The success of your law firm depends on more than your attorneys’ legal knowledge—to achieve consistent growth and profitability for your practice, you also need the insight to make sound business decisions.
The key to gaining this insight? Monthly reporting.
By shedding light on where your team’s time is spent and what expenses your firm is incurring, time and expense reports can help you identify potential issues with your firm’s time tracking, workload management, and spending.
Knowing what’s working for your practice (and what isn’t) can help your attorneys better manage their time and help your whole firm better manage its budget and achieve its short- and long-term goals.
Time and expense reports
Careful management of time and expenses can be the difference between a law firm that’s profitable and one that struggles to cover its overheads. Each of the following reports can help you better track and manage your law firm’s hours and expenditures.
Time entry and time summary
These simple but important reports give you a bird’s eye view of where your firm’s billable hours are going.
- A basic time entry report will give you a list of time entries grouped by client and matter
- A time summary report will break down weekly and monthly time entry totals by client, matter, and team member
Both of these reports can help you better assess how your current hours are divided between matters and clients, and they may help you identify the matters that are consistently taking too long to complete.
Missing time
A missing time report will show you the hours missed by each of your timekeepers by day or by week—this can give you important insights into your legal teams’ productivity and help you foster a culture of accountability.
For example, you may notice that one of your attorneys is missing several hours each week. This could be a sign of poor time tracking on their part, or it might mean that they simply aren’t putting in a full day’s work consistently.
Either way, your law firm will want to be aware of the issue so they can respond accordingly.
Billable vs. non-billable hours
Most law firms have minimum requirements for billable hours worked by their attorneys. Ideally, your attorneys should be spending as much of their workday on billable work as possible.
The daily administrative tasks involved in practicing law mean that no attorney will ever be able to bill for 100% of what they do each day—but spending too much time on non-billable work can have a significant impact on your law firm’s profitability.
Running regular reports on billable vs. non-billable hours can help your firm assess which attorneys spend too much of their day on administrative tasks. It also allows you to take proactive steps to clear up these attorneys’ schedules (for example, by shifting some of these tasks to your administrative staff).
Time budget
Proper time budgeting can be critical to ensuring profitability for your matters, especially when offering fixed fees and other alternative fee arrangements. If your attorneys are billing clients at a flat rate but exceeding their allotted hours, you may be losing much of your firm’s profit margin.
Consistently going over your time budget for matters can also throw a wrench into your matter timelines, result in missed deadlines, and limit the number of new matters your firm can take on.
A time budget report allows your firm to compare how worked hours stack up against your budgeted time for a matter, so you can avoid these issues and ensure that your attorneys are respecting the time budget allotted for their matters.
Expense entries
Accurately tracking your expenses is just as important to your firm’s success as tracking your billable hours.
Expense entry reports sort expense entries by client and matter. These reports give you a big-picture view of matter-related expenses and can help your firm set more profitable rates and spot unbilled expenses.
Other useful reports
When it comes to building a profitable, data-driven law firm, time tracking and expense reports are only one piece of the puzzle. You’ll also want to run reports to understand your realization and collections rates, overall financial performance, and more.
Realization and collections
Ideal time tracking and budgeting practices will only help your firm if you’re actually invoicing (and collecting payment) for those hours. Regular realization rate reports can help you compare billable vs. billed time by client, invoice, or timekeeper—so you can spot unbilled hours and take steps to bill more accurately (or to reduce excessive write-offs).
Similarly, collections reports can help you assess your collections rates on the invoices you send out. If you find that this rate is less than ideal, running regular reports can help you spot common patterns behind unpaid invoices.
Firm performance reports
If you’re looking to assess the overall financial health and performance of your firm, a firm performance report is where it all comes together.
With a comprehensive breakdown of active clients, hours, expenses, payments, and accounts receivable, these reports make it easy to get a big picture view of your firm’s current business and financial standing. Taking the time to consider these figures each month is a great way to make informed, data-driven decisions for your law firm’s future as a business.
Better reporting with TimeSolv
These are only some of the many useful reports law firms can use to better understand their business. That’s why TimeSolv’s time tracking and billing software includes robust reporting functionalities, including 31 different reports covering:
- Time and expense tracking
- Invoices, payments, and trusts
- Budgeting
- Firm Performance
- Accounts receivable
- And more
To find out how TimeSolve can help your law firm boost profits through better reporting, sign up for a free trial today.
