Billable Hour Q & A

It’s close to the end of the year, and if you’re a paralegal working in a law firm with a billable hour requirement, you might be stressing about it. So we asked our podcast listeners to send us their burning billable hour questions, and Ann answered them in a recent episode. You can also read them below.

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Q.

I get asked not to record time spent on a particular project (usually asked by the same attorney). Then it looks like I billed fewer hours than I actually did. What can I do about this?

A.

There are a couple of things you can do. First, maybe the lawyer doesn’t realize that you also have a billable hour requirement? I know.  We all think they must know this, but you would be surprised how many lawyers (especially young associates) don’t realize that paralegals in the firm also have a billable hour goal to meet.

I’d start by making sure they know you have to hit that billable hour goal just like they do. A way to do that, and give you a way to address the problem, is to respond something like this when they tell you not to record that billable time:  “Ouch. That’s going to hurt my billables for the day. In addition to looking bad to (Mgr/Hr Person/Supervisor), it’s going to ding me at the end of the year because my bonus and raise depends on me having a certain number of billable hours. Are you sure that I can’t bill for this?”

If they respond that you can’t bill for it because it’s nonbillable work or the client won’t pay for that type of work, then you could respond something like: “Oh! Okay. That makes it easier! I’ll just ask a secretary (or another nonbillable person) to help out on it, and I’ll oversee their work so that I don’t get dinged so bad on the billables.”

Now, if it is genuinely billable work that you’re being asked to do and not put your time down for, then that’s an even bigger problem.  But it’s still a similar response. They have to know that what they’re asking you to do will affect your bottom line. It will affect your wallet at the end of the year. So you could add to your response the suggestion that you at least enter the billable time into the timekeeping system and let the billing partner write it off. 

And that’s why it’s an even bigger problem.  First, suppose you and several others throughout the firm are doing this – working on billable projects that you never enter your time for – and the impact it could have on a bigger scale. In that case, management will never know there’s a problem with what was budgeted for that client or how the client’s files are being staffed and managed.  All they know is you’re short on your billable hours for the year. That’s it.

The second reason it’s an even bigger problem is that if you never even enter the billable time into the system, it’s as if you never did the work. 

Imagine if the firm was sued for malpractice for not doing enough work to “diligently defend” that client. One way to defend that is by pulling up the billable hour reports that essentially are like a chronology or record of everything the firm did to represent that client. But wait! Half the time you spent on it isn’t even there because you didn’t enter the time into the system. It’s like the tree that falls in the forest, and no one hears it.

billable hour questions

Q.

I worked on a project that my attorney said they only had 3 hours in the budget for, and when it took almost 6 hours, she wrote off all that extra time.  What can I do about stuff like this?

A.

I’d start by giving them a better idea up front of how long the project might take. For example, if you’re working on a bunch of witness notebooks. Let’s say there are 20 witnesses.  After you finish the first 2, you can estimate that each one takes an average of 3 hours from start to finish (one of them took 4 hours and the other took 2 hours, so you can assume that half of the remaining ones will be as complex as the 4-hour one).  Go to the attorney and let her know that, based on what you’ve done so far, you estimate that this project will take X hours to complete.  Ask if that’s what she had in mind for the project budget.

Another thing I would suggest is if you’re told in advance that the project is only budgeted for 3 hours. When you get to 2 hours and realize you aren’t even half done with the project, go to the attorney and let them know the status and how much longer you anticipate the project taking you to complete. That’s where you’d want some metrics to be able to estimate.  Let’s say in this example that you’ve completed half the notebooks in 2 hours. I know it might be tempting to think to yourself, “Well, I’ll just work harder to try to finish it within that 3-hour timeframe.” I’d be careful with that mindset because the only statistics you have so far is that half the project has taken 2 hours.  Why would you think you’d be able to finish the other half of the project in half the amount of time? Luck? Cut corners? It’s probably not going to happen unless you cut corners, which then puts you into a position where you might make mistakes.

Now there is another angle to the question as well.  Let’s assume you’re not told in advance what the budget is – which is what typically happens.  You find out afterward that the attorney thought it should have been done in less time. Whenever there are write-offs, you also have to ask yourself – is the attorney writing off that time because the time entry itself – the way the time entry is drafted – does it convey the real value of the work I did? Could I do a better job describing what it is that I did?

Q. 

Sometimes, it’s not clear whether or not I should bill for some of the things that I do on a regular basis. Is there a list somewhere out there for new paralegals to use that lists things that are typically billable versus nonbillable?

A. 

Good question! And no. There is no list, except maybe inside the client’s billing guidelines, which I would highly recommend that you ask because it surprises me every day how the client billing guidelines get uploaded to a file somewhere. The only person who ever reads them is the billing partner. So first and foremost, look to the client billing guidelines as to what they say they will pay for and what they won’t pay for. 

Now, most clients don’t put out billing guidelines unless you’re in the insurance defense area or the client is a big corporation.

So the person who sent in this question is not clear on whether or not he should bill for some of the work he’s doing. The best way to answer that is something we do in the Billable Hour Boot Camp course.

Ask Yourself These 5 Questions

The more “yes” answers you have, the higher likelihood that you should be billing for the time spent

1Will the client pay for it?

Because if the client has said they’ll pay for it, then really the other questions are almost irrelevant. Here’s an example, in most cases client won’t pay for a paralegal to draft a notice of deposition anymore. That’s because in most cases, not all, but in most cases, it’s a plug-and-play form that a secretary should be able to do pretty quickly. They need the deponent’s name, the deposition date, court reporter name, etc., and just about every law firm in existence has a template for one in every case. And the clients know this. Back in the 90s, we used to bill clients all the time for drafting deposition notices. Not anymore. But let’s say your client does actually pay a .1 to draft a deposition notice. Okay, then it’s billable. Even if you answer no to the remaining questions.

2 – Did the attorney ask me to do it?

Does the attorney have to ask you to do it for it to be billable? No. That’s not what this list of questions is for. You only need to use this list of questions if it’s something you’re not sure if it’s whether or not it is billable work.

3 – Does it move the case/transaction/client goal forward?

A good example that I can think of for this is filing and organizing—just general organizing. I’m not talking about organizing the expert’s notes in chronological order so that they can be summarized or something. I’m talking general organizing of the file. So even though it’s working on the client’s files, it’s not moving things forward. It’s helping you to find things easier, but it’s not moving things forward.

4 – Is it something the attorney would do if there were no paralegal there to do it?

Now, where some people get tripped up here is including the secretary in this equation.  Forget about the secretary. If you weren’t there, would the attorney do it?

Here’s an example of what I mean:  there’s a deposition tomorrow.  Would the attorney find and put together the deposition exhibits? You bet they would if the deposition was tomorrow. Compare that to organizing the file. If you weren’t there, would the attorney be organizing the file? Probably not.

5 – Is it substantive in nature? In other words, is it something that provides a benefit to the case, the transaction, or the client in general?

Let’s go back to organizing the file.  That doesn’t benefit the client. It benefits you so that you can find things more easily. Now you might say, “well, then if things weren’t organized and it takes me longer to find something, the client ends up paying more money. Not in today’s world – because the clients will not pay for 3 hours to do something they know only takes an hour and a half. They just won’t. Yes, you might be able to get away with it a few times, but that client is not going to be around for long.

billable hour questions

Q. 

My firm’s billable hour goal is 1,600 hours per year, around 135 hours per month. I hit that target number most months, but then in months like November and December or July when I take a long vacation, I’m short – so then by the end of the year, I never hit 1,600 hours, but I come close. So shouldn’t the monthly billable hour goal be lower in certain months?

A. 

This is a big one. I hear this all of the time. You’re not alone. That’s why I developed a Billable Hour Calculator Tool.  It’s available online for you to use for free. I’ll put a link to it in the show notes. But I have to warn you …there is no way to download it. We do give it as an Excel file in our Billable Hour Boot Camp, but the free version is an online tool – kind of like those mortgage calculators that you input your information, and it spits out the answer for you, you write it down and then go back to the page if you want to take a look at some different calculations the following month.

But here’s why I developed that calculator…I would see this happen a lot. Exactly what this person said: I’m missing my annual target every year, but I’m hitting my monthly target almost every month.

Here’s the thing. There are only so many work hours in any given month. And every month is different depending on the number of holidays and number of PTO days or vacation days that you take.  I would suggest that you stop looking at your billable hour goal on a monthly basis and think, oh, that’s great I hit 135 this month, not realizing it’s a month where it really should have been 145 or 155 because there were more work hours available that month than there is going to be next month.

You can check out the billable hour calculator here. Go into it and adjust the billable hour goal at the top, your average work hours per day, and your holiday and vacation schedules. It will show you how many total work hours are available in each month based on your calculations, and then it will give you numbers based on not working any overtime. 

Then there’s also a column that you can input how many actual billable hours you put in each month, and the calculator will tell you how many billable hours you need to average each month if you want to hit that annual target. I think that will be one of the actionable strategies for this episode: plan your year, not just the month – and go use that billable hour calculator to help you do that.

Q.   

I found your billable hour calculator on your website, and when I put in my numbers, it looks like I’m averaging only about 70% of my day is spent on billable work (and I was shocked! Because it seems like I’m super busy all day every day).  What can I do to increase that number?

A. 

What a great question! And you’re not alone. We all have the occasional day when we are jumping from project to project, working our butts off all day, and then when we put in our time, we only have five billable hours and are like, “wait a minute! I was super busy today; it’s not like I was sitting around twiddling my thumbs or scrolling through my Facebook feed.”

After all of these years of coaching about billable hours, what I’ve found is that it’s not usually that you’re not busy enough. It’s that you’re not capturing all of the billable work that you’re doing. In the Billable Hour Boot Camp course, I go into detail about the many ways you could be losing billable time, so I’ll give you the top 1 fix that you can make today that will get you some traction right away. And that is to enter your time into the timekeeping system contemporaneously while doing the work. Not waiting until the end of the day or the end of the week – and most definitely not the end of the month.

Billable Hour Questions

Billable Hour Boot Camp

Online course and coaching program that gives you proven methods to increase your billable hours, draft better time entries, and be more productive so you can get out of the office earlier.

Learn More

Studies out there say the longer you wait to input your billable time, the more time you lose. So even if you’re tracking it during the day, maybe writing it down or using a timer on your computer. And that’s because you will always forget a .1 here and a .1 there. Or, as you’re finalizing those time entries, you don’t remember all of the detail of precisely what you did, so you chop off some of your own time.  I call it ghosting your time.

One study that came out several years ago said that if you wait until the end of the day to enter your time, you’re losing around 10% of your billable time.  So if we’re looking at an 8 hour day, that’s a .8 – which doesn’t sound like much, but if you add up a .8 every day, that’s a lot of hours at the end of the month.

Start entering your time while you’re doing the work. For the person who sent in the question, let’s say she’s working an 8 hour day. She says only about 70% of her day is entered as billable work…that’s 5.6 billable hours. Add a .8 to that, and she’s at 6.4 hours.

Do you have billable hour questions?

Post them in the comments or email us and we’ll include them in our next Q & A podcast episode.

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Meet the Author

Ann Pearson is the Founder of the Paralegal Boot Camp, host of the Paralegals on Fire! Podcast Show, and passionate about promoting the paralegal profession.

Ann spent 20 years working as a paralegal manager and a litigation paralegal before opening the Paralegal Boot Camp in 2010. Her training programs focus on adding immediate value to a paralegal’s career and bridging the gap between what a paralegal learns in school and what they actually do on the job.

When Ann is not working, you can usually find her somewhere near the ocean, either boating, scuba diving, or rescuing sea turtles.

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