Is time recording a thing of the past?
It’s no secret that time recording is becoming less and less prevalent in the modern era.
The ubiquitous fixed fee seems to have taken over and is being pursued hotly by scalable fees and fee arrangements assembled from a menu of options. So what remains for the traditional fixed fee and is there still a place for time recording in general? Let’s take a brief look at what time recording can still do – and it’s so much more than just calculating the bill.
Traditional time recording – still a going concern?
Yes. There is a whole host of legal transactions and services where a time metered approach is the most sensible option. Transactional areas where the goalposts can be moved by clients for sensible business and personal reasons are the main ones. And that doesn’t mean time recording is a safety net to ensure the lawyer doesn’t end up out of pocket – it works both ways and the client should be made aware of this from the outset.
Strategic Business Planning
Even in a fixed fee regime, how do you set the fees and how do you ensure that the fixed fee itself will yield a reasonable profit for your business? Time recording the case file activities will go a long way towards achieving this and, when allied to your other fixed and variable costs will assist in answering the question and determining whether your current levels of fixed fees are worth the effort. It’s a good way to establish if your fee earners know the difference between the expense rate and the charge out rate. Without it, how are you to evaluate whether the work is worth doing. Base your charge out rates on the empirical evidence of time recording rather than on the “market rate” or what the competition are doing. The competition may have miscalculated and may be heading towards insolvency – let them do that but base your own fixed fees on the solid foundation of understanding your costs through time recording.
Are you getting the most out of your fee earners?
You have practice management software and it can be used to record time – if it can’t, change your PMS supplier! So, why not use it as a good business management tool or, in this case, as a people management tool? Whether you are working under a fixed fee regime or a time-billed one, your time recording system will enable you to evaluate the performance of your fee earners, establish which ones are doing the work most effectively and point to those that are not making the best use of their time. It all provides evidence for improving management, work processing and, ultimately, the bottom line.
Turn on the clock before your profits start melting away just like Dali’s images!