In the legal profession, time is more than just a resource—it’s a currency. Billable hours are the lifeblood of law firms, dictating revenue, client costs, and even career advancement.
However, mastering the art of tracking and maximizing billable hours can be a challenge, especially with the pressures of balancing client work, administrative tasks, and personal time.
In this post, we’ll dive into the essentials of billable hours for lawyers, explore common challenges, and share practical strategies to optimize your time while maintaining high standards of service. Whether you’re an associate or a partner, this guide will help you make the most of every minute.
What Are Billable Hours?
Many lawyers work on an hourly basis, charging a flat rate per hour they spend working on a case.
As you might imagine, billable hours are hours you spend on work that can be billed to clients. In other words, this is time you spend on a client’s case, rather than on administrative tasks.
Although lawyers often work long hours, many of these may not be billable. In fact, you may be shocked to learn that on average, lawyers only bill for 30 percent of the hours they work.
Average Billable Hour Rates
So if lawyers typically charge hourly rates, how much do they charge?
Hourly rates can vary enormously based on a variety of factors, including
- Your geographic location – Lawyers based in areas with a higher cost of living will make more than those based in less expensive areas.
- Your practice area – Practice areas like intellectual property law and corporate law are more lucrative than areas like juvenile and family law.
- Your experience – The more years of experience you have, the more you can reasonably charge.
That being said, lawyer hourly rates tend to range between $140 and $350.
Why Is Tracking Billable Hours Important?
Tracking billable hours can be incredibly tedious, so why is it so important for lawyers?
If you’re not a partner, your salary may not be tied to the number of billable hours you work, but your job safety may be.
Firms rely on meeting a certain number of billable hours to meet their financial goals, and every lawyer has to pull their weight. If you aren’t meeting your billable hour requirements, your name could be at the top of the list if the firm is looking to lay off staff.
If you’re a partner, your income could be directly impacted by the number of hours your firm bills for.
Equity partners typically split the firm’s net profits (once all the overhead expenses and staff salaries have been paid out). More billable hours means more firm revenue, which means a higher share per partner.
And no matter what your role in the firm, being able to accurately bill for the hours worked helps to ensure that the firm can stay open for business.
How to Calculate Billable Hours
Typically, lawyers don’t calculate their billable hours only in one-hour increments. Because attorney hourly rates tend to be so high, rounding up would cost clients a lot of extra money, and rounding down would cost lawyers a lot of extra revenue.
Instead, lawyers tend to bill either in six- or fifteen-minute increments. They divide their hourly rate either by four or ten, depending on which increment they’re using and bill for each of these time segments.
For instance, let’s say a lawyer has an hourly fee of $250 and works for three hours and eighteen minutes on a case.
If that lawyer bills in six-minute increments, they’ll have worked for 3.3 hours on the case. They’ll be able to bill $825 for that period of work.
Billable Hour Requirements
Many law firms set specific requirements for a number of billable hours their lawyers must work each year. As we discussed above, this helps to ensure the firm can meet its revenue requirements and that each lawyer is pulling their own weight.
Typically, law firms require that their lawyers work between 1,700 and 2,300 billable hours per year, though it can vary by firm, practice area, and experience.
What Percent of Work Hours Are Billable?
Now on first glance, being required to work (on average) 2,000 billable hours per year may not seem terrible. After all, forty hours of work per week times fifty working weeks per year works out to exactly 2,000 hours of work per year.
But remember what we talked about at the beginning of this post: on average, lawyers only bill for 30 percent of the hours they work. The rest are spent on administrative tasks.
So let’s say you have to work 2,000 billable hours per year and only 30 percent of the hours you work are billable. That means you have to work 6,000 total hours per year to meet your requirements, which turns into working 120 hours per week in a fifty-week year.
This may mean working lots of Saturdays (500 extra hours if you work ten hours every Saturday of the year except two), plus working several holidays and working extremely long hours every working day.
As we’ll discuss more later, this kind of break-neck pace can start to wear on you over time.
What Are Nonbillable Hours?
So if most lawyers are only billing for 30 percent of the hours they work, what’s happening with the other 70 percent of their hours?
Nonbillable hours can cover a wide variety of tasks, including
- Clerical work (photocopying, filing, etc.)
- Attending company meetings
- Travel time not specifically related to a client’s case
- Managing non-attorney employees
- Pro bono legal work
- Checking and responding to emails
- Sending bills and recording payments
- Managing marketing efforts for the firm
- Continuing education, including training on new software and programs
Of course, depending on your particular role in the firm, some of these tasks may fall outside of your responsibilities. But even things like checking email and attending meetings can eat up a shocking portion of your work hours.
How to Manage Billing for Hours
There are several things you can do to make the time tracking process easier as you’re recording your billable hours.
Enter Your Time Immediately
First of all, it’s imperative that you enter the time you spend working onto a case into your tracking system immediately.
If you have a busy day or a lot of catching up to do, it can be easy to think, “Oh, I’ll just record this later.”
But the truth of the matter is that later won’t be any easier to manage than right now, and by then, you may have forgotten exactly how much time spent on the task. Look back to our example from earlier; being off on your estimate by just six minutes could cost your firm $25.
Force yourself to get into the habit of recording each task as soon as you finish it, including making notes about what you did.
Break Down Larger Tasks
Some days, you may spend a huge chunk of your day working on one client’s case. When you’re recording those billable hours, you may be tempted to record all of these as one block.
Instead, it may be a good idea to break down those blocks of time into smaller chunks. For instance, instead of noting you spent four hours drafting and reviewing a document, communicating with the client, and adjusting your files based on that conversation, note how much time you spent on each task.
This style of notation does a few things; for one, it gives your clients greater transparency on your work. This can build their trust that you’re not wasting time (or their money) and may even help to settle any disputes that arise.
Noting your time like this can also give you a better sense of how much time it takes you to accomplish each type of task. This can make it easier for you to plan your day, and it can give you some insight into where your billable hours are going.
Bill for Short Tasks
Although it may seem like a waste of time, especially on busier days, it’s imperative that you bill for even short tasks.
A task that takes twelve minutes may seem hardly worth recording, but keep in mind that a half-dozen of these a day represent a full billable hour that you could be losing.
You’re already doing this billable work, and this is the simplest way to reclaim billable hours from that vast percentage of nonbillable working hours.
Improve Billing Descriptions
It’s also a good idea to focus on improving the descriptions you include with your billable hour records.
Remember, the goal of these descriptions (aside from your own record-keeping) is to let clients know how you’re spending the time they’re paying you for. Generic statements like “document review” don’t really give them any insight into what you’re reviewing and why.
Take a few extra seconds and clarify what you’re doing during these blocks of time. What document are you reviewing, and what are you looking for in that document?
This provides more clarity for your clients, helps to build trust, and can reduce the amount of time you have to spend talking to clients and clarifying what they’re being billed for.
Automate Your Billing Processes
Billing can be one of the more tedious and time-consuming tasks in managing a law firm. One great way to reduce the amount of time you have to spend on non-billable work is to automate billing processes.
Several legal practice management programs allow you to set up recurring billing for ongoing cases, automatically compile invoices from the billable time you’ve tracked through the program, and even integrate with your payment platform to track payments, all in one place.
You may also be able to track when payments are overdue and automatically apply late fees, all without you having to lift a finger.
Outsourcing this work to management programs can help you reclaim some of that nonbillable time and make sure you aren’t losing money.
Tools for Tracking Billable Hours
There are several tools that you can use to keep up with the hours you bill for.
You can use manual tracking systems like calendars, spreadsheets, or a log book, but these methods are time-consuming, tedious, and prone to errors.
More and more these days, lawyers are turning to dedicated legal time-tracking software. These programs are specifically designed to make the time-tracking process as seamless as possible.
Often, legal practice management software comes with integrated time-tracking software. Not only does this allow you to keep all your firm information in one place and at your fingertips, but you may also be able to integrate your invoice generation with your time-tracking software.
How to Maximize Billable Hours
There are several things you can do to maximize the number of billable hours you’re working and make sure you meet your firm’s requirements.
Prioritize Self-Care
It may sound counterintuitive, but prioritizing self-care is one of the best ways to meet your billable hour goals.
In an effort to meet your billable hour requirements, you may be tempted to work around the clock, through weekends, and on holidays. You may never get a full eight hours of sleep or take time to hang out with friends or engage in hobbies you love.
And while this may work at first, it won’t be long before you burn out. You can’t sustain that kind of pace long-term, and in time, you may find yourself struggling more and more at work, dealing with more anxiety and depression, and even falling into substance abuse disorders.
Prioritizing self-care can help you find a sustainable pace that will keep you working at the top of your game for the long run.
As often as you can, get a full night’s sleep, and prioritize eating nutritious, balanced meals with lots of fresh fruits and vegetables. Try to engage in a form of movement you enjoy on a regular basis, whether it’s a session at the gym, a run around your neighborhood, or just dancing to your favorite songs while you’re getting ready in the morning.
It’s also vital to make time to spend with the people and pastimes you love. Engaging in a hobby and socializing with your friends and family can help to reduce depression, lower anxiety, and boost your mood.
Batch Tasks
When you are at work, make an effort to group similar tasks together and work on the same type at the same time.
You lose a staggering amount of time just switching from task to task; batching tasks helps to reduce the amount of time you have to spend getting prepared for your next task and getting into the flow of that work.
Set specific times during which you’ll respond to emails and return phone messages, and try to avoid checking email outside of those windows. If you have a few case files to review, do all of those at the same time before moving on to drafting documents, and so on.
This kind of task organization allows you to get deeper focus on each of these tasks and avoid losing precious minutes to switching between tasks.
Limit Non-Essential Meetings
Meetings can eat up huge amounts of your workday, and if they’re not with clients specifically to discuss their cases, all of this time is non-billable. Even a short meeting may be fifteen minutes; think about how many other tasks you can complete in that time.
Wherever possible, take the meme “This meeting could have been an email” to heart.
Before you call a meeting with your colleagues, consider if you can accomplish what you need to over email, on a project management platform, or in your legal practice management software. Is there a specific reason you need to hold a check-in meeting, or are you just doing it out of a sense of routine?
As much as possible, limit your meetings to those that directly impact progress in your cases or outcomes for your clients. You’ll be surprised how much of your day you can reclaim.
Be Proactive in Communicating with Clients
One great way to cut down on the time you have to spend in meetings is to be proactive in communicating with your clients.
On the face of it, this may seem counterintuitive; after all, the more time you spend on client communication, the less you can spend on other billable tasks. But putting off that communication can actually come back to bite you later.
When your clients don’t know what’s happening with their cases, they may start to lose trust in you and may wonder what they’re paying you all this money for. You’ll then have to spend longer reassuring them and convincing them that their money is well-spent, and in some cases, it may take them longer to pay the bills you send them.
The good news is that some programs can actually help you automate this communication. Tools like Hona allow clients to track the real-time progress of their case without you having to manually update them. Some legal practice management software may also allow you to send out automatic updates to your clients.
Set Daily Goals
The best way to eat an elephant is one bite at a time, and the same goes for your yearly billable hour goals.
Working 1,800 billable hours in a year may seem impossible, but breaking that time down into daily goals can make it feel much more manageable. This also allows you to track how you’re progressing toward that goal so you aren’t caught by surprise at the end of the year and left scrambling.
So let’s say you need to work 1,800 billable hours a year; that works out to about seven hours and fifteen minutes of billable work per day. Take a few minutes at the end of each day and look at how many billable hours you worked, what impacted that total, and what you can do better the next day.
It won’t be long before you have a really good idea of what you need to do to stay on track to meet your goals by the end of the year.
How Many Billable Hours Are Realistic?
So now we know a little more about how to maximize your billable hours and meet your goals, let’s talk about what realistic goals might be.
As we mentioned, many law firms require their lawyers to work between 1,700 and 2,300 billable hours per year, depending on their situation. This means working between 142 and 192 hours per month, or between seven and ten billable hours per day.
If you’re at the top end of that spectrum, you may need to consider whether it’s better for your mental health to work longer hours on the weekdays or work six days a week.
Alternatives to Billable Hours
If all of this talk about time tracking and billable vs. non-billable hours is giving you a headache, we have good news! There are a few alternatives to billable hours that you may be able to implement at your firm.
Many personal injury lawyers bill on a contingency basis. Instead of charging for the time they work, they take their fees from a percentage of the money they recover for their clients.
Some lawyers – especially those who do very predictable, routine work – bill on a flat fee basis. Rather than tracking their billable hours, they have one set fee that they charge for a certain scope of work.
Other lawyers prefer to use a subscription model, where clients pay a regular subscription fee to gain access to a range of services.
There are also several variations on billable hours that allow lawyers to better meet their clients’ needs. These can include
- Retainers – Your client pays in advance for a certain number of hours of legal work.
- Scalable fees – Your firm adjusts fees based on a client’s financial situation.
- Blended fees – Rather than lawyers with more seniority charging more per hour, every lawyer in the firm has one flat hourly rate.
- Capped fees – You and your client set a cap on the amount of money they’ll pay for work on their case before you begin work.
- Budgeted fees – You and your client agree to a specific budget detailing what the money they’re paying will cover.
All of these models still require you to track your hours, but they may allow you to tailor your billing structure to meet your specific needs.
It’s also important to note that even if you choose to use one of these alternative models, you may still need to track your hours. In that case, that tracking will be used to help inform the rates you set (especially in a flat fee structure) so you know you’re charging an appropriate amount for your work.
Devote More Time to Billable Work
Billable hours are an important tool that allows lawyers to bill their clients accurately for the work they’ve done. An unfortunate number of work hours have to be dedicated to non-billable work, so not all the hours you work will go toward that quota. Luckily, there are several ways you can optimize your work to improve your percentage of billable hours.
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