6 Reasons Reconstructive Time Entry Is Damaging Your Law Firm

Posted by Gaby Isturiz on May 18, 2015 9:14:10 AM


854904_sFor many attorneys, time entry is a sore subject. However, it isn’t time entry that is the problem, but rather the way in which time entry is carried out. Time consuming and tedious, reconstructive time entry is likely to be procrastinated by attorneys who would much rather practice law than spend hours combing through call logs and schedules to determine how their time was spent. This estimation (and let’s face it, in many instances “guess work”) leads to several inaccuracies which have an adverse effect on the firm’s projections and bottom line. Even those attorneys who consider themselves in control of time entry processes face several inaccuracies bred from inherent inefficiencies. Suffice to say that even the best reconstructive timekeepers can’t match the accuracy and efficiency of contemporaneous timekeepers.

From our experience working with thousands of firms around the world, we have learned that reconstructive time entry is not only a persistent practice in almost every law firm, but a reality that most firms have acknowledged and are willing to live with. More than half of law firms have admitted that between 60% and 80% of the time entry happens by month-end, before closing the month in the books.

In this post, we’ll expose the reasons why reconstructive time entry can work against your firm’s goals of profitability, compliance and accuracy.

#1: In this era of mobility, reconstructive time entry and time capture becomes increasingly less possible.

Time capture (reconstructive time entry packaged as automation) and traditional reconstructive time entry operates under the assumption that attorneys are completing their work on their computer, which is less and less the case each day, as mobility continues to serve attorneys, supporting the way they want to work.

#2: Reconstructive time entry encourages bad habits.

Why encourage bad habits? Reconstructive time entry lends easily to procrastination and “guesstimation.” Positive habits in regard to time entry correlate with accuracy, which has a material impact on the firm’s bottom line.

#3: Reconstructive time entry yields inaccurate time entry data.

Reconstructive time entry provides inaccurate information, adding another layer of anxiety to attorneys, billers and other administrative staff members. How accurate can time entries be when accuracy depends on attorneys being chained to their desks, and we all know that they are not. Due to the complexity and lack of consistency in reliable benefits, it is nearly impossible to reconstruct time entry processes to yield accurate bills. In the world of Electronic Billing, it is even more imperative than ever before that time recorded is not only accurate but in compliance with client billing guidelines.

#4: Reconstructive time entry leads to delayed billing cycles.

Cash flow is critical to the health of any law firm. Many attorneys perform reconstructive time entry once per month and it is not unusual to fall behind on completing time entry tasks as other priorities take precedence, thus creating the first delay in the billing process. Knowing that reconstructive time entry often yields inaccurate time data (with no context with regard to status of billing caps or guidelines), bills are often rejected. This creates yet another delay in the billing process which leads to further postponement of accounts receivables.

#5: Reconstructive time entry yields to time leakage and revenue loss.

Will you remember what you did 3 days ago, 7 days ago? Most certainly not. When attorneys reconstruct time at the end of the week or the month, most likely they are forgetting to record all the work they have done and they should bill for. Smaller tasks are the most likely to leak when they are not recorded contemporaneously. These entries that go unrecorded or leaked can represent over 1 million dollars a year for a firm of 70 attorneys.

#6: Reconstructive time entry puts the firm at risk.

Much like any other professional, attorneys budget how many hours they will commit to work  in a given year. For attorneys, that number can range between 1300 to 2100 billable hours per year, depending on the attorney. Attorneys are under constant pressure to achieve their billing goals, but their time entry practices don’t support them. Reconstructive time entry often leads to misbilling (overbilling or underbilling). In the case of overbilling or padded billing, it poses a great risk for the firm. This article by Justia.com explains the issue very well.

As you can see, reconstructive time entry creates a vicious and never ending cycle and leaves attorneys, staff and administrators frustrated every month and creates a material impact on the firm’s bottom line. Learn more about how today’s savvy law firms are integrating mobile time entry to stop time leakage and increase billing accuracy in our case study on Hawkins Parnell Thackston & Young here.

How has reconstructive time entry impacted your firm? Share your experience in the comments section below.

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Topics: Time Entry/Time Keeping