Put simply, billable hours are the hours of time an attorney dedicates to handling client matters. The time an attorney dedicates to certain legal issues for any particular client is paid for by the client. The attorney’s hourly rate (the amount charged to the client for each hour worked) is reflected on the client’s legal bill.
Typically, a novice lawyer will have to work a normal 9-5 job (8 hours per day or 40 hours per week). In private practice, he or she may spend additional hours to meet the clients’ expectations and demands. This can range from additional 5-20 hours per week. How many hours does a lawyer work in a week?
Software that can help your track billable hours
nine hours in a day (excluding lunch break) in a working week of five days or less. eight hours in a day (excluding lunch break) in a working week or more than five days a week. However, these times may, by agreement, be extended, especially in the case of employees whose duties involve serving members of the public.
Lawyers work hard, and they work a lot. Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year. According to the 2021 Legal Trends Report, lawyers spend just 2.5 hours each workday on billable work.
Billable hours are those hours worked that require compensation. In other words, they are the hours that you bill clients for and they pay directly.
Legal Definition of billable hour : an hour that a lawyer spends engaged in work that can be charged to a client at the hourly rate.
For example, if you want to reach a goal of 2,000 hours annually, you would need to bill for roughly 40 hours each week, or eight billable hours a day. You may not work exactly eight hours each day, but this breaks down what you should average in a day, week, and month to reach your annual goal.
For example, lawyers typically earn their money from billable hours. Rarely—if ever—do you find a lawyer who charges clients based on how many documents they inspect or how many words they write.
Common terms connected with legal billing are “hourly rate,” “retainer,” and “contingent fee arrangement.” The “hourly rate” is the amount an attorney charges on an hourly basis to perform work for the client. Hourly billing is the most common billing method used by attorneys.
Calculating billable hours is straightforward: you take how much you've worked and multiply it by your hourly rate.
It's not a complicated equation – the more hours you bill, the more revenue for the firm. Firms “average,” “target” or “minimum” stated billables typically range between 1700 and 2300, although informal networks often quote much higher numbers.
2080 billable hoursIf you do the math, 260 days x 8 hours per day = 2080 billable hours in a year.
Under normal circumstances, considering a 5-day workday week and that there are 52 weeks in a year, 3000 billable hours would mean logging 12 billable hours a day, and that would then entail working 14-16 hours a day, every day of the 5-day workday week, for all 52 weeks of the year. Not a pretty prospect.
Unless someone told you otherwise, bill all the time you spend on a task, even if you know some of it will be marked down. At most firms, you will still get credit toward your billable hour goal for all the time you enter into the firm's billing software, even if not all of that time is billed to the client.
Illustration: the average billable hour requirement is probably 2,000 billable hours per year. That's 40 billable hours a week for 50 weeks - not so bad, you get two weeks off!
What is the distinction between billable and non-billable hours? The appellate Courts in Arizona weighed in on this issue in Ahwatukee Custom Estat...
Billable hours are what generate the income of a law firm, so that it can pay salaries and overhead costs. They are what make the firm money. As a...
Most firms keep track of time in tenths of an hour, or six (6) minute increments. So for each six (6) minutes of time you spend working on a client...
No matter what method your firm uses to create and send invoices, your time will need to be recorded somewhere so that either you or the person in...
Billable hours are the lawyer hours that clients pay for directly. There are tasks that a lawyer does that is just part of the work needed to work at a law firm but then there are tasks that are directly related to the client’s case. Time spent on tasks directly related to a client’s case can be billed for the most part to the client.
For lawyers who are working 70 or even 80 hours a week, it can become easy to forget how that time was spent and how much of that time really is billable hours. Fortunately, when law firms use legal practice management software like Smokeball, they can easily track lawyer work hours and create a billable hours chart that allows partners ...
It’s important that law firms devise effective strategies for getting the most out of their billable hours while helping lawyers and clients understand just how law firms bill. December 18th, 2018.
When law firms are making their billable hours targets they need to consider their profitability but they also need to consider the practicality of demanding that lawyers work incredibly long hours as a standard instead of an exception.
Once a law firm has paid all of their expenses, the profit/equity leftover is shared amongst the equity partners. If lawyer hours in the law firm didn’t include enough billable hours, equity partners could face a serious decline in their compensation.
When lawyer work hours are tracked with legal billing and time tracking software, they should use very descriptive language on each entry so that a non-lawyer can understand what work was done. When clients can see the details of the work done on their case there is less confusion and fewer billing disputes.
It’s important to note that while the majority of traditional law firms focus on billable hours, public interest law firms don ’t bill their hours to a “client” and small law firms outside of large cities may not have such a high billable hour requirement for their associates.
Billable hours are any hours worked that must be compensated. If you spend four hours balancing a client’s books, and you’re paid by the hour, you have four billable hours. However, you have to have a record of your time worked to bill that time to the client. And that’s just one step to recording and being paid for billable hours.
To achieve 1,832 billable hours, the associate would have to work 10 hours and 20 minutes a day, every day, for 47 weeks. To meet today’s industry average of 1,892 billable hours, an associate would have to add 60 more hours in the year. That’s around 15 more minutes of billable time a day, which culminates in an average workday ...
To invoice for billable time, you have to track time. And there’s no better tool for tracking time than TSheets. With TSheets time tracking, you can track time against clients but also against jobs or projects for those clients. Customize your billing with the option to set billable rates, depending on the client or job. Upgrade your account to get job costing features that let you track time against a project’s expected number of hours. Use retrospective reports to inform your decisions and craft more accurate estimates.
Asana. If you’re going to be tracking billable hours, it helps to have a task management software or app that can organize your client to-do list. Asana is a great tool for teams looking to “organize, track, and manage their work.”. Plus, Asana integrates with hundreds of apps to create a suite of business tools.
Calculating billable time isn’t the challenging part. Tracking and recording that time, invoicing for that time, and determining the productivity of that time is far more challenging. But for those tasks, there are tools that can help.
If a client is paying you per hour, any work you do on their behalf is considered billable. Any work you do for yourself, your business, or your team—unrelated to the client—is non-billable. Depending on your industry, here are a few tasks that may count as billable hours.
Attending a mid-year review to talk about your performance is not billable time. Attending a mid-day meeting with a client is billable time. The legal industry is unique. In most cases, professionals are required to work a number of billable hours in a year to maintain employment.
The billable hour system is when a lawyer records how they spend every minute of their working day to calculate how they bill the client. It used to be the most common method of charging a client for the work of a lawyer.
Instead, billable hours are used as a measure of how busy the firm and its lawyers are.
Associates are often said to be under strain, fearing that they may not meet billable hours targets. Here’s what a commercial litigation associate based in the South West had to say:
It also helps to develop commercial awareness as trainees learn the benefits of certain strategies employed by the firm. So while billable hours should certainly be on every trainee and NQ’s radar, a fear of them should not be. After all, as Doyle says: “There are soft and hard targets.
One important aspect of law firm life that is nearly impossible to avoid is the “billable hour.” Most law firms make their money by billing their clients by the hour. In order to be profitable to your firm, you must make enough money from your billable hours not only to cover your salary and your overhead, but also to generate revenue for the firm. It’s not a complicated equation – the more hours you bill, the more revenue for the firm.
With a half hour commute (to your desk and working) you are “working” from 7:30 am to 6:50 pm With a one hour commute you are “working” from 7:00 am to 7:20 pm, Monday - Friday
If you’re a law student and haven’t worked in a law firm before, you may be curious about billable hours. The term is thrown around so often (especially during On-Campus Interviews) that it’s almost assumed everyone knows what it means.
Put simply, billable hours are the hours of time an attorney dedicates to handling client matters. The time an attorney dedicates to certain legal issues for any particular client is paid for by the client. The attorney’s hourly rate (the amount charged to the client for each hour worked) is reflected on the client’s legal bill.
In the legal arena, this becomes a key concern for every professional. The reason behind this being that each law firm has its own way of measuring attorney billable hours alongside its own rules as to what is counted as billable.
Recording the time you spend on completing every activity, both billable and non-billable, is of utmost importance as it affects your income as well as performance.
For your easy perusal, here are the different methodologies the lawyers follow to record and calculate the time spent on each project.
Now that we have gone through what constitutes attorney billable hours and the various approaches to measuring it, let’s look at a list of the top seven tools that can help you accurately track your chargeable time.
Accurate time tracking is a priority for both personal and professional reasons.
How many hours do 1,892 hours take up a young attorney’s life? Yale Law developed a chart that gave reasonable amounts of actual time spent for 1,800 billable hours and 2,200 billable hours. The chart accounts for vacations, coffee breaks, conference times and even chit-chat – all those activities that take up an attorney’s time but are not billable.
To achieve 1,800 billable hours, an associate would work her “regular” hours plus an extra 20 minutes Monday through Friday, or work one Saturday each month from 10:00 a.m. until 5:00 p.m. The first option would give an attorney 1,832 billable hours, with a total of 2,430 hours spent “at work” (AKA: including performing non-billable activities.).
But the average number of billable hours required for first-year associates at firms with more than 700 attorneys is 1,930 hours. The lesson is that if a first-year associate is going to play, (s)he’s going to have to really knock it out of the park as far as meeting the required hours.
Adam Pascarella, in an article offering advice to junior associates, listed determining your goals as the first order of business when deciding to work for big law. There are a couple of scenarios. If she plans to stay and make partner, then she must go above and beyond the required billable hours in addition to out-performing in other law firm areas. Furthermore, the hours only get longer as she moves up the ladder to partnership status.
How many hours do 1,892 hours take up a young attorney’s life? Yale Law developed a chart that gave reasonable amounts of actual time spent for 1,800 billable hours and 2,200 billable hours.
Adam Pascarella, in an article offering advice to junior associates, listed determining your goals as the first order of business when deciding to work for big law. There are a couple of scenarios.
First-year associates will probably count Billable Hours instead of sheep while trying to fall asleep. It’s just not something that will go away and quite possibly haunts the minds of several newly minted attorneys while trying to get a good night’s rest. But the hoops of billable hours are manageable.