Originally published on August 17, 2009 in our free SmallLaw newsletter.
Lawyers are intimately familiar with the need to harness time. Even those who work on a contingency or flat-fee basis know that timesheets and expense records are the lifeblood of the profession. But does billing have to be so prone to error and subject to endless second-guessing? Can we ever have 100% confidence that our bills won't be challenged?
Not as it stands now. Sure, software is available to help tame the billing monster, but choices are limited and none of the major vendors offers a true solution. The most popular tool is an electronic stopwatch of sorts, but if you still enter time manually on a computer or mobile phone then you haven't solved the problem. The only reliable way to truly harness and accurately track the billable hour is to empower our office equipment (fax machine, phone, computer, printer, copier, scanner, smartphone) to become timekeepers.
The Problem
Soon after becoming a lawyer I learned firsthand that billing was not about time so much as it was managing client expectations. Billable time and chronological time often do no relate to one another at all. How else could you explain the fact that a document drafted in 6 hours can generate more fees than a real estate transaction that takes the same amount of time to negotiate and close? It's enough to make you wonder whether there's any point in keeping time records at all. And for those willing to try, a number of barriers exist:
- It is virtually impossible to track everything you do.
- Some events are just too short to track at all.
- Keeping records interrupts your workflow.
- Records are only as good as your stopwatch.
- Ensuring the accuracy of records is challenging.
- Predicting the future follow-up time is difficult.
There is a payoff for keeping good records despite the odds. By the time your firm issues invoices the underlying work is usually a fuzzy memory. If clients want to question their bill or delay payment all they have to do was demand proof that a particular event occurred (or at least that it took as long as the bill says it did). Only a solid set of records can address such questions.
Unfortunately for my first employer, he chose not to invest in defensible timekeeping methods so most of the time he had no way of supporting his invoices. I vowed to do better when it was my turn to run a practice.
The Non-Solution
In 2000 I started my own firm and deployed a system to gather time electronically. At first the results were a revelation. Even with 5 timekeepers (3 lawyers, 2 paralegals), I could issue and collect invoices in a fraction of the time it had taken my former employer and still be confident that they were accurate.
Before long however, it became apparent that the system was only as good as the timekeepers: garbage in meant garbage out. Invoices could still be attacked, and employees could still short-change the office by failing to record time. In fact, the more timekeepers we had the more mistakes, duplicates, and stray entries I had to clean up. Eventually the billing process consumed five days per month and I had to admit that the system was broken. I needed a smarter solution.
Web 2.5 to the Rescue
In 2004 Flickr, Digg, Blogger, and others showed us that Web-based applications could thrive by doing one thing well instead of being all things to all users. As innovative as they were however, such Web 2.0 sites did not address the practical needs of small law firms.
In the last few years however, products like Basecamp, Bill4Time, Caseload, Clio, Rocket Matter, Tempo, and others have developed Web-based applications that apply directly to our practices. What's more, applications such as AirTime-A4P, Chrometa, Element55, RescueTime, MonetaSuite, and WorkTRAKR automatically track activity, eliminating the need for you to enter your time. While you must make sense of all the activity captured and convert it into time entries, you won't have to worry about forgetting any activities or having incomplete records should a client object.
Can this group of next-generation time-capture solutions solve our billing problems? My answer is a definite "maybe." But that's okay because whether the winning application is one of the contenders listed above or just an idea taking form in the mind of a software engineering student at Stanford, we already know enough to know that automatic time capture represents the future of hourly billing. The only question is which product(s) will emerge as the killer app in this category — much as WordPerfect changed legal writing in the 1980s. Until we know, we will all just have to keep billing the old fashioned way.
Written by Mazyar M. Hedayat of M. Hedayat & Associates, P.C.
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