Billable Hours Best Practices

Overview

Billable hours best practices ensure accurate client billing, protect revenue, maintain professional standards, and provide transparency. Proper time tracking is essential for lawyers, consultants, accountants, and other professionals who bill by the hour.

Core Principles

1. Track Everything

• Record all client work, no matter how small
• Capture time immediately or within same day
• Include emails, calls, research, and thinking time
• Don't rely on memory—use timers or real-time tracking

2. Be Specific

Good: "Reviewed contract sections 3-7 re: liability clauses; drafted memo to client on risks (2.3 hours)" Bad: "Worked on contract (2 hours)"

3. Track in Minimum Increments

• Common: 6-minute (0.1 hour) increments
• Some firms: 15-minute minimums
• Round ethically (not always up)

4. Separate Billable from Non-Billable

Billable:

• Direct client work
• Client communication
• Research for client matter
• Document review and drafting

Non-Billable:

• Administrative tasks
• General learning/CLE
• Business development
• Internal meetings
• Billing and collections

Time Tracking Methods

Real-Time Tracking

• Start timer when beginning client work
• Most accurate method
• Prevents forgotten time
• Tools: Clio, TimeSolv, Harvest

Contemporaneous Notes

• Write down time spent immediately after task
• Include task description
• Still very accurate if done promptly

Reconstruction (Least Preferred)

• End of day, recreate what was done
• Less accurate, not recommended
• Only if no other option

Documentation Standards

Task Descriptions Should Include:

• What: Specific action taken
• Why: Purpose or issue addressed
• Result: Outcome or next steps (optional)

Examples:

• "Telephone conference with opposing counsel re: settlement terms"
• "Research state law on non-compete enforceability; drafted memo"
• "Reviewed and revised contract sections 1-5 per client feedback"

What NOT to Include:

• Excessive detail (invades work product)
• Personal opinions
• Confidential strategy (invoices may be discoverable)
• Vague descriptions

Ethical Considerations

Avoid "Block Billing"

Wrong: "Research, draft motion, call with client, review discovery (8.5 hours)" Right: Separate line items for each task with individual times

Don't Double-Bill

• Can't bill two clients for the same hour
• If working on multiple matters, apportion time fairly
• Be honest about time spent

Don't Bill for Overhead

• Travel time within reason (check firm policy)
• Don't bill for learning basic skills
• Administrative tasks generally non-billable

Value Billing Considerations

• Sometimes appropriate to bill for value, not hours
• Be transparent about billing method
• Get agreement in advance

Maximizing Billable Hours

Work Efficiently, Not Slowly

• Fast work benefits both client and firm
• Don't pad hours
• Use templates and precedents
• Automate repetitive tasks

Minimize Non-Billable Time

• Batch administrative work
• Efficient internal communications
• Focus on revenue-generating activities
• Delegate non-billable tasks when possible

Capture All Legitimate Time

• Quick email responses add up
• Phone calls count
• Thinking about client matter is billable
• Travel time (check policies)

Client Communication

Invoice Clarity

• Clear, specific task descriptions
• Logical grouping of related tasks
• Chronological order
• Consistent terminology

Transparency

• Share time tracking with clients (if requested)
• Explain billing practices upfront
• Provide regular updates on hours spent
• Address concerns promptly

Budget Management

• Track against estimates/budgets
• Alert clients before exceeding budget
• Explain variances
• Offer alternatives if over budget

Technology Solutions

Legal-Specific

• Clio
• MyCase
• PracticePanther
• TimeSolv

General Professional Services

• Harvest
• FreshBooks
• QuickBooks Time
• Toggl Track

Features to Look For

• Matter/project organization
• Billable rate support
• Invoice generation
• Expense tracking
• Client portals
• Trust accounting (legal)

Common Mistakes

Writing Off Too Much Time

• Underestimating value provided
• Fear of client objection
• Track everything, then decide what to bill

Inconsistent Tracking

• Some days tracked, others not
• Results in lost revenue
• Unprofessional

Vague Descriptions

• "Misc. work on case"
• Invites client questions
• Looks unprofessional

Not Tracking Small Tasks

• 5-minute emails add up
• Probably losing 10-20% of billable time

Benchmarks

Typical Billable Hour Targets (Annual)

• Law firms: 1,800-2,200 billable hours
• Consulting: 1,500-2,000 billable hours
• Accounting: 1,200-1,800 billable hours

Realization Rates

• Hours Worked: Total time spent
• Hours Billed: What appears on invoice
• Hours Collected: What client actually pays
• Target: 85-95% realization

Continuous Improvement

• Review write-offs monthly
• Identify patterns in uncollected time
• Improve time estimates
• Refine task descriptions
• Update billing rates annually
• Invest in better tools
• Train staff on best practices