The Gazette 1984

SEPTEMBER 1984

GAZETTE

Perhaps you complain about the level of fees fixed by third parties. With a proper time costingsystem you could provide information which would help the Law Society Professional Remuneration Committee who have to persuade those who fix tables for court fees and legal aid fees, etc., that the fees currently chargeable are not realistic in relation to actual costs or a reasonable return to the partners — although I do not personally believe such tables of fees can ever be fair and reasonable to solicitor and client in individual cases. Before I try to define time costing I should say that the handling of the time records and the time costing operation can be carried out manually or electronically — it is more laborious manually and because of labour costs it is unlikely that a manual system would be able to give you the more sophisticated management information that will be available in a computerised system. With the relative cost of computers coming down and more time recording packages being available for lawyers, 1 would recommend a computer system but I cannot within this article discuss the merits of different computer systems. The Society for Computers and Law of which I am presently the Chairman, from time to time runs Workshop Seminars on the use of computers in the office, including their use for time costing. The systems which I am to describe do not require computers but the characteristics of what I am to describe must be in any system that you might decide to put in. Time recording The basis of time costing is of course time recording. Without well kept and accurate records of the time spent on a matter you cannot fix the time cost. For time recording I think that there are two basic essentials. The first is that you must provide a means whereby the solicitor or other fee earner can record all the time he has spent on chargeable work for clients. Normally he completes a form as he goes along, although there are on the market electronic methods of doing this. The form can be a daily time sheet or a weekly sheet. 1 prefer a daily time sheet as I believe that it is easier to keep and process the records on a daily basis. The second essential is that the time recorded on a daily time sheet in respect of each matter should be transferred regularly to a time ledger for that matter so that at any point of time you can tell how much time has been spent on that matter and by whom. However, when you get down to making a time recording system work, there are a number of questions that have to be answered and 1 shall try to look at some of them. For example: / What do we do with time that is not chargeable? I believe that all time must be recorded — basically because 1 do not believe that you can record all your chargeable time properly unless you also record other time. It may also be relevant to know how much time someone is spending in your office on administration, business development, that favourite charity, that Law Society committee, etc. 2 Who should keep time records? All fee earners — that is, partners and members of the staff who perform legal work directly chargeable to specific clients — normally not typists, cashiers or receptionists, although a good secretary or personal assistant might well be operating in such a way that some of his or her time would be chargeable and therefore he or she should record his or

her time. 3 What should be the unit of time? In other words, do you record your time in units of 1 minute, 5 minutes, 15 minutes or half an hour? The nature of the lawyer's practice is such that he tends to deal with a large number of different items for different clients in the course of a day and therefore the shorter the minimum period is the better. The ideal is probably 1 minute, that is the time recorded for any evenf is to the nearest minute. Five minutes or 6 minutes is probably more practicable. Experience has shown that if a letter has to be done by a fee earner the minimum time that he will take is probably about 5 minutes if you include, for example, time spent looking at the letter to be replied to, thinking time, dictating time and eventually reading and signing time — if it takes less time he probably should not be doing it. 4 Do H i' need to record what has been done in the time? It is not essential for time costing as such but probably some record of what has been done is desirable. This can be done simply by a series of activity codes such as i. for letter, A for attendance at a meeting, IT for incoming telephone call, R for research, RD for revising drafts, etc. You may also want to have a record of what was said or agreed on the telephone or at a meeting, but that will probably best be recorded separately and placed on the file — although there are systems which enable you to do both. 5 How do you identify matters? It is probably essential that you have an integrated filing, time recording and financial accounting system so that each matter has a unique number used at every point. Provided you have a handy list of the numbers for the various client matters you are dealing with it is easy to identify the client matter on your daily timesheet by its number which can be either alpha-numeric or simply numeric — if not, a description of the matter may be sufficient. 6 Do you record time spent on researching the law? Yes. 11 is of course a fallacy that we know all the law, and anyway the purpose of the exercise is to find out the cost of carrying out a particular piece of work and if that involves time poring over books, etc., record it. Similarly, you must record time spent picking your trainee's brains about the current law, time spent travelling to and from a client's office, etc. 7 Does it take long to keep time records? The answer must be 'no' provided you have set up a well-planned system which cuts to a minimum the extent of the entries which have to be made by the fee earners. Time recording requires discipline, and like all discipline it is initially painful, but a well-planned system makes the acquiring of the discipline easier. The real secret of keeping good time records is to record as you go along but also to spend about two minutes four times a day at equally spaced intervals balancing the books so that, for example, at about 10.30 you check the time so far recorded, decide how the balance of time has been spent and then record it. The same exercise should be done before lunch, in the middle of the afternoon and before you leave at night. I know from long experience that this is the only way to do it properly. In other words, if you do it as you go along and have these periodic checks the time taken by a fee earner is minimal. The time recorded will of course have to be processed either manually or by being put into a computer, but this is not fee earner time.

8 How do we deal with time outside normal office hours? 11 must all be recorded against specific matters as the object

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