Timesheet Coding: Multiple Codes, One Timesheet?

Timesheets are a crucial tool for lawyers to record their work hours and ensure accurate billing. While some attorneys still use manual methods like notepads or spreadsheets, others have shifted to digital solutions, such as time trackers integrated into case management software. However, as law firms grow, timesheet templates may become insufficient due to their limited adaptability and lack of automation. This leads to the need for a scalable system that streamlines processes, minimizes errors, and supports compliance. Attorneys often work with multiple clients, making it essential to track time spent on each case and set customized hourly rates. Law firms employ various strategies to facilitate accurate and timely time entries, leveraging technology, policies, and people. Accurate time tracking is essential for billing and improving law firm efficiency.

Timesheet templates

There are various timesheet templates available, from word documents to excel spreadsheets and fillable PDFs. It is important to build a timesheet template that works for your law firm and that you stay consistent with. For example, if you are a solo practitioner or a small law firm, a timesheet template can be a great tool to help you keep track of billable hours. However, as your firm grows, you may need to consider automation to save time and improve accuracy.

When creating an attorney timesheet template, it is important to include basic information such as the date, attorney name, and any other pertinent details about the timesheet for record-keeping purposes. It is also useful to break down the hours worked into six-minute time increments to quickly calculate how many hours have been worked. The task description should include details of the tasks worked on, such as meetings, research, dedicated casework, travel time, and more.

Some other features of timesheet templates include the ability to set customised hourly rates for each client, calculate work hours, and create accurate invoices for clients. Timesheet calculators can also be used to input information about work hours, lunch breaks, and overtime.

It is also important to consider the cadence of your timesheet template. Whether you choose to record time weekly, bi-weekly, or monthly will depend on the type of tasks you are working on and how often you bill clients. It is recommended that your billing cadence matches your time-tracking cadence.

Tracking billable hours

Understanding the Importance of Tracking Billable Hours

Lawyers' income is closely tied to the time they spend on client work, making time a valuable asset. Accurate time tracking ensures that lawyers can bill their clients appropriately and maximize their revenue. According to the Legal Trends Report, lawyers spend about 2.5 to 2.9 hours on billable work during an 8-hour workday, highlighting the need for efficient time management and tracking.

Choosing the Right Tools for Time Tracking

Law firms have various options for tracking billable hours, ranging from manual methods to automated solutions:

• Manual Time Tracking: Some lawyers prefer using notepads, spreadsheets, or client-specific paper sheets to record their time manually. While this approach may work for solo practitioners or small firms, it is prone to human error, time-consuming, and inefficient.
• Digital Timers and Time Trackers: Many case management software solutions incorporate digital timers or time trackers. These tools offer a more streamlined approach to recording time but may still require manual input.
• Automated Time Tracking Software: Automated time-tracking software, such as Clio, eliminates the need for manual data entry. It instantly connects billable hour data by pulling information from calendar events, tasks, communication logs, notes, and documents. This real-time tracking approach ensures that no billable hour goes unaccounted for.
• Billable Hours Charts: Lawyers can use billable hours charts, a simple table format, to quickly calculate how many increments of an hour to charge based on the time worked. This method is widely accepted, with six-minute increments (one-tenth of an hour) being the industry standard.

Best Practices for Tracking Billable Hours

To ensure accurate and efficient tracking of billable hours, consider the following practices:

• Standardize Time Tracking: Create consistent timesheet templates that work for your firm. Standardization makes it easier to bill clients and reduces the time spent hunting down information.
• Single Timesheet per Client: Instead of a comprehensive sheet, create separate timesheets for each client. This approach streamlines the process and eliminates the need for sorting and organizing time entries later.
• Real-Time Tracking: Track your time as you go. This reduces the risk of forgetting small tasks and helps capture all billable hours accurately.
• Clear Policies and Communication: Explain your rates and billing practices to clients from the outset. Clear communication helps manage client expectations and ensures a positive experience.
• Differentiate Billable and Non-Billable Hours: It is crucial to distinguish between billable and non-billable hours. Billable hours are those directly related to client matters and require compensation from the client. Non-billable hours include administrative tasks integral to the firm's operations.

Manual vs digital timesheets

Timesheets are an essential tool for lawyers to keep track of their work hours and how much to bill. While some lawyers prefer to track their time manually, on a notepad or spreadsheet, others use digital solutions such as timers or time trackers integrated into their case management software.

Manual timesheets are prepared by the employee daily, in ink, signed, and gathered at the end of a payroll period. They are cost-effective and easy to implement, especially for small companies, as there is no software to learn. However, manual timesheets are prone to inaccuracies and can be time-consuming, as employees must log their work at the end of each task, relying on memory, which can lead to underbilling. Additionally, manual timesheets can be cumbersome for managers, who have to remind employees to submit them on time, collect them, and forward them to the accounting department.

On the other hand, electronic timesheets are more suitable for larger businesses with multiple projects, various staffing levels, and employees in different locations. While they come with an initial out-of-pocket cost and the time cost of onboarding, they streamline the time-tracking process, saving time and reducing administrative burdens. Dedicated time-tracking software allows employees to set hourly rates, track work hours, and account for overtime, breaks, or absence days. It also provides control and visibility, as managers can easily analyze time entry data and integrate it with payroll software.

Both manual and digital timesheets can be customized to include sections for basic information such as the date, attorney name, and task description. However, digital timesheets offer more space to provide complete task descriptions. Additionally, digital timesheets integrate with billing, allowing data to flow directly into client invoices, eliminating the need for manual data entry and ensuring accurate and efficient billing.

Ultimately, the decision between manual and digital timesheets depends on the size and complexity of the law firm. While manual timesheets may be sufficient for small firms, digital timesheets offer scalability, accuracy, and efficiency, ensuring that every minute of a lawyer's time is accounted for and billed appropriately.

Compliance and regulations

The FLSA requires companies to maintain accurate records of employee work hours, encompassing both hourly and salaried workers. Hourly employees must receive overtime pay at a rate of 1.5 times their regular wage for workweeks exceeding 40 hours. Additionally, employers must pay employees for all regular hours scheduled, even if they fail to submit their timesheets. The FLSA also mandates that non-exempt employees' breaks shorter than 20 minutes and meals under 30 minutes be included in the timesheet and paid accordingly.

Compliance with the FLSA is crucial to avoid legal disputes, fines, and penalties. Timesheet compliance ensures accurate calculation of overtime pay and facilitates compliance with wage and hour laws. It is essential for businesses to be aware of both federal and state-specific regulations, as some states may have more stringent record-keeping requirements or additional rules regarding meal and rest breaks. For example, Washington state mandates that non-exempt employees receive overtime pay at 1.5 times their regular wage for working beyond 40 hours per week, while Texas law permits the use of timesheets and time clocks to track employee hours, ensuring compliance with wage and hour regulations.

The importance of timesheet compliance extends beyond legal obligations. Accurate time tracking improves payroll accuracy, enhances efficiency by identifying areas of labour waste, and fosters transparency and accountability within the organisation. It also helps prevent data breaches and protects employee information. Administrative staff play a key role in timesheet management, collecting timesheets, entering data into payroll systems, and ensuring compliance with labour regulations. Ultimately, employers bear the overall responsibility for effective timesheet management and compliance with relevant laws and regulations.

Time-tracking software

Timesheets are an essential tool for lawyers to keep track of their work hours and how much to bill their clients. However, time tracking is a significant challenge for many lawyers, and it can be time-consuming and inefficient.

To overcome these challenges, lawyers can use time-tracking software, which offers a more reliable and efficient solution than manual time-tracking methods. This software can automate time-tracking, eliminating the need for manual data entry and instantly connecting billable hour data to invoices. It can also integrate with other systems, such as calendars, tasks, communication logs, and documents, to automatically track work in real-time.

For example, Clio's automated time-tracking software pulls time entries directly from these sources, cutting out the need for lawyers to recall and manually note billable hours. Similarly, Bill4Time offers a solution that combines time tracking with practice management tools to help lawyers effortlessly track their hours and manage their practices.

In addition to automation, time-tracking software offers several benefits over manual methods. It reduces the risk of human error and data loss associated with spreadsheets or paper timesheets. It also saves time for managers, who would otherwise have to remind employees to submit their timesheets, collect them, and forward them to the relevant departments.

Overall, time-tracking software provides a comprehensive solution for lawyers to efficiently and accurately track their time, improve productivity, and maximise their billable hours.

Frequently asked questions