“Time is what we want most, but what we use worst”

In this blog, we’re going to discuss the different aspects of time for Law Firms. Mainly the time spent is classified into 5 different types. These are as follows:

1. Billable Hours
2. Non-Billable Hours
3. Billed Hours
4. Un-Billed Hours
5. Not to be billed (Or Don’t Bill)

We know it’s confusing, and most of this sounds similar.

But, with this article, our intention would be to make it clear to you in a simpler way.

The Timesheet Data

Before getting into the details, let’s prepare some data to understand it better.
Consider, Mr. Will is an associate, and the details of time spent by him on any matter are as follows:

#	Matter #	Date	Resource	Billable Hrs	Non Billable Hrs	Narration	Billed	Invoice No	Don’t Bill
1	M-001	01-Jun-2022	Will Smith	03:00	0:00	Drafting of SHA	Yes	001/22-23	–
2	M-001	02-Jun-2022	Will Smith	0:00	1:00	Research	N\A	–	–
3	M-001	03-Jun-2022	Will Smith	4:00	1:00	Court Appearance	No	–	–
4	M-001	04-Jun-2022	Will Smith	3:30	0:00	Drafting of Agg.	No	–	Yes

Record #1, corresponds to Billable and Billed
Record #2, corresponds to Non-Billable Hours
Record #3, corresponds to Billable but Un-Billed (Yet to be billed)
Record #4, corresponds to Not to be billed (Marked as Don’t Bill)

We’re all set to understand the subject. So, let’s discuss it in detail:

1. Billable Hours:
   In simple terms, it’s the hours of work that your firm can bill directly to the client.
   Billable hours include:
   • Working on a client’s projects
   • Communicating with them
   • Editing your work for them

   Why do companies need to track billed hours?

   • It helps you figure out how much to charge your customers.
   • Knowing how long it takes you to meet the deadline can help you set an hourly rate.
   • It also allows you to plan and run a long-term business.
2. Non-Billable Hours
   Non-billable hours are the hours spent on work that cannot be billed or expensed to a client. They are typically tasked with a wide range of internal duties.
   Non-Billable hours may include:
   • Bids, proposals, and pitches for new business,
   • Meetings with your team,
   • Staff development/training
   • Networking and attending conferences
   • Entertaining clients
   • Business development, strategy, and research
   • Operational activities.

   You must be thinking, “Why do the companies need to track non-billable hours?”
   
   Well, Well!!
   
   Tracking the non-billable hours could answer the following questions for you:

   • What percentage of your company’s time is spent on research and development?
   • Do your employees believe they have permission to read industry news during business hours, or do they believe they have adequate time to develop their knowledge?
   • Are you effectively managing and allocating your time?

   TBH, Time spent on non-billable operations indicates that it is just as valuable as time spent on billable tasks. By attaining better insight of how you use time in general, you might identify areas where you are wasting it and where you might improve its quality.

3. Billed Hour:
   Billed hours are the hours that have been invoiced/ billed to the. It’s mostly the billable hours recorded by the firm.
4. Unbilled Hour:
   Unbilled hours are time entries that are not billed or belong to some draft invoice. This covers all billable hours that are yet to be billed.
5. Not to be billed (Don’t Bill):
   These are mostly billable hours that are rationalized during the billing process and decided either by the client or the firm not to bill.

Hoping that now you have a clear understanding of the aspects of time and its importance for your law firm.
Whether it is billable, non-billable, billed or not to be billed, TIME is the most valuable asset that each one of us as individuals’ investors in our daily life. The wiser you invest the higher you soar.

“Time has a wonderful way of showing what really matters “