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New Legal Review: Timekeeping Trauma Blights Billable Hour

From New Legal Review

US law firms are risking significant financial leakage from efforts to monitor their billable hours, new survey results have shown. Carried out from mid-May to early June by legal consultancy Adam Smith, Esq, the ‘Law Firm Timekeeper Survey’ has revealed that timesheet-related activities could be costing law firms up to $40,000 per person, per year.

Financial leaks are also springing from unreported time, as retrospective timekeeping habits spawned by daily work pressures conspire to produce inaccurate records. The survey puts the annual, per-lawyer cost of this slippage at up to $30,700 but – where partners are concerned – this rises to $35,000.

The survey attracted 211 respondents – the vast majority of whom were heavy hitters. Among the group were 86 partners, 72 associates and a pool of 51 senior staff members, including directors, executive directors, chief financial officers (CFOs) and chief information officers (CIOs). In terms of the specialist areas covered, 64 respondents worked in litigation and dispute resolution, 53 in corporate/transactional practice and 21 in intellectual property.

Working in partnership with timekeeping experts Smart WebParts, Adam Smith, Esq aimed to understand the levels of accuracy in lawyers’ timesheet habits and examine their views on the processes involved. Announcing their results, the companies noted that a ‘chronic source of mistrust between clients and law firms is scepticism (openly expressed by clients and tacitly acknowledged by lawyers) about the accuracy of timekeeping’.

Lack of precision emerged as a major concern: 47% of the respondents said that their timesheets were ‘accurate over time – it all evens out’. Meanwhile, 18% reported that their timesheets were ‘somewhat accurate – I guess a little’, and 2% admitted their records were ‘not very accurate – I guess a lot’. In the All Partners subset, only 25% put themselves in the ‘100% accurate’ category. More than double (58%) said their records were ‘accurate over time’, while 17% were either ‘somewhat accurate’ or ‘not very accurate’.

The mean figure for leaked or unreported time came to 85 minutes, or 1.4 hours, per week – but some respondents owned up to a weekly loss of five hours plus. Projected annually, this leakage could amount to between 50 and 70 hours per lawyer. This evident detour from strictest accuracy was reflected in the survey’s comments section. One lawyer said that timekeeping was ‘the worst part of law firm life’, while another declared it ‘the bane of my existence’.

The results, said Adam Smith, Esq, ‘were not only fascinating but eye-opening, in terms of the amount of leakage and the sheer overhead involved in tracking time’.