For lawyers, time is money. Most lawyers rely on billable hours for their income, and many firms expect lawyers to meet a minimum billable hour requirement of 1,700 to 2,300 per year.
To meet this requirement – and get paid – attorneys must track their billable hours efficiently and accurately. “Padding” mistakes hurt the lawyer and the firm’s reputation, but missing valuable time in the time-tracking process leaves money on the table.
Many resources are available to help lawyers easily and efficiently calculate and record billable hours, including an attorney billing increase chart and time tracking software for attorneys.
What is a Lawyer Billing Increment Chart?
A billing increment chart is a standardized chart or template that helps you calculate how many hourly increments to bill based on the time you spent working. With a billing increment chart, most lawyers stick to a 1/10e an hour rule, or 6 minute increments.
This means that if a lawyer works 15 minutes at a rate of $100 per hour, the graph will show that the time increment is 0.3. This is multiplied by the hourly rate ($100/hour) for a sum of $30.
Here is an example of a billing increment table:
Why do lawyers charge in increments?
Installment billing is a common practice for practical reasons. Per-minute or minute-by-minute billing is difficult to track and time-consuming, not to mention manually calculated. This can lead to a lot of wasted time in the follow-up process and a lot of errors, which creates doubt among customers.
Similarly, billing in large increments, such as half-hour increments, inflates bills. Lawyers mention a task during this period or combine several unrelated tasks, casting doubt on the time they Actually dedicated to processing cases.
Billing in 6-minute increments is easy to calculate and allows for reasonable increments without too much padding or wasted time.
Do lawyers have to bill in increments?
Law firms can structure their billing as they see fit. The standard increments used by most companies are 1/10 hour (6 min), 1/6 hour (10 min), and 1/4 hour (15 min). It’s a matter of convenience rather than necessity. Lawyers choose the brackets they intend to bill, then round up to the nearest billing bracket of their choice.
Billing increases can present problems for the company and the customer, whoever they are. Smaller increments seem better for the client, but billing in 6 minute increments is inefficient and puts lawyers in a position to “beat the clock”.
Larger increments aren’t much better, as they may seem unsavory to the client. Larger increments suggest – even if they are false – that lawyers charge for more time than they actually spend. This can have a detrimental effect on the firm’s reputation, especially if other firms in the area rely on small increments.
What is Time Tracking Software?
Legal time tracking software is a cloud-based resource for recording, categorizing and recording time spent on billable and non-billable tasks. This software tracks work in real time to reduce errors or missed hours, ensuring efficiency in the tracking process and accurate billing for the company and the client.
Benefits of Time Tracking Software
Lawyer increment charts are useful for doing the quick calculations needed to convert hour increments to billing rates, but it’s still not as efficient as it could be. Time tracking software takes it a step further with effective, convenient, and accurate timekeeping.
Automatic increment calculation: Rather than manually calculating time increments and billing rates with a graph, time tracking software uses predefined rates to automatically round time entries to the nearest increment.
Simplified time tracking processes: Time tracking software helps you record your billable hours as they happen, instead of trying to memorize them later. You can add time entries to meetings, events, tasks, emails, etc.
Real-time tracking: Time tracking software has automatic timers to record how much time you spend on a task, so you don’t have to guess or risk forgetting your hours.
Several devices: Using a cloud-based format, time tracking software can track time entries on the mobile app to record your time while working remotely or meeting with clients in the field.
Best practices for managing billable hours
Law firms can bill efficiently and transparently when there are standards in place for billable hours.
There should be rules in place for billing increments. Use policies to explain your rates and billing practices to customers and staff. These policies should include the rate, billing increments, billing intervals, and billing method. This helps manage client billing expectations and ensures attorneys understand the processes.
Detail your billing
It may be faster to multi-task and include multiple tasks in a block of time, but that doesn’t inspire client confidence. Take the time to detail the tasks separately for more precision, transparency and clarity. This can be facilitated with custom invoice templates that can be pre-populated and stored for future and ongoing use.
Use detailed descriptions
Detailed yet concise descriptions are essential for transparent billing. These descriptions should include enough information for customers to understand how you spent your time. If a dispute arises, this can be used to jog your memory to help you keep track of how much time you spent as well.
Accurately track time
Whether you choose a manual billing increment chart or efficient time tracking software, make sure your billable time is accurate and in real time. With the use of multiple timers, you will not forget the time spent on a case or estimate the time in favor of the company or the client.
Do not complete your bill
It may be tempting to round up to the nearest increment or hour when billing, but it’s not best practice. Filling in your hours — intentionally or unintentionally — is unethical, inaccurate, and potentially damaging to your company’s reputation.
Replace Lawyer Billing Increments with Legal Time Billing Software
A table of attorney billing increases was a useful resource when manual timing was the best practice. With the introduction of legal technology, law firms no longer need to spend hours counting their hours and doing the math to bill clients. By implementing legal time billing software, your law firm has access to an automated process that ensures accurate, convenient and efficient time tracking and billing every time.
©2006-2022, BILL4TIME. ALL RIGHTS RESERVED.National Law Review, Volume XII, Number 238