Time is not just money, it’s a quantifiable resource, meticulously recorded and analysed. The accurate tracking of billable hours is often a challenge that, when not handled efficiently, can lead to what we call ‘profit leaks’—the unseen but felt drainage of potential earnings. The solution lies in embracing time recording, which not only restore a firm’s lost profits but also pave the way for a streamlined and profitable future.
The profit leak problem
The concept of ‘profit leaks’ in the legal industry is significant. It’s about those unaccounted hours, such as time spent on a call but not included, or that extra research put into a case just for a client’s peace of mind, unpaid because it wasn’t clocked or billed. Such leaks are hard to measure but can be substantial over time.
Identifying the sources of leakage is crucial for any firm looking to plug these financial drains. The results from our Legal Sector Trends Report have shed some light to the main sources of profit leak with 60% of legal professionals saying missing or inaccurate time entries are their biggest form of profit leak, with an additional 25% saying fee discounts make up the biggest portion.
Suboptimal timekeeping processes and tools are often the culprits. Outdated systems are not just inefficient; they’re costly, both in time and lost revenue. With the right tools, leaders within law firms can analyse discrepancies in time reporting, taking control of their financial destiny.
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