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The Problem with Reconstructive Time Entry

Posted by Gaby Isturiz on January 29, 2014 at 9:00 AM

Reconstructive Time EntryIn the legal world, everyone keeps time. But, how accurate are those time logs?

Has your firm ever measured the time elapsed between the time that the work was completed and when the time recorded? For most firms, the average is about 5 to 7 days.

Why does this matter? Well, because the longer it takes to record an activity the less you will remember. It will all even out eventually, right? Probably not.

Even a small leakage in timekeeping can cost your firm hundreds of thousands of dollars in revenue per year. On average, these small omissions in billable hours cost your firm between $20,000-40,000 annually, per individual. This amounts to between $2-4 million for a 100-attorney law firm. 

Today’s law firms cannot afford to let hard-earned billable hours slip through the cracks. That’s why timekeeping accuracy is crucial.

Why You Are Leaking Revenue

Let’s start by understanding what constitutes accuracy in timekeeping. As a practical example, can you remember exactly what you worked on 5 days ago? This is especially difficult, considering that you are working on multiple cases at the same time. In order to remind yourself how your time was spent, you can go back to your logs and start pulling from your calendar, your notes, email etc, to forensically identify what you worked on. However, when you reconstruct your time in this way, how do you ensure that the time that you are assigning to each task is completely accurate? After all, it is based on estimates and your best recollections of the amount of time spent on each task. While the time that you assign to each task might be close to the actual time spent, even small discrepancies can cost your firm thousands of dollars each year.

Accuracy can be measured by the time between work done and recorded. The closer this number is to zero, the more accurate it is. This is what we call “Time Velocity.” When “Time Velocity” gets larger than 1 day, accuracy is severely compromised, which almost always means that you lose billable time.. Unfortunately, this is the most widely-practiced method of time entry in today’s law firms. Reconstructive time entry happens when timekeepers enter their time in increments, sometimes weekly, but often monthly. At this point in the time, the attorney will sit down and attempt to piece together (or reconstruct) their time by examining past records, such as email and call logs. This activity is extremely tedious and highly unscientific. Reconstructive time entry is one of the primary reasons that most attorneys shudder when they hear the words “time entry.”

The problem with reconstructive time entry is that it is time and resource intensive. Over time, the “reality” and “estimation” of time widens and accumulates, meaning that your firm’s accuracy suffers.

Accuracy is intrinsically related to the “time velocity”. The shorter your velocity is the more accurate your time records are. The opposite is also true.

Fred Esposito, in a recent article, states that lawyers who reconstruct their time weekly tend to lose 25 to 30 percent of their time, and those who enter time on a monthly basis can lose as much as 55 to 70 percent.

It’s time to get contemporaneous.

“Wise lawyers know that contemporaneous timekeeping is essential to the success of any fee arrangement and to the overall financial success of your law firm”. Fred Esposito, CFO for the law firm Meyer, Suozzi, English & Klein, PC.

The fundamental difference between contemporaneous and reconstructive time entry is “do it now” versus “leave it for later.” While your firm may not be able to record time contemporaneously 100% of the time, the more it does, the more accurate your time will become. Usually, the more that contemporaneous timekeeping takes place, the more billable hours your capture.

It takes some time to practice and dedication to turn contemporaneous time entry into a habit and part of the culture at your firm. There is a huge payoff for those who can commit.

On a basic level, we all understand that accuracy is crucial and that we’re more likely to record our time accurately if we do so as we complete each task. Putting it into practice is another thing. It’s up to you and your firm to make it happen. Can you commit to contemporaneous time entry?

Share your experience with us in the comments section below. What steps have you taken to improve timekeeping accuracy at your firm?

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Topics: Contemporaneous Time Entry, Time Entry/Time Keeping

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