One of the most significant areas where profits can leak is through missing and incorrect time entries. On average, fee earners fail to record 222 billable hours each year, a substantial loss when translated into potential revenue. However, with the advent of time capture technology, firms now have a powerful tool at their disposal to reclaim these lost hours and, by extension, bolster their bottom line.
The profit challenge
The financial health of a law firm hinges on its ability to accurately capture and bill for the time spent on client work. Unfortunately, the traditional methods of time recording are fraught with challenges. Fee earners might forget to log a phone call, overlook an email exchange, or underestimate the time spent on drafting documents. These omissions and inaccuracies can lead to a significant underreporting of billable hours.
In our Legal Sector Trends Report 2024 you told us that missing and inaccurate time entries make up the biggest forms of profit leak at 60%. Furthermore, firms typically collect only 89% of invoiced amounts due to disputes over charges, further exacerbating their profit challenges.
The source of the pain
The implications of missing and incorrect time entries extend beyond just financial losses. They also affect a firm’s credibility and client relationships. Clients demand transparency and accuracy in billing, and any discrepancies can lead to disputes and erode trust. Additionally, when fee earners are continually catching up on time recording, it not only leads to errors, but it also detracts from their ability to focus on high-value work, creating a cycle of inefficiency and lost revenue.
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