Disturbing findings for legal departments regarding time tracking by law firms

Am. Legal Tech. Insider (#24) July 2010 summarizes findings from a survey by Smart WebParts of lawyers’ time recording practices. Four findings should perturb in-house lawyers who care about external costs.

It should disturb in-house lawyers who struggle to keep external costs from running away that “the average leakage (lawyers and other time keepers failing to report all billable time) ranges from $20,000 to $40,000 per person, per year.” What if firms plug the leaks and bill that time?

It should disturb in-house lawyers that law firm overhead for keeping time averages 3.1 hours per timekeeper month. Given the “mean billing rate of respondents was $438 per hour, this indicates an imputed cost of $16,294 per person, per year.” Doesn’t that administrative time finds its way, at least partly, into billed time?

It should disturb legal departments that think time tracking is accurate that “among all respondents 60% reported reconstructive time keeping practice, entering their time at the end of the day or days later by looking at emails, phone logs and appointments.” Memories are notoriously fallible and law firm billing pressures may ineluctably lead to, shall we say, generous recollections?

It should disturb bill reviewers that “54% said they prepared timesheets daily. One-third (34%) said they prepared timesheets between once and twice a week. The remainder (21%) said they did it between once and twice a month.” After the fact recollections inspires little confidence in its accuracy.

And then the lawyers distribute task codes to the hours so loosely assembled!

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