How to Generate Billable Hours in Small Law Firms?

One crucial element of law firm life that is nearly impossible to ignore is the “billable hour.” Almost all law firms generate their capital by billing their clients on an hourly basis. In order to be productive to your firm, you must generate enough money from your billable hours not only to cover your earnings and your expenses but also to generate profit for the firm. It’s not a complex equation – the more hours you bill, the more profit for the firm. 


Not every law firm has the same significance on billable hours. Public lawyers, small law firms, and lawyers outside of huge urban areas usually demand less billable hours and may put more importance on training, client relations development, society-related endeavors, and the like activities. Additionally, government and public interest companies usually do not have any billable hour needs as they do not bill their hours to a paying client.

Read Also – Importance of time tracking for lawyers

A basic billing process for a law firm looks like this

  1. A new client is brought to a firm with its case
  2. Billable hours and expenses are calculated throughout the case
  3. At the end of each month/case invoices and fees for each client is put into a draft bill
  4. Lawyers review the bills and adjust costs as needed and approve the bills
  5. The final version of the invoice is created and sent to the clients for payments
  6. The clients can pay with whatever method they choose
  7. Accounting teams send reminders for the late payments

While it all seems pretty easy and smooth, there is still room for mistakes and wasted costs. Like attorneys taking too much time in approving and sending out the bills for payment.

So how can your law firm generate billable hours? Legodesk has been providing an amazing billing and timekeeping service. After working with thousands of lawyers and law firms we’ve noted down some of the best practices to remember to make sure every hour possible is recorded and billed accordingly.

Read Also – Difference Between Billing and Invoice

1. Record every minute of your time

It’s time to literally think about time as money for your law firm. Going out for a 90-minute lunch may be okay in your firm, but that’s a loss that would probably need the firm’s head’s approval if you treated that time as money. The answer is for your firm to set up a documented time policy. The simple habit of tracking downtime can change the mentality and culture at your firm.

2. Set up a wall between the billing and time entry processes

Make sure all the billable time is recorded should not happen at the end of each month when draft bills are being generated. Correctly, you want to erase the time between really working on a billable item and when the time entry is recorded. Setup a policy where time entries are reviewed and checked each week. Keeping this in mind, your billing accountant will not be running from one associate to another at the end of the month because one of the senior lawyers asks if all the billable time is on a pre-bill.

3. Record all-time by end of day

Many lawyers will wait until maybe the end of the week to calculate and enter their time for the week. Which results being a game of fill-in-the-blanks as they try to fulfill the 40-hour mark. By noting down and checking their time at the end of each day, there will be no need for the end of the week guessing game.

4. Record all the time, instead of just billable time

This is one of those methods to actually count time as money. If senior lawyers know in what task all the time has been spent, they can reorder and shift focus appropriately to gain maximum efficiency and use of time.

5. Review missing time once a week

Appoint your accountant the job of reviewing each Monday the missing time from the previous week. It’s easy to work with your timekeepers to fix any time missing because there’s very little time slipped.

Generally, the first conflict on time missing comes when an attorney is checking draft bills. This can usually mean weeks have passed since any work was done and a lot of effort and time is going down the drain trying to track down the elapsed time.

6. Commission incentives

If your law firm has this policy, pay your time trackers based on a commission received. When timekeepers know that their efforts to track time speedily and accurately will affect their own paycheck, you’d be surprised how well they can perform this task!

Billing requirements

If you are working in a huge firm, then there must be strict rules about the billing process like when invoices must be sent to the clients or how the invoices should be formatted. However, if you work at a small law firm, you should still follow a standard set of rules for the billing process to maintain consistency.

Best way to generate billable hours in small law firms

Now, we are talking about the best, easiest and smart way to generate billable time in small law firms – Legodesk. Its effective integrated billing software lets you get paid faster, generate invoices on time, send bills automatically to clients and so much more.

Legodesk allows you the luxury of automation. With its smart invoicing system, you can set invoice generation dates and mail them to clients automatically. Also, send reminders via setting up grace periods for late payments and automatically apply interest on late payments.

Read Also – 5 KPIs to Make a Law Firm More Profitable

Furthermore, with its smart editable invoicing option, now you can view all the unpaid invoices in one place with one click and urge your clients to pay. Now you don’t have to create a new invoice every time, you can just edit the existing invoices according to your needs.

Additionally, with the reports and analytical tool, you can track your law firm’s financial performance and get thorough insights to help in future growth. With the help of this feature, you can make correct and important business decisions if you have a deeper understanding of your firm’s financials.

Moreover, Legodesk also offers a custom payment set-up where with the help of a customized payment calendar, you can track each account separately. Also, you get to track each transaction, payment failures, delays, and success smoothly.

This all-in-one legal management software not only helps you in running your law firm smoothly but also saves time and money with smart finance management.

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by Abhishek Sharma

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