top-notch time tracking.
To make sure you never lose a minute of billable time and benefit from features like invoicing and billing solutions that get you paid on time every time, Rocket Matter is your comprehensive solution.
Schedule a demo or start your free trial today to make tracking your time a snap.
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