Coach’s Corner: Of priorities and consequences in the practice of law

By Ed Poll, Special to Lawyers Weekly

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I recently spoke with an executive whose company makes software to help lawyers record billable time.

He discussed failure to record time as a “time leak,” because time is lost (and therefore not billed) when an attorney fails to make contemporaneous notations of work being done.

Surveys done by the company suggest that at least one in five timekeepers consistently fails to record time contemporaneously, and almost 80 percent record their time days or even weeks later.

This is simply professional (business) negligence.

Attorneys may try to defend this by saying they are too busy doing work for the client, or they weren’t in the office to input time into the firm’s system, or they always catch up on weekends, and so on.

Such explanations for not making contemporaneous (or nearly so) time entries are reasons, but not good excuses.

The real impact of these lapses is simple – they cost lawyers money, thousands of dollars a year in revenue that is never billed. Forget about the issue of realization rate and collection. Your client will never pay, and you will never realize, what you don’t bill.

Lawyers who claim they have too little time generally allow themselves to be distracted by too many other tasks. The root cause of such procrastination is typically a failure to prioritize.

Because most law firms still bill by time increments, lawyers should not put off or ignore the important time-management task of completing daily time records. These records should be prepared as the work is done.

Daily time record reviews give any lawyer a chance to monitor progress in achieving billable-hour goals. A weekly review of time records at the end of each week will reinforce the likelihood of reaching those goals or will provide the basis for analyzing a failure to meet them.

And, if you have followed my earlier advice about budgeting for the client matter, this review will enable you to know whether you are on target for the client … or if you are reducing the budgeted legal expenses and can brag a bit to the client about this.

The ultimate benefit to the law firm of having detailed all the tasks that make up a matter is that it provides the means to analyze the firm’s entire cost structure. This is vital for any number of reasons, from providing a roadmap for creating budgets and reducing expenses, to making it easier to address client requests for alternative-billing arrangements.

A firm cannot aspire to set accurate budgets and fees unless it understands operational processes and how each attorney determines firm profitability by his or her activities as revealed in daily time records.

Many lawyers, unfortunately, seem to lack an understanding of this integration concept, and fail to look beyond the immediate impact of their own billings. The broader implications of how fees, collections and compensation interact tend to diminish and be depreciated.

Yet nothing is more important to the firm than removing time records from the individual context alone, and focusing it on the firm’s financial life. Failure to achieve priorities in this sense has direct and negative consequences for all partners – and makes the individual lawyer appear indifferent or unreliable to colleagues.

When significant rainmakers are guilty of this, the firm often ignores it. However important the rainmaker may be, he/she is less so than would otherwise be the case if accurate records were produced by this rainmaker. And there is a cost to the firm.

The battle, if any were to occur, would find its way into compensation committee discussions. Failure to achieve time record submission priorities demonstrates personal irresponsibility and its consequences are there for all to see.

Editor’s note: Poll is the principal of LawBiz Management, a national law firm practice-management consultancy based in Venice, Calif. For more information, visit www.lawbiz.com.