Billable Time You Didn’t Even Know You Had

News about the economy for the past 12+ months has been grim: all sorts of businesses are cutting costs and cutting human resources. For lawyers, used to always being needed (even if not always wanted), the harsh layoffs have been particularly brutal.

Chicago-based Katten Muchin Rosenman announced on March 19, 2009 that has laid-off 23 lawyers; the firm is taking steps to avoid further layoffs by cutting the base salaries of associates who failed to come within 200 hours of their 2008 targets (and will reinstate salaries for those who meet their targets this year).

Is it counter-intuitive to think that, instead of reducing workforce, or even work hours, you should be thinking about billing more hours?

We’re not talking about raising rates. As pointed out by Ronald Beard, a consultant with The Zeughauser Group. In the Feb 24, 2009 issue of the National Law Journal, for the last six or seven years, rates have been the drivers of revenue growth for most firms, and rates are going to be under incredible pressure this year.” We agree with that statement.

He went on to say “by definition…revenue is going to drop…” We respectfully disagree.

Why? It doesn’t have to; there is plenty of work to be done, even in this economy. The question is: Are you making sure that you are charging for all of your client-related work hours?

Research shows that attorneys and other billing professionals are routinely forgetting to bill 10%-15%+ of their client-service time. This results in lost revenue of $10,000, or more, per year per professional! With no change in billing rates, capturing this lost revenue could be the difference between firm profitability (and maybe even some partner “profits” at the end of the year) and firm melt-down. And, even if you are considering lowering your SBR, you won’t lose profitability if you are able to bill for all of your work time.

There is no doubt that our new mode of working, with constant multi-tasking, results in easily losing sight of 15-20 minutes of billable time on a daily basis. And, if you focus on capturing more billable time as much as on cutting costs you’ll have a better chance of surviving, and thriving, through the current economic storm. Some suggestions for doing so:

• Discipline yourself to write down everything you do, and be precise in logging your time. Billing transparency is also important—clients are going to grill you on this, too, so be prepared! To be effective, time reporting has to be done at least daily (and more frequently is even better), because studies show that even waiting to the next workday morning to record the prior day’s activities results in a loss of 15% or more of billable time; and waiting to the end of the week, or month, further erodes ones billable time.
• Use a time-tracking software program to track and report your time. There are a number of programs on the market. Find one which suits your style, and, preferably, doesn’t require a lot of technical savvy and is easy to use. Make sure that the software you select is something you will use: consistency of use trumps sophistication. The less the system interferes with your work flow, or with your “real” work, and the less it requires you to change your work habits, the more likely you are to use it. This will improve your billable hours, and your firm’s profitability.

In this economic environment, at some point continued cost-cutting can be counter-productive and can suck out the richest marrow; all professionals need to get better at reporting and billing for the hours that they are working, right now.

By Cecily Drucker
CEO Bottom Line Time
www.monetasuite.com

A 64 year old “Virgin” Muses on the Start-Up Experience

Got a good idea? Have the guts to go for it? I enthusiastically encourage you to just do it! Some thoughts to make it a bit easier (I hope).

The good idea? Start with the end in sight—be a solution to an existing problem, not a solution in search of a problem. The existing problem we solved was how to give high-value workers the ability to track and report work-task time without any change in their work habits, and without involving any additional “steps.” I knew from my own experience as a lawyer that I was losing at least $20,000/yr. of billable time because I wasn’t able to effectively track and report my email activities; I figured that if I had that problem, others did too, and verified this with anecdotal inquiries among my colleagues.

With the good idea in mind (and a preliminary patent application), and not knowing any better (a benefit, sometimes), I just ‘dove in’. A year later we are ready to launch our flagship product, and are working to fully deploy our first product line, and are strategizing about other complementary business solutions.

How Did I Do It? In a nutshell, just kept ’showing up’ and moving forward. There were lots of stressful, anxiety-ridden days & nights, but the result has been well worth the effort.

Some things I learned:

1. Embrace the ‘fertile void’ of sleepless nights. Lots of creativity can occur then.
2. Surround yourself with enthusiastic, talented, experienced & committed people, then delegate and get out of their way. I have been fortunate in finding a cofounder who understands what it takes to start and grow a technology company. Stay ‘informed’ but don’t interfere unless mission-critical. Act quickly to remove anyone whose intellectual capabilities and commitment you don’t trust; you cannot waste time.
3. Get rid of self-doubts. As you go through the process, you may have self-doubts (if you don’t, then you need a reality-check!). Some of these may be ‘real’, some may just be your own mind-games. Others in your team also will have them. It is essential that the realistic concerns be articulated, quickly countered by solutions-oriented thinking—not denial, but awareness and immediate “course corrections.” This requires flexibility as well as honesty.
4. Once you’ve invested your money, it is a company asset, and it no longer is ‘yours’. Stop worrying about getting it back, or calculating your return. Don’t allow your core team to defer to you to make decisions about how to spend it, just because you’ve invested the cash.
5. Cash is king. Especially now: invest in what you need to, and be parsimonious. See suggestions about preserving and stretching your funds in “What To Do If Your Startup Is Failing” by Jason Calcanis. Although you may not be in that position, the advice about preserving cash (as well as other ways to steel yourself in this environment) are helpful.
   http://www.businessweek.com/smallbiz/content/mar2009/sb2009032.288933.htm
6. Don’t get ‘feature-it’s. Start with the most elegant, simple outcome. Don’t “jump” to address every new requested feature someone asks for. Solve the problem you set out to solve, or intentionally change course.
7. Acknowledge everyone’s contributions. Your entire team is ‘making a bet’, and probably doing so with significant personal risk. They are doing the heavy-lifting; make sure that you, and your Board and your Advisors know who they are, and express appreciation in whatever ways you can afford (bonuses, a massage [or nice restaurant] gift certificate, stock options, etc.) It doesn’t have to be costly, just be sure that it shows some thought.
8. Don’t forget to savour these moments. Without a doubt, this has been the most exciting year of my life.
9. Don’t stop having a life! Engage in physical activities you enjoy, regularly, and get a regular massage, to get ‘out of your head.’ Have a “personal life” with your spouse, partner, kids, pets and friends—they may not always understand you, but they will continue to love and support you.
10. Keep your sense of humor. This is not in a “life-threatening” situation. Step back, laugh at yourself, make jokes, and re-focus.
11. Dream About Your Future. Envision what your business success will “look” like, and also think about your next gig. We are going to start an ‘angel’ fund to support other entrepreneurs who have a great idea, are committed and are passionate—we want you all to also experience what Vinod Khosla calls the “roller coaster” of entrepreneurial activity; I wouldn’t have missed it for the world.
12. Look to the Market to Validate Your Ideas, and Adapt When Necessary. We have spent a lot of time with potential customers, interviewing them, picking their brains, getting their feedback about our product.
13. Be Persistent But Flexible. No great idea gets launched without a vision (and a visionary), but hubris has brought many down to. Try to strike a balance between the stamina and drive necessary to succeed, and the flexibility to change when the market (see #12 above) tells us we should.

I’d love to learn what new idea you are thinking about pursuing and how I can help you. Contact me at cecily.drucker@monetasuite.com—I am not as wise as my famous father in dispensing management advice, but you cannot get his feedback anymore, and I’m a pretty good ’second chair.’ Good luck!

By Cecily Drucker
CEO Bottom Line Time
www.monetasuite.com