How to Bill Time Accurately in a Law Firm

Time billing in a law firm meticulously tracks and charges clients based on the actual time legal professionals spend on their cases, logging every minute or increment of work performed, from drafting documents to client consultations. This practice provides transparency for clients, allowing them to understand the costs associated with their legal services.

For law firms, time billing is fundamental for revenue generation and efficient project management. It helps ensure accountability for the work delivered and contributes to the firm’s overall financial health. This method allows firms to assess profitability per case and manage workloads effectively across their legal teams.

Fundamental Principles of Time Billing

Accurate recording of time is essential in legal billing. Every minute dedicated to a client’s matter should be reflected precisely in time entries. This precision ensures fairness to the client and maintains the firm’s financial integrity.

Contemporaneous recording is another guiding principle, requiring that time be logged as the work is performed or immediately thereafter. Delaying time entry can lead to inaccuracies or omissions, as recollections of activities may fade over time. Prompt recording ensures that all billable work is captured.

Time entries require specificity and detail, providing clear descriptions of work performed. Avoid vague language like “client conference.” Instead, use detailed narratives such as “conference with client regarding settlement terms for breach of contract claim.”

Block billing, which combines multiple distinct tasks into a single entry without individual breakdowns, is discouraged. This practice can obscure the actual time spent on each activity. Itemizing each task separately maintains transparency.

Legal services are commonly billed in specific time increments, typically 6-minute units (0.1 of an hour). Other increments include 10 minutes (1/6th of an hour) or 15 minutes (0.25 of an hour). If a task takes less time than the chosen increment, the time is rounded up to the nearest full increment.

Attorneys have ethical duties of competence and diligence that extend to billing practices. These obligations emphasize transparent, honest, and fair billing to maintain client trust and the firm’s reputation. Firms must ensure billing practices comply with professional conduct rules, such as Model Rule of Professional Conduct 1.5.

Key Information for Time Entries

Each time entry must include specific identifying information to ensure proper allocation and clear communication.

Client Identification

This requires the full name or a unique identification number for the client being served. This ensures that the time is correctly attributed to the responsible party.

Matter Identification

Specify the particular case or project to which the work pertains. This could be a specific case name, a project code, or a unique internal matter ID. Linking entries to a specific matter helps track progress and costs for individual legal undertakings.

Date of Service

Record the exact calendar date on which the legal work was performed. This timestamp helps establish a clear chronology of activities and ensures that billing periods are accurately reflected.

Time Spent

Record the time spent on an activity in the firm’s specified increments, such as 0.1 hours (6 minutes) or 0.25 hours (15 minutes). This numerical representation of duration directly impacts the calculated billable amount.

Detailed Activity Description

Provide a comprehensive narrative of the work accomplished. This description should clearly link the activity to the client and matter, using action verbs and specific details. Examples include “Drafting initial complaint for breach of contract” or “Legal research on tort liability for product defect.”

UTBMS Codes

Uniform Task-Based Management System (UTBMS) codes may be required for certain clients, particularly corporate legal departments. These standardized codes categorize legal tasks, activities, and expenses, such as L100 for “Case Assessment, Development and Administration.” UTBMS codes allow for greater transparency and detailed analysis of legal spending.

Professional’s Name

Include the name or unique identification number of the professional performing the work. This ensures accountability and allows for tracking individual contributions to client matters. It also facilitates internal performance reviews.

Methods for Recording Time

Law firms employ various methods for physically recording time entries, ranging from traditional paper-based systems to advanced software solutions. One common approach involves manual timesheets, where legal professionals fill out paper forms. These forms typically have columns for the client, matter, date, time spent, and a detailed description of the activity.

Another method utilizes spreadsheet-based tracking, such as Microsoft Excel. Professionals input time data into digital spreadsheets, with each column corresponding to key information like client name, matter number, date, duration, and activity description. While more flexible than paper, this method still requires manual entry and can be prone to human error.

Dedicated legal billing software and timekeeping systems offer a more streamlined and accurate approach. Programs like Clio, MyCase, PracticePanther, and Thomson Reuters Elite are designed specifically for law firms. These specialized platforms provide features for entering and managing time, often including built-in timers that can automatically track activity.

Such software often allows for time entries to be linked directly to specific cases and clients, reducing administrative burdens. Many systems also offer mobile applications, enabling legal professionals to record time from anywhere, whether in court, during client consultations, or while traveling. This accessibility helps capture all billable minutes that might otherwise be missed.

Some advanced systems even offer automated time tracking features that passively record activities in the background, such as time spent in Word, Outlook, or legal research tools. This automatic capture helps ensure that every billable second is accounted for, improving accuracy and profitability. These systems can also integrate with other practice management tools and accounting software, further streamlining the billing process.

Review and Submission Process

Once time entries are recorded, they undergo an internal review process to ensure accuracy and compliance with firm policies. Supervising attorneys or team leads review entries for completeness, clarity, and adherence to billing guidelines. This review helps catch discrepancies or insufficient descriptions before an invoice is generated.

During this review, corrections and editing may be necessary. If an entry is vague, lacks detail, or contains an error, the reviewing attorney requests revisions. This process ensures all time entries accurately reflect the work performed and meet the firm’s standards for client billing.

Following review, time entries proceed to an approval process. This step signifies that entries are finalized and ready for billing. Approval might come from a practice group leader, a billing partner, or a dedicated billing committee.

Approved time entries are then submitted to the firm’s accounting or billing department. This transfer can occur electronically through integrated software systems or via batch submissions. The billing department relies on these approved entries to prepare client invoices.

The billing department compiles all approved time entries with any associated expenses, such as court filing fees or document reproduction costs. They then generate comprehensive client invoices, often adhering to specific client billing guidelines or electronic billing formats like LEDES. The final invoice presents a clear, itemized statement of services rendered and total charges due.