The Gazette 1967/71

KNOW WHAT IT COSTS YOU — TIME COSTING

Conveyancing Schedule 2 Probate and administration Company formation E All other non-contentious business or advice F Court business (G—J) Superior Courts Civil litigation Gl Criminal litigation G2 Circuit Court Civil litigation HI Criminal litigation H2 District Court Civil litigation Jl Criminal litigation J2 Non-chargeable time (K—L) Office administration K Other non-chargeable time L For offices which are capable of making a more detailed break-down of work, such an exercise would be useful. For instance it would be useful to establish time-cost figures for registered and unregistered conveyanc ing transactions and for the work of solicitors acting for lessors and lessees where fee depends on the party for whom the business is transacted (half fee in the case of a lessee). 2. Ascertain time-cost factor for each fee earner. NOTE (1) A fee earner is a partner or C D

In the near future a number of solicitors' offices will be invited by the Council to participate in a time-costing exercise. Apart from the benefits which may accrue to the offices the results will be valuable and interesting as a source of information in connection with applications to the various committees which regulate solicitors fees. It is commonplace that in many professions and especially in the solicitors' profession there is a great deal of non-chargeable time. Some jobs must subsidise others in the particular circumstances of professional practice. The question is to determine to what extent particular jobs are remunera tive and which jobs would be better undone or refused if professional practice were dictated by commercial and economic considerations. The accountancy profession is organised on a time costing basis. The larger offices could not survive without such a system because the burden of overheads is so great that the partners must have continual access to information about the profitability of various types of work. Furthermore overhead expenses accrue from week to week and month to month. Delay in collecting fees creates dangerous cash situations and possibly a serious loss under the heading of interest charges. The solicitors' profession is becoming slowly converted to such a system and as amal gamations increase this trend must be accelerated. Experience in the legal and accountancy profession in England has shown that the introduction of time costing systems has resulted in a marked increase in profitability of work based on efficiency. The following is an example of a time costing system which can be used in solicitors' offices. It can be modified to suit the circumstances of the particular practice. 1. Classify and assign a code letter for each type of work e.g. Non-contentious business (A—F) Code letter Conveyancing registered property A Conveyancing unregistered property B

principal, an assistant solicitor or a law clerk of appropriate status and ex perience. Salaries of all other personnel are grouped under general overhead expenses. A notional figure (hereinafter called salary) is calculated for each profit (or loss) sharing principal based on previous experience and ad justed as necessary as a target for the year. Each employee/fee earner has an actual salary. Fee earners' salaries (including principals

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