How to Track Billable Hours as a Solo Attorney or Small Firm

DEFINITION

Billable hour

Time spent on client work that can be charged to the client. The unit of billing in hourly-rate legal work, typically recorded in 6-minute (0.1 hour) increments in the United States.

DEFINITION

Realization rate

The percentage of recorded billable time that is actually billed and collected. Calculated as (fees collected / fees recorded) × 100. Industry average for small firms is 75-85%.

DEFINITION

Write-off

Time recorded but not billed, or billed but not collected, that the attorney decides to forgo. Write-offs reduce realization rate and net revenue. Tracking write-offs by client and matter type is essential for pricing and collections management.

Why Time Tracking Matters

For firms that bill by the hour, time tracking is the direct link between your work and your revenue. Every hour you fail to record is an hour you worked for free. Every vague time entry is an invitation for a client to dispute your bill.

Even flat-fee firms benefit from tracking time internally. Without time data, you have no way to know whether your flat fees are actually profitable.

Step 1: Choose a Tracking Method

Real-time timers are the most accurate method. You start a timer when you begin a task and stop it when you finish. Most practice management software includes timers that you can start from your desktop or phone.

Contemporaneous entry means logging time immediately after you finish a task. It is nearly as accurate as timers and works better for attorneys who find timers distracting.

End-of-day reconstruction is the most common method and the least accurate. You sit down at the end of the day and try to remember what you did. Studies show this method consistently results in under-billing.

Step 2: Set Up Time Entries

Before you start tracking, configure your system. Set your billing rates for each attorney and matter type. Create activity codes for your common tasks. Set your billing increment. This upfront setup takes 15-30 minutes and saves hours of data entry over the life of the firm.

Step 3: Establish Daily Tracking Habits

Consistency matters more than the specific method you choose. An attorney who tracks time at end-of-day every single day will capture more revenue than one who uses timers sporadically and forgets to track on busy days.

Pick a method. Stick with it. Set a daily reminder if you need one.

Step 4: Review and Edit Before Billing

Never send an invoice without reviewing the underlying time entries. Vague descriptions like “work on case” or “phone call” frustrate clients and invite disputes. Change them to specific descriptions: “Draft motion to compel discovery responses” or “Phone call with opposing counsel re: deposition scheduling.”

Step 5: Generate Invoices from Tracked Time

Your practice management software should let you convert approved time entries directly into client invoices. This single-system approach eliminates the errors that come from copying time data between separate tracking and billing tools.