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?

Smart Time Apps Announces Case Study Featuring Meyers Nave

Campbell, CA – October 6, 2014 – Smart Time Apps, the provider of Smart Time, today announced the availability of its latest case study, which centers on California-based firm Meyers Nave and its experience implementing Smart Time.

Click here to download the case study.

Smart Time is an all-in-one timekeeping platform for law, accounting and professional services firms. The Smart Time timekeeping platform includes time entry, time capture and mobile modules. Any one of the modules can be installed independently or together to create a complete timekeeping platform. Smart Time enables firms to effectively collect, track and recoup billable time, thereby increasing revenue and profitability.

“Smart Time has a lot of intrinsic features I really like,” said Matt Reynolds, top technologist at Meyers Nave. “We recently completed the implementation, and we already can see a positive effect on the bottom line. Attorneys are spending less time building their time chit, and more time practicing law.”

“This is the second firm Matt has introduced to Smart Time, and we’re pleased to have another example of the ways in which Smart Time benefits firms almost immediately,” said Smart Time Apps co-founder and Chief Executive Officer, Todd Gerstein. “This case study again demonstrates Smart Time’s ability to achieve greater revenue, less pain and total mobility for its users.”

About Smart Time Apps

Smart Time Apps creates software solutions that maximize profits for law, accounting and professional services firms. Our flagship product, Smart Time, is an all-in-one time management platform. Our team of experts specializes in finance, accounting, marketing, process engineering and technology. We utilize best-of-breed technologies, as well as the most advanced tools and production processes. We have built a dedicated team, who offer solutions that are unique in the industry. Smart Time Apps is privately held and is headquartered in Campbell, California. http://www.smartwebparts.com.

Do Associates Intentionally Underreport Chargeable Time?

Smart Time Solves a Mystery, Revealing Hidden Timekeeping Behaviors and Motives

What would you say if I told you that some timekeepers intentionally underreport their time? I’d never thought about it as a possibility, since in most law firms putting up big hours is a badge of honor. Why would anybody underreport their time?

Who Knew?

When a law firm uses Smart Time, our timekeeping system, beyond its original intent, you can bet it gets our attention. If you see something once, it’s merely interesting, but see something twice? That’s when I ask, “What’s going on here?”

We’ve studied and helped firms build time entry due date compliance policies. But the issue of underreporting or “eating” time had never crossed our radar.

However, recently, two of our clients told us how they used Smart Time: to find out if associates intentionally underreport chargeable time and why.

In my writings, I’ve talked extensively about timekeepers who underreport or leak time because they had trouble remembering, at the moment they prepare their timesheets, what they did. But intentional underreporting? That’s another beast.

A Little Detective Work

What happened is that the firms ran time captures for a month for each timekeeper. The time captures reported what the timekeeper did, when they did it and how long it took. They then compared the time captures to the actual hours booked, looking for patterns of missing time.

The first finding both firms reported to us is that younger and less experienced associates tend to underreport more time than experienced associates.

When the firm’s management spoke to the offending associates, they first confirmed the behavior and then asked, “Why?” This is what they learned:

  • Associates underreported time in order to make superiors think they were more competent than other associates in the same class – which they hoped would lead to better assignments.

  • Associates underreported time to take pride in meeting the time allotted by their superior to complete the assigned task.

  • Some associates reported that the billing partner on the matter told them to do it.

I’ll leave it to you to play industrial psychologist to figure out what this all means. I think it has a lot to do with associates gaming competence and partners bullying young associates. But, whatever it means, it’s not a healthy process.

Let Nothing Escape

Let me make this clear. Everybody should record everything they did without judgment. Let the billing partner, at prebill time, decide what gets billed and what gets written off. Complete and accurate timesheets should be at the foundation of your timekeeping policy.

Time Capture Software: What’s In It For Me? Selling and Deploying it to Your Attorneys

.
Todd Gerstein
CEO & Founder
Smart WebParts

So you have a new time capture system, and you’re excited about all the benefits it offers to the firm. You’ve been talking it up, mentioning business efficiency, productivity, increased revenue and the like.

Snore, say your timekeepers. And even worse than their uninspired reaction is their reluctance to learn how to use it. What’s gone wrong in this scenario? And what can you do to gain (the absolutely essential) buy-in from your staff?

The simple answer is this: You must lead your “pitch” with WIIFM (What’s in it for me?), from the perspective of your timekeepers.

Feel Their Pain

Attorneys are busy people, and the only thing more painful than keeping their time is spending time learning something that has no perceived benefit. However, if you can begin by convincing your timekeepers that the time spent learning a new system will drastically cut hours of pain out of their daily lives, you can bet enthusiasm will shoot way up.

They need to know that time capture will:

  • Save time preparing timesheets
  • Find time that would have otherwise been forgotten
  • Minimize general timekeeping angst

With this information—the answers to WIIFM—reluctance disappears.

No Substitute for Experience

Once your timekeepers are sold on the idea of adopting time capture, the next question becomes how to begin.

Talk is cheap and usually unconvincing, so the surest route to real adoption is allowing your timekeepers to experience the benefits of time capture at literally no cost to them—no training, no learning curve, no effort, no disruption.

With a time capture system, you can begin by sending out daily journal reports via email. This way the information captured is simply made available—additive, not disruptive—and a user can use it or ignore it. Making use of the information becomes completely voluntary.

Management’s Role Still Important

Of course, management still has a responsibility to roll out a new system smoothly and efficiently, or risk losing attention and enthusiasm to problems unrelated to the product itself.

We recommend that to manage the deployment well, it should be broken down into small pieces. This way, you can achieve “early wins” to build project momentum.

Besides the project team, you will want to recruit early adopters and “change zealots” to help you with the deployment. Early adopters are users who embrace new technology before most other people do. Work with this group to vet that the time capture report is accurate.

Once you’ve got the time capture engine working, expand the pilot group to include change zealots who can be trusted to spread the news of time capture’s benefits. Keep in mind that some of these individuals don’t need to be tech savvy and may even be your most problematic timekeepers.

Once everything is locked down and working for your pilot groups, it’s time to expand the deployment to all your users. Start with automated reporting at first. Keep the lines of communication with your users open. Inform them about time capture and how you think it will benefit them. Allow them the freedom to opt-out from the reports, and be sure to answer any questions they bring up.

Once everybody is getting reports, offer voluntary lunch and learn sessions to demonstrate the online features of the system. Typically when such a plan is followed, we see a system adoption rate of somewhere around 75-80% within 4-6 weeks.

Enabling Change

Ultimately, change can happen in one of two ways. You can try to command it, forcing staff to see things your way, discussing benefits and adoption from a position of authority.

Or, you can let it emerge naturally, with timekeepers answering the WIIFM question on their own, interacting with the system voluntarily, and adopting it from a position of self-improvement and empowerment.

The choice is up to you. From our experience, however, it’s pretty obvious which one achieves real change and lasting success.

Timekeeping Strategy Brief: Excuses, Excuses …

toddgerstein.
Todd Gerstein
CEO & Founder
Smart WebParts

Before I lay out my five-point plan to fix compliance, let’s look at the most common excuses. Not surprisingly, timekeeping excuses cut right to the pain and angst of the problem.

Excuses, Excuses…

For attorneys, timekeeping is hard because:

  • Keeping time is unnatural. Who thinks of their day in six-minute increments? No one, that’s who. It can seem like pure absurdity to have to track and enter every task one does in a workday.
  • I want to practice law. Attorneys want to practice law, not justify their day to the client and/or the firm, even though they know their law firm is a business.
  • It breaks my rhythm. The process requires a kind of meta-attention that few people possess. It requires the awareness to know that you need to stop your primary task so that you can do the secondary timekeeping task. It interrupts the natural flow of work and creates a distraction that is hard to recover from. .

Attorneys aren’t just making up excuses. There are legitimate reasons why it is hard to keep time. It’s not that these reasons don’t exist; it’s that they can’t matter.

Once you’ve given them the equivalent of a hug and a “there, there,” it’s time to remind them: Yes, your excuses are legitimate, but you are an attorney and this is a business and so…they can’t matter. Nothing can get in the way of timely, accurate timekeeping.

The Plan: Make Timekeeping Non-Negotiable

But how, you ask?

We know, from our research and discussions with firms, that the firms with the greatest success in timekeeping create a culture of compliance. They do so by keeping expectations about timekeeping non-negotiable, consistent and clear. They also include incentives and/or penalties for enforcement.

What steps can you take to emulate the firms with successful timekeeping cultures?

  1. Policy. You must have a firmwide policy that outlines the rules everyone must follow for time entry processes. Daily by 10 a.m. or every Monday for the preceding week, for example.
  2. Provide the best tools and technology. Make sure you have an up-to-date timekeeping system that includes time capture, time entry and mobility wrapped up into one software package.
  3. Partners. Partners can’t play by different rules. Even if they have secretaries who help out with time entries, they must lead on this issue.
  4. Problem attorneys. Don’t ignore the attorneys who feel that they can get away with flouting the policy. Have the partners take swift action to deal with these folks, so that everyone is aware that non-compliance won’t be tolerated.
  5. Penalties. The punishment we’ve uncovered that works best for firms seems to be penalties that affect an attorney’s year-end review. Include timekeeping skills in the attorney’s assessment.

An End to the Excuses…

Timesheet compliance can sometimes seem like a battle not worth fighting, especially when your best attorneys offer up such convincing reasons why it is difficult for them to keep time. But fixing your compliance issues is imperative, and, as you’ve seen, actually fairly straightforward. All it takes is a commitment from firm leadership to make the culture of compliance a reality.

And, if enthusiasm for establishing the culture wanes, remember: When attorneys make excuses about timekeeping, firms lose money. It’s that simple. While it’s not easy to get attorneys to comply, it is also very simple: Do it. No excuses. (You might also remind them that timekeeping is part and parcel of being an attorney!)

Support compliance using the plan outlined above, and you’ll have happier attorneys, less revenue leakage, and maybe best of all, an end to the excuses.

Strategy Brief: Do You Charge for Thinking?

toddgerstein.
Todd Gerstein
CEO & Founder
Smart WebParts

Go back to your office and think. That’s what my first boss told me when I started at Milbank Tweed in 1978. I was the firm’s first Director of Finance, it was law firm management in the Stone Age and there was very little, if any, precedent to follow. So, thinking was important.

His simple directive stuck with me throughout my career. Go to your office and think. Be creative. Look at the problem from different angles. Bat the issue around. After all, isn’t this why we spend so many years in school, in professional development, in retreats and conferences? To develop our minds? To solve problems? In other words, to learn how to think.

Billing for Thinking

But, what about attorneys? Everyone says you go to law school to learn how to think. But in the course of our research at Smart WebParts, we have run scans on millions of time entries to study timekeeping behavior, and it is amazingly rare to see a time entry that says something like, “think about the client’s problem.” Instead, today it’s all about action verbs: Prepare. Analyze. Research. But never: Think.

There’s no phase task code for thinking, but why not? Why shouldn’t “thinking” be given its own space in the billing universe, which would allow for honest reporting of time spent thinking? Why have we gotten to a place where attorneys are afraid to report time thinking and clients might see “thinking” as a red flag?

To dig deeper and uncover the causes for this, I posted a question on a few LinkedIn professional groups asking: “Do you charge clients for thinking time?” and I got some interesting responses.

One attorney had this to say:

“Not all my time spent on behalf of clients is “doing.” Some of it is “just thinking” — while sitting at a computer keyboard, pacing the hallways, or simply staring off into space. I don’t charge for travel time, but a lot of my travel time is also “thinking time.” (If I’m asleep on a plane or in a hotel room, my meter is not running.) Daydreaming afterwards about brilliant arguments that I ought to have made doesn’t count. But when I’m making sustained efforts to plan, compose, and rehearse brilliant arguments in preparation for actually making them on a client’s behalf, and when I am confident that my client has gotten good value for the time I’ve invested in this sort of “just thinking,” I will indeed bill for it. You ought not want a lawyer who’s incapable of — or resistant to, or even just under-acquainted with — reflective thought and planning. While thinking on one’s feet in a crisis is indeed a necessary skill for courtroom lawyers, it’s by no means a sufficient one. No plan survives first contact with the enemy; and thus, as Gen. Dwight Eisenhower explained, “Plans are useless, but planning is invaluable.”

And here’s another’s take:

“I’m a little reluctant to charge a client thinking time unless I’m solving an extremely unique problem for them. If I’m “thinking” because it’s new ground, then I might charge some of that time. Most of the time I just chalk it up to professional growth, especially if the solution I come up with may prove useful for other projects in the future.”

In response to that comment came this one:

“I disagree. I call this analysis and I consider that thinking about the issues my client’s problem raises and how to resolve them, including reviewing the facts and how the existing caselaw and other precedents, including my own experience, might predict a particular outcome, to be an essential “value added” element of my representation. To me, drafting or negotiating without first analyzing the situation and planning strategies on how to handle the challenges, both foreseen and unforeseeable, in my client’s situation is like heading to a new place without a roadmap — I can’t get “there” (successful resolution of my client’s issue) unless I know my preferred and alternate routes.”

Conclusion

Whether admitted on a bill, attorneys do think when they’re on the clock. What an attorney wants to do with that time, bill-wise, is an individual choice. Some will want to be forthright and explain time spent thinking, while others would rather explain thinking time using alternate terms.

In any case, thinking, whatever it’s called, is time well spent. On that, clients and attorneys can agree. No one wants a thoughtless attorney. Now if only we could agree on how to bill for it.

Strategy Brief: No More Excuses: Making Timekeeping Compliance Non-Negotiable

toddgerstein.
Todd Gerstein
CEO & Founder
Smart WebParts

Before I lay out my five-point plan to fix compliance, let’s look at the most common excuses. Not surprisingly, timekeeping excuses cut right to the pain and angst of the problem.

Excuses, Excuses…

For attorneys, timekeeping is hard because:

  • Keeping time is unnatural. Who thinks of their day in six-minute increments? No one, that’s who. It can seem like pure absurdity to have to track and enter every task one does in a workday.
  • I want to practice law. Attorneys want to practice law, not justify their day to the client and/or the firm, even though they know their law firm is a business.
  • It breaks my rhythm. The process requires a kind of meta-attention that few people possess. It requires the awareness to know that you need to stop your primary task so that you can do the secondary timekeeping task. It interrupts the natural flow of work and creates a distraction that is hard to recover from. .

Attorneys aren’t just making up excuses. There are legitimate reasons why it is hard to keep time. It’s not that these reasons don’t exist; it’s that they can’t matter.

Once you’ve given them the equivalent of a hug and a “there, there,” it’s time to remind them: Yes, your excuses are legitimate, but you are an attorney and this is a business and so…they can’t matter. Nothing can get in the way of timely, accurate timekeeping.

The Plan: Make Timekeeping Non-Negotiable

But how, you ask?

We know, from our research and discussions with firms, that the firms with the greatest success in timekeeping create a culture of compliance. They do so by keeping expectations about timekeeping non-negotiable, consistent and clear. They also include incentives and/or penalties for enforcement.

What steps can you take to emulate the firms with successful timekeeping cultures?

  1. Policy. You must have a firmwide policy that outlines the rules everyone must follow for time entry processes. Daily by 10 a.m. or every Monday for the preceding week, for example.
  2. Provide the best tools and technology. Make sure you have an up-to-date timekeeping system that includes time capture, time entry and mobility wrapped up into one software package.
  3. Partners. Partners can’t play by different rules. Even if they have secretaries who help out with time entries, they must lead on this issue.
  4. Problem attorneys. Don’t ignore the attorneys who feel that they can get away with flouting the policy. Have the partners take swift action to deal with these folks, so that everyone is aware that non-compliance won’t be tolerated.
  5. Penalties. The punishment we’ve uncovered that works best for firms seems to be penalties that affect an attorney’s year-end review. Include timekeeping skills in the attorney’s assessment.

An End to the Excuses…

Timesheet compliance can sometimes seem like a battle not worth fighting, especially when your best attorneys offer up such convincing reasons why it is difficult for them to keep time. But fixing your compliance issues is imperative, and, as you’ve seen, actually fairly straightforward. All it takes is a commitment from firm leadership to make the culture of compliance a reality.

And, if enthusiasm for establishing the culture wanes, remember: When attorneys make excuses about timekeeping, firms lose money. It’s that simple. While it’s not easy to get attorneys to comply, it is also very simple: Do it. No excuses. (You might also remind them that timekeeping is part and parcel of being an attorney!)

Support compliance using the plan outlined above, and you’ll have happier attorneys, less revenue leakage, and maybe best of all, an end to the excuses.