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The Nuances of Time Sheet Rounding

So…rounding. Everyone does it, but it’s the how and why they do it that matters. Of course not every activity falls into perfect tenths of an hour, so what are the most common timesheet rounding behaviors? Let’s take a closer look.

Block Billing vs. Line-Item Billing

Block billing groups several tasks under one billing entry. So, instead of each task getting its own entry, multiple tasks get grouped into one time entry. Because the actual time spent on each task is hidden, clients often view this as a way to pad the bill, or to conceal inefficient work. Generally speaking, block billing has become less and less acceptable in most firms, as it leads to clients challenging fees—disputes clients often win.

Transparency is important to clients, so we now see more and more clients demanding line-item billing, which they believe reveals what work was actually done and how long it took. They perceive line-item billing to be clearer and more accurate.

However, lawyers can also distort line-item billing. Some might always round up for each individual task, ultimately padding the bill in this way. Of course, some lawyers might try to balance out the rounding by sometimes rounding up and sometimes rounding down, but, when push comes to shove, the temptation to round up each task is very common.

A Question of Trust

Not that it’s quite so straightforward. Because of course, in what scenarios is the rounding up occurring? By each task, or by the total number of hours in a day? Do you round up a 3 minute email to 6 minutes, a 15 minute phone call to 18 minutes, etc., or do you round up a 5 hour and 10 minute block of work?

The difference might seem inconsequential, but multiply all the tasks done over the course of a day for multiple clients, and line item rounding can really add up.  As an extreme example, what if an attorney reviews 15 emails in an hour? Round each one up to a tenth of an hour and the attorney has the potential to book 90 minutes versus the actual 60 minutes that it took to complete the task.

What this boils down to is the relationship of trust between your firm and your clients. If your client insists on line-item billing, it’s likely because they think it seems harder for lawyers to pad the bill in one big chunk in block billing.

What clients really want is to be sure that their lawyers are being honest and efficient—not to oversee the work process. What firms really want is to be trusted to act in the client’s interests—whatever it takes to do the best job possible.

So how do you handle rounding issues in your practice, and what kind of billing do you prefer? What issues do you face around billing, rounding, fairness and client satisfaction?