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July 6, 2022

Leading the Way: The Business of Law in 2022 and Beyond – Part 5

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Lead the Way with Automated Timekeeping

About the Leading the Way Series

“Leading the Way: The Business of Law in 2022 and Beyond” from SurePoint Technologies is an eight-part series focused on helping mid-size firms understand their competitive advantage. Throughout the series, we’ll share tips on how forward-thinking firms can thrive now and in the years to come. In the latest post, we’ll look at how law firms can use automated timekeeping to set, communicate, and monitor performance.

Automated Timekeeping: Setting, Communicating, and Monitoring Performance

Recently, a great deal of discussion has focused on legal technology’s role in giving law firms a competitive advantage. In addition to enabling your firm to meet client expectations better, legal technology can also help you attract and retain highly skilled attorneys by ensuring they are more productive and efficient. 

In the following paragraphs, we’ll share how legal tech is enabling and enhancing law firm profitability.

Measuring Profitability

Any thorough analysis of your law firm’s profitability includes a measure of lawyer productivity and performance. The key is turning productivity and performance into revenue. While large firms may focus on slashing expenses to increase profit–cutting jobs, reducing budgets, or eliminating training programs, eliminating costs only goes so far. You still need to drive revenue.

Mid-size firms are in an ideal position to emphasize activities that increase their income. Such activities might include bringing in more clients, getting more business from existing clients, and focusing on high-value work that is less likely to be written off or written down. This is where you can set individual key performance indicators (KPIs) to encourage your lawyers to enhance productivity–and use technology –to ensure your metrics are being properly tracked and billed.

Accurately capturing and invoicing billable time is the main component in increasing your profitability.

Turning Productivity into Revenue

Forward-thinking law firms recognize technology’s vital role in turning productivity into revenue. They do this by setting their metrics and tracking their KPIs. Firm leadership sets expectations, monitors performance, and analyzes trends to determine what works well and needs to be adjusted.

Tracking progress throughout the month enables firm leadership to make informed staffing and operational decisions quickly and efficiently. When law firms use technology to facilitate their processes, they improve productivity and performance. They also obtain more accurate data on which to base decisions.

One of the critical areas highlighting the value of legal technology for law firm staff and clients is automated timekeeping, which affects all aspects of a law firm.

The first step is to document what you know based on reasonable assumptions. Look at which clients you expect to continue working with your firm next year.

Research shows that lawyers who do not record time contemporaneously may lose as much as 25% of their billable time. Automated and contemporaneous timekeeping allows for:

  • Greater accuracy when billing clients
  • Enhanced transparency in legal matters
  • Further metrics to analyze law firm profitability
  • Increased efficiency in record-keeping
  • More meaningful data for law firms to make operational decisions

Tracking Productivity Through Utilization and Realization Rates

When exploring a lawyer’s productivity, a natural first step is reviewing the utilization rate–the KPI that measures how much of the lawyer’s time is spent on work that can be billed to clients. While lawyers spend time on administrative matters, they should aim for as high a utilization rate as possible.

A low utilization rate may indicate that the lawyer is too focused on administrative tasks, not accurately capturing their time, or not effectively using their time.

Benefits of Automated Timekeeping

Law firms that enable automated timekeeping can address all three utilization issues. In addition to having more accurate timekeeping, lawyers who spend less time on manual administrative tasks will have more time for strategic, high-value work.

They will also be much more likely to use their time effectively.

Of course, robust technology can also ensure that billable time is captured and included on the invoice. This means billing is based on more accurate information and your clients receive more transparent invoices.

Following the utilization rate, you may explore the realization rate, which firms typically like to see as close to 100 percent as possible. The realization rate is the proportion of billable hours at standard billing rates to the amount that is actually billed to clients. When the realization rate is low, the firm should consider issues such as work being duplicative or not being billed in a timely fashion and whether the firm’s technology is enabling efficient processes.

Technology increases the realization rate by enhancing documentation and reducing redundancies. It also gives firm leadership information to make operational decisions by accurately showing where and how attorney hours are spent and highlighting which matters or clients are most profitable for the firm.

Problems with Manual Hourly Tracking

Client-centric law firms adopt technology because they see a way to better serve clients by eliminating inaccuracy and increasing transparency.

The traditional method of manually entering billable hours is typically difficult for attorneys, who work on many matters daily. Manual entry requires attorneys to reconstruct their entire day at the end of their work when they’re tired and have a lot on their minds. As a result, incorrectly recalling the day increases–as does the risk that they’ll delay their time entry, causing a further drop in accuracy. The quicker time is entered and billed, the more likely it is to be invoiced accurately.

Agile law firms embrace technology rather than accepting late entry as part of the norm. Robust technology enables firms to capture every minute with minimal effort from the lawyer. Once the lawyer’s time is logged in the system, it’s connected to other processes, such as billing, eliminating the risk of errors entering the system when information is transferred.

Final Thoughts

As clients demand greater transparency into their matters, law firms recognize that technology can help them better communicate their value to their clients and attract a highly qualified workforce. That same technology can also give you better insights into your firm’s performance, productivity, and profitability, enabling you to make better, more informed operational decisions.

Read Earlier Posts in the “Leading the Way” Series

Are You Ready to Lead the Way?

Schedule a demo to learn more about how midsized firms are leading the way, finding their competitive advantage, and unlocking higher performance with SurePoint.

About SurePoint® Technologies

SurePoint® Technologies is the leading provider of award-winning enterprise software that improves workflow and maximizes financial performance and profitability for law firms nationwide. Its distinctive cloud platform integrates client management, practice management, and financial management for powerful relationship-building and knowledge-sharing capability. With a community of more than 100,000 members, SurePoint continues to transform the legal industry by enabling law firms to unlock higher performance, freeing lawyers of administrative burdens so they can spend more time focusing on their clients and their practices. Learn more at