Is Tracking Time a Waste of Time?

 

Last week, Loretta Ruppert provided us with the reasons she thinks lawyers should track all of their time, billable or not, regardless of the way they calculate fees for clients. This week, I’ll give you my take on this issue.

 

I agree with Loretta that to increase productivity and work satisfaction, it pays to analyze what you’re doing now in order to see what needs to change and how to improve in the future. But I’m not convinced that tracking your time in six minute increments, or writing down everything you do in a week or a month is the answer.

How Accurate is Your Timekeeping?

First, no matter how meticulous you are about tracking time, you are probably missing some, or incorrectly allocating time. As Loretta mentioned in her post, it isn’t uncommon for lawyers to be sitting in their offices for 12 hours and have only 6 hours of billable time on a time sheet at the end of the day. I know that when I was practicing, that was a common experience. But even writing down the non-billable activities isn’t likely to capture all of your time, because most people are not going to count “interruption” time correctly – or at all.

For example, let’s say you are working on a contract for client A when you are interrupted by a telephone call from client B. Even if you stop the clock on the task for client A and time the call with client B, and then resume counting time for the client A contract when you get back to it, your time isn’t likely to be accurate. It may take you much longer to complete the client A contract then it would have without the interruption - you may need time to review where you were or what you were working on, and studies show that it takes time for the brain to switch gears. You may also be somewhat distracted by client B’s problem or what needs to be done next for client B while you are working on the contract for client A – so does that time ‘count’ for client A, or client B?

Even if you are tracking time for productivity purposes and not for purposes of billing the client by the hour, your numbers will likely be ‘off.’ You may decide that you spend too much time on contracts and you need to shave that down in order to be profitable on contract matters, when your real problem may be that there are too many interruptions and you are not managing your activities in the best way possible.(For another example of inaccurate time allocation, see the deposition example in my post , “Can You Really Ditch Timesheets If You’re Not Billing Hourly?”)

Timesheets and Profitability

As for the question of profitability, I wrote a blog post on that issue some years ago, entitled, Do You Need Timesheets to Determine Profitability? In that post, I pointed out that if you want to use time as a factor in determining profitability, you would have to keep track of all of your time (as Loretta recommends), but you would also have to figure out how to allocate all of the non-billable time among the different files. How can you use time to determine profitability of a particular client or a particular matter if there is non-billable time that is not allocated to those matters? Would the non-billable time be allocated equally? Should it be?

The big problem with thinking that profitability is tied to hours is that such a system requires you to put a ‘value’ on an hour – and even if you are billing hourly, every hour is not equal in value – to you or to your clients. Some non-billable hours spent cultivating client relationships or creating value for them may be worth more than your hourly rate. Some hours you spend on client work are worth less to the client than others (which is why when lawyers bill by the hour, they make adjustments to the bill).

So how does keeping track of hours help determine profitability of a particular client or matter? The only way is to assume every hour is worth $x and compare that way – but we know that assumption is incorrect – and it is even more damaging when the firm is not billing by the hour, because it puts the focus back on time, rather than on creating value for the client. Alternatively, you could assign a different value to different tasks and then multiply the time by the value of that specific task –that would not only be complicated, but begs the question – if you can already assign value to the task, why bother with the hours?

Timesheets as a Measure of Productivity

For purposes of productivity or workflow management, keeping track of how long it takes to perform a discrete task or group of tasks over a set period of time may be helpful. It can be an eye-opening experience to see, in black and white, just how much time is spent responding to email, or setting up a client file, or sorting through the daily mail. But it is unlikely that someone tracking all of their time is going to allocate time to “looking for the Hudson file;” instead, they will likely track it as part of the work they do on the file, which would defeat the purpose – unless, of course, the purpose of tracking time is solely to see how much time is wasted by looking for files, or being interrupted, etc. And in that case, rather than tracking everything in detail you can pay attention to those few tasks for a limited period of time.

The truth is that tracking time is, in itself, time consuming (do you keep track of how much time it takes to track your time and write down the details?), and it doesn’t measure the things that really make a difference for law firm profitability – most notably, the client’s experience with your firm. Looking simply at the numbers – this is how much time we spent and this is how much we were paid – doesn’t tell the whole story. Those numbers can’t tell you which clients will return to you with new work or refer other business to your firm. The numbers can’t tell you whether what you learned during that particular matter could be useful to another client in the future, allow you to increase your fees or attract new and better business.

As I said in “Can You Really Ditch Timesheets If You’re Not Billing Hourly?”:

“It isn't the lawyer's time that's valuable, it's the knowledge and experience that they bring to a client's problem or situation, and the manner in which they apply that knowledge and experience. The value has nothing to do with the length of time a lawyer is working on a particular task or matter.”

Putting the emphasis on the time spent, rather than on the experience the client has with your firm throughout the engagement and the results achieved puts the emphasis in the wrong place

On an individual, short-term productivity level, I agree with Loretta that occasionally keeping track of how you spend your time at work can be very valuable. But on a firm-wide level, or as a measure of productivity or a means to manage and evaluate employees, I don’t think spending time and energy tracking all of your time is the way to go.

What do you think? Let us know in the comments

 

Comments

[Allison Shields]

Jack,

I agree than an attorney's rates, regardless of how they are calculated, need to take into account the work that they do that may not be billable to a particular client. But the fact is that no matter how well they keep track of time and what software they use, they're not really charging by the hour, and the hour isn't really what the client is paying for.

I don't think billing in six minute increments solves any problems with "non-billable time." For most tasks, if you're completing the task in six minute increments and switching between multiple tasks at once, you're probably taking more time to complete all of those tasks than you would if you did them one at a time, and the quality of the work is generally going to be inferior. It's a fiction, and it works to neither the lawyer's nor the client's advantage.

[Jack]

"it isn’t uncommon for lawyers to be sitting in their offices for 12 hours and have only 6 hours of billable time on a time sheet at the end of the day"

There is nothing wrong with that if your hourly rate reflects such amount of non-billable time and at the end of the week you get enough money.

Also six minutes increments method solves some of the issues with non-billable time, switching between tasks and losing context.

In order to no waste time for the calculations you just need the right tool like http://MrTickTock.com which supports quick start/stop counter, tasks switching, six minutes method, comments and other.

[Anna]

Gyi, I think you pointed important things about the time tracking. Because beside the billing purpose, time tracking is also important for the later analysis of the recorded data. If you are using a good time tracking tool you can choose what information you will get in the reports and how often you need to receive those reports. I'm using now a desktop app - www.timetrack.eu, but there is also a version for mobile devices available. What I like the most about this tool is the possibility to set the automated reports that are sent on my email.

[Thomas L. Bowden Sr.]

Timothy - Judges are often wrong - as evidenced by the fact that we have courts of appeals. It will take time and patience, but ultimately the profession can overcome its misguided fascination with the Marxist Labor Theory of value which never made sense even in the 19th century as to manual laborers, not to mention 21st century knowledge workers.

[Allison Shields]

Summer,

Thanks for your comment - but my point is that I don't think tracking time is the best way for lawyers to either bill clients (if they have a choice) or manage the work that is being done in their offices. While I can see the utility of programs that track what you are doing on your computer for certain things, I don't think this is any better than the ways that attorneys traditionally track time now (most often, using practice management software with timers that allows them to enter the time contemporaneously).

[Summer Daza]

I am also into tracking time no matter if it's billable or not. Tracking your time when working is very important nowadays. With this, you would know how much time you were spending on a certain task. You could analyze if you could do it a little faster or what you have done that took a lot of your time.
Personally, I prefer the web-based online time tracking tool like Toggl. However, if you need help or a guide on finding an alternative time tracking software, I've just recently read a blog that have tips. You might find it useful. You might find it interesting.
http://www.timedoctor.com/blog/2010/11/16/5-reasons-why-most-time-tracking-software-is-flawed

[Allison Shields]

Gyi,

Tracking time generally is one thing, but the traditional methods of tracking time for attorneys are more time consuming than they are worth and put the emphasis in the wrong place. But you do make an excellent point about what attorneys should do once they have that information. Unfortunately, the incentive for attorneys who bill by the hour is to reduce efficiency and increase hours, rather than the other way around.

When not billing by the hour, attorneys can use general time information to inform turn-around time, workflow and productivity and seek to improve not just efficiency, but effectiveness.

Thanks for engaging in conversation with me on Google Plus on this issue - if anyone would like to see it, check it out here:

https://plus.google.com/u/0/117235644077949816393/posts/cb9xTKRUSF3

[Gyi Tsakalakis]

Hi Allison,

Whether you bill for your time or not, time is a resource and should be tracked.

Do lawyers track other resources at their firm, like say, money? Hopefully.

But tracking time is only the beginning. The next step is what you do with your time data?

Do you analyze it? Do you take action to be more efficient.

[Allison Shields]

Timothy,

As I've mentioned in other blog posts (including those referenced in this post), unfortunately, where there are fee shifting provisions or other instances in which the courts will be reviewing or setting fees, lawyers have no choice but to charge by the hour, which necessitates tracking time for their billable activities. Hopefully courts will begin to place more emphasis on the other elements that determine whether a fee is reasonable and stop relying so much on the amount of time spent, but until that happens, you'll need to do what the court requires.

Thanks for sharing your experience.

[Timothyevans]

I must track my time, at least on matters with fee-shifting provisions. The judges I have talked to specifically reject the proposition that you can test the reasonableness of a lawyer's fee without examining how much time was spent on the matter.

In hypotheticals I've posed to judged where a dispute has arisen between a lawyer and his client, they have unanimously opined that no fee could be reasonable without the lawyer proving how much time was spent on the matter.