For law practices, billable hours are the difference between making a profit and suffering a loss. This means that every legal professional — from the paralegal to the firm partner — should understand how to define billable hours and how to make the most of them. To help you increase your business income, here are a few key tips to remember about billable hours.
1. Understand the Definition.
To bill for something appropriately, first, you must understand what it is. If you don't know if something is billable or not, you are likely to undervalue it and leave money on the table. Conversely, if you're overestimating what you can invoice, you could lose out if the client questions your numbers.
Generally, billable hours are those that benefit the client by moving their case or project forward in some manner. So, sending a related email inquiry could easily be billable time whereas reworking a report done in error the first time may not be.
2. Track Time Thoroughly
Even if you know what you can bill for and what you can't, you'll need a way to properly track that time. Failure to count all potentially billable work and time is a problem for many busy professionals.
Track time as close to the event as possible — preferably in real-time — to guarantee the most accuracy. If possible, use automated tracking and detailed logs of activity. And don't consider any work as 'too small' to be tracked. Those five-minute phone calls add up quickly.
3. Maximize Billable Work
Analyze how much you're doing throughout the day to see how much of it tends to be billable versus non-billable. If you spend significant time on projects or tasks that aren't on any invoice, this is time you can't spend doing work that boosts income.
As you track your non-billed work, look for ways to reduce it. If you find that you're spending a lot of time doing accounting work, for instance, you may want to outsource the books so that you can focus on billable projects. Then, maximize billable time by contracting early in the relationship, setting goals for each client each day, and doing unwanted tasks first so they get done.
Want more tips for boosting your billable income? Consider working with a legal billing consultant. Having a professional on your side will help you find both strengths and weaknesses in your own billing systems. Call today to make an appointment and learn more.