Monday, February 15th, 2016
By Gideon Grunfeld
Leaders of firms that charge by the hour often complain that they can’t get their lawyers to submit their hours on time. This, in turn, causes the firm to delay when it sends out some of its invoices, and it may play a role in causing some lawyers to underreport hours. Here are five strategies to address this problem.
1. Define the timely submission of hours as a primary attorney responsibility.
Many law firms set billable hours targets, but relatively few explicitly connect the total number of hours with their timely submission. Too many lawyers view the process of doing the work independently from billing it. But in many cases the work performed by a lawyer at a law firm is converted into dollars only when the time is submitted. The act of submitting time converts the labor into something of economic value. Thus, it’ not a separate administrative step can that be postponed. Law firm leaders should make clear that failing to submit hours on a timely basis will to some extent be treated as if it wasn’t performed in the first instance.
2. Make lawyers aware of the chain of custody for invoicing.
Some lawyers aren’t aware that the process of submitting time impacts other people at their firm. If you are looking to motivate seemingly recalcitrant lawyers, avoid using threats as a first response. Lawyers have an independent streak and often don’t respond well to hostile-sounding messages. Research in a variety of fields has shown that people are more likely to be cooperative when they view their conduct as directly impacting other people who are likeable. This is why charities tend to raise more money when they show potential donors concrete examples of how their contributions will be used on behalf of sympathetic people. Thus, it might be helpful if lawyers met and got to know the people in accounting or others who are part of the billing and invoicing process. Lawyers are less likely to submit timesheets late if they know the person in accounting who will be inconvenienced and better yet the manner in which they will be inconvenienced.
3. Don’t just use a stick.
Too often law firms rely on increasingly coercive measures and harsh messages to try to force certain lawyers to submit hours on time. This is particularly problematic with salaried associates whose base pay can’t be withheld or reduced until the hours are submitted. Consider creating a reward or prize that is only available to lawyers who have submitted time sheets on time every month over the course of six months or 11 months out of the last 12.
4. Use discrete peer pressure.
In my experience as a large law firm litigator and as a consultant, I have seen first-hand that peer pressure can be a strong motivator for lawyers. For example, it can be useful to send a message letting three lawyers know that that everyone else but them has already submitted the prior month’s hours. The lawyers should receive individualized messages and the identity of the other tardy lawyers should not be disclosed to them. Letting them know that this is being handled discretely will often make them more cooperative.
5. Keep shortening the deadlines.
Different law firms establish different deadlines for when lawyers need to submit their hours. Essentially all require that time be submitted on a monthly basis. Others require that all time be entered into the system weekly, and a relatively few firms require daily submission of time. Generally speaking, lawyers bill more accurately when they minimize how much time elapses between when they performed the work and when they write it down for the first time. Thus, all things being equal, firms should strive to encourage lawyers to bill time on as short a timeframe as practicable. The easiest way to do this is to shorten the deadlines gradually. New lawyers will get used to whatever deadlines you establish, and most lawyers will adjust to shorter timeframes if firm leaders address this issue consistently.
And as with many aspects of managing a law firm, the ultimate power rests with the clients. Sophisticated institutional clients have their own reasons for not wanting to wait to the end of the billing cycle to see how many hours their outside counsel are billing. Law firms should therefore expect that some of their clients will want more transparency in hourly billing, including wanting to see daily billable hourly totals for attorneys working on their matters. Simply put, in today’s market for legal services, it is increasingly untenable for law firm attorneys to delay when they submit their hours.