How Do I Track My Billable Hours?

Lawyers track billable hours in a variety of ways, some more effective than others. The two most common methods for tracking billable hours are:

1. Legal Software: Many attorneys rely on specialized legal time tracking software with built-in timers and task-tracking capabilities. This technology allows for accurate logging of hours spent on client-specific activities. Each entry is tied directly to client cases, making billing and financial tracking seamless.

2. Manual Timekeeping: Some practitioners still prefer traditional methods like spreadsheets or handwritten logs to record their time. For those who prefer manual timekeeping, keeping billable hours vs. actual hours separate demands high discipline to ensure accuracy.

Choosing the right method can make a big difference. To help you decide, let’s explore what billable hours involve and how you can manage them effectively.

What Is an Example of a Billable Hour?

A billable hour is time spent on tasks that directly benefit a client. For example, when you are drafting a legal document, that’s a billable hour. Meeting with clients or opposing counsel also counts. These tasks involve using your expertise to move a client’s case forward.

Other examples of billable hours include:

• Researching case law
• Preparing for trial
• Reviewing a case file
• Attending court hearings
• Taking depositions
• Consulting with experts
• Attending mediation 

It’s important to separate billable hours from non-billable ones. Time spent on administrative work, like managing your firm’s website or attending internal meetings, isn’t billable. The key is to keep your billing clear and honest. Billing accurately builds trust with your clients and ensures you’re compensated fairly for your work.

Using proper timekeeping practices helps you log these hours accurately. Legal software is particularly beneficial in tracking your time efficiently, reducing the risk of errors that occur with manual logs.  Whatever method you choose, make sure you track your time in a way that works best for you. This way, you won’t miss out on billing for any work done.

For additional guidance, you can use UTBMS (Uniform Task-Based Management System) codes to determine what qualifies as a billable hour. These codes standardize legal work, billing, and categorization, making it easier to track and bill accurately. You can find more information on UTBMS codes here.

How Do You Account for Billable Hours on the Go?

Tracking time efficiently and accurately has always been challenging, but the rise of remote and hybrid work has added complexity. Modern lawyers now work on the go and in different locations, making it more difficult to track hours in real-time.

However, mobile apps and digital platforms designed for lawyer time tracking can help with logging hours in real-time, no matter where you’re working.

For example, Bill4Time offers sophisticated timekeeping tools to capture both billable and non-billable hours in real time from any device with an internet connection. With the accompanying mobile app, you can easily set and stop timers, pick up where you left off, and convert appointments into time entries from any device at any time.

Though trying to figure out how to track billable hours in Excel or building a billable hours calculator in Excel might seem like viable options, they often end up being tedious and error-prone. Legal time tracking software makes things easier and more accurate, so you can rest assured your billing is correct.

How Do I Calculate Billable Hours?

Logging and tracking hours is only one part of the equation — you have to calculate your billable hours, too, starting with choosing an appropriate billing increment.

The standard 6-minute increment is the “sweet spot” for time, but it’s also easy to calculate. 6-minute increments are 1/10th of an hour. To calculate time, divide the time spent in minutes by 6, which is equal to 0.1 of an hour. So, for a 37-minute task, you would have six increments or 0.6 hours.

Similarly, if you use 15-minute increments – another common increment in the legal industry — you would divide the number by 15. Each time increment is 0.25 of an hour, so 45 minutes of work equals .75 hours for billing. This calculation is often second nature, since we tell time based on quarters of an hour.

Once you have your work time represented in hours, you must calculate your billable hours. Multiply the increment by your billable hours rate for billing.

For example, if you worked for an hour and 10 minutes with an hourly rate of $300, the calculation would be 1.2 x $300 = $360. The $360 total is what you’ll bill to the client for that time, plus any other hours or expenses.

Tips for Calculating Billable Hours

The billable hours process takes time to perfect. Here are some best practices to ensure accuracy and efficiency:

• Understand your billable and non-billable activities, such as client meetings and case research (client case) vs. billing and invoicing (administrative).
• Stay consistent with your timekeeping practices, including your billing increments and hourly rate, the tasks you bill for, and how often you bill clients. This process ensures you are transparent and builds client trust while minimizing the risk of errors.
• Track your financial performance with billable and non-billable hours. Look for trends to determine what tasks are profitable for your firm, what tasks aren’t, and how you can improve efficiency and productivity.
• Use time tracking software to record your billable hours accurately. Investing in professional, legal-specific time tracking software offers more capabilities and features to elevate your time tracking and billing processes.

How Can I Track My Billable Hours for Free?

While you can track your billable hours for free using basic apps, these often lack security or features specific to lawyers. Some other limitations include:

• Data Loss: Inadequate security can lead to lost time entries and compromised data.
• Manual Errors: Free apps can lead to manual entry mistakes, resulting in inaccurate billing.
• Lack of Real-Time Tracking: Some free apps do not offer real-time tracking, making it easy to miss logging crucial billable hours.
• Security Risks: Free apps often have weak security measures, risking sensitive client information.
• Restrictions: Free apps may limit the number of clients or projects you can manage and might display annoying ads.
• Limited Features: Even the best free time tracking app may lack essential features like advanced reporting note-taking capabilities.

A free billable hours tracker for employees at your firm might seem attractive, but free versions often have hidden costs. Security risks, missing features, and the potential for errors make them less suitable for professional use. Investing in specialized legal time tracking software can enhance your practice’s efficiency, provide peace of mind, and help you serve your clients better.

For example, you might find Bill4Time a valuable solution. It offers automatic time capture, secure data storage, and detailed reporting, making tracking and billing straightforward. Check out a free demo or start a free trial to see how it works for you.