We admit it: the topic of time entry isn’t necessarily sexy, especially to attorneys. It’s not just attorneys that shake their proverbial fist at time entry. Many law firms continue antiquated and inefficient time entry practices, which means that firm administrators, legal assistants and other staff are burdened with some aspect of time entry, from completion to accuracy.
“Time is money,” as the old adage goes, but it is many other things too. Your time is efficiency and compliance. Your time is morale. Your time is your credibility and competitive advantage. Your time is important to consider as you manage and grow your firm.
In this post, we’ll explore the reasons that time entry is so important to both the firm as a whole as well as other individuals within the organization.
#1: Revenue and Growth
Let’s address the most obvious point first: the better your time entry practices, the more accurate your invoices. This helps to prevent money from being left on the table and establishes baselines that will set the stage for solid monthly, quarterly and annual revenue projections. Furthermore, delays in time entry lead to delays in payment, which is not good for cash flow. A firm’s only source of income is through time entry. If attorneys do not enter their time for working on cases, they are bringing no revenue into the firm.
#2: Competitive Advantage
Today’s market is tough. There are thousands of firms competing for business. Big data is fueling corporate decision making, particularly regarding decisions that relate to budget and expenditures. Accurate time entry helps to establish norms for the cost of a given legal service. Adhering to or exceeding these expectations creates an edge on competitors to win and keep clients.
#3: Happy Clients
A happy client often translates to a loyal client, which, in turn means revenue and growth for the firm. Implementing sound time entry practices, like contemporaneous time entry, helps firms increase billing accuracy. Billing accuracy helps firms earn and maintain the confidence and trust of their clients.
#4: Job Security
For attorneys, it’s all about the billable hours. Attorneys are critiqued on the total billable hours they generate per month and per year. If an attorney’s goal is not met, his or her job could be at risk. Therefore, it is important to make sure that time entry is as accurate as possible in order to ensure that all time is recorded and, at the same time, honors the firm’s time entry policies..
When billing does not comply with a client’s billing requirements, the firm runs the risk that the client will dispute an invoice (costing time) or write-off non-compliant expenditures (costing money). Research shows that about 44% of invoices get rejected or reduced due to inaccuracies and lack of compliance. Billing accuracy depends heavily on timekeeping accuracy. Entering time accurately sets the stage for a seamless billing and payment process and that translates to happy, loyal client relationships.
#6: Faster Payment Cycles
Recent research demonstrates that billing inaccuracies can cause up to a 25% delay in collection time. However, when attorneys enter their time accurately and in a timely fashion, compliance is increased and recievables are improved. Unfortunately, this is something that can easily be overlooked by attorneys, as they are not directly involved in the billing processes after time entries are posted. It should be part of the firm’s policy to make attorneys aware of how time entry behavior can significantly impact the bottom line of the law firm.
Last but not least: how is the morale at your firm? Have you considered how morale is affected by time entry? While this might seem like a bit of a stretch at first, consider it. Are there groans, eye rolls and heavy sighs when the “reminder to submit time” email is sent? Is tension elevated when time entries are not submitted? Is arm twisting necessary to meet such time entry deadlines? Are staff members, such as legal secretaries and billing associates, burdened with getting time submitted against several competing priorities? If the answer to any of these questions is yes, your firm’s time entry practices could be affecting the morale at your firm. A decrease in morale can lead to employee churn, lower levels of productivity and a weakened employer brand. Therefore it is an important consideration. Improving efficiency in the time entry process will help protect the morale of the firm.
Is time entry a top priority at your firm? Why or why not? Share your comments below.