Excel spreadsheet for monthly expenses paralegal
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In other words, if a paralegal leaves a couple of hours early for a doctor’s appointment, they might only work 6 hours, but they use 2 hours of PTO and are paid for 8 hours that day. You can measure this by dividing hours billed into hours worked (not paid hours, just worked hours). Paralegal productivity is the percentage of time spent on billable work compared to the total hours worked (not paid). 1,200 hours x $150/hour = $180,000 gain in revenue from reduced write-offs.Looking at our group of 20 paralegals again, let’s assume they’re at approximately 90% realization, and you could decrease just a. Taking longer than necessary to complete a task or project.Ĭase Study Example 2 – Increase in Paralegal Realization.The billing partner needs to do general reductions in the overall bill at the request of the client or to keep the client happy.The timekeeper not adequately describing the work that was done, so the billing partner writes off some of the time.Things that could be reducing paralegal realization rates include: For example, if $2,000 worth of time is recorded in the billing system, but $500 of that time is later written down by the billing partner, and the client is billed $1,500, then the realization rate on that paralegal’s time is 75%. Paralegal realization is the percentage of recorded time that ends up staying on the bill versus the amount that was entered into the billing system.
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This is why all three of these numbers are factors that need to be addressed when you are trying to increase paralegal profitability. If someone is billing more hours than normal to complete a project just for the sake of trying to increase their billable hours, then there will be a hit to the remaining key drivers: realization and productivity. You’re just asking them not to lose any of the billable work that they’re already doing.īillable hours don’t tell the whole story. And the great thing about this one method is that you don’t even have to ask them to do more work than they’re already doing. 2,640 hours x $150/hour = $396,000 gain in revenue if they don’t wait until the end of the day.Īs a manager or legal administrator, even if your firm has a weekly or monthly timekeeping deadline, ask your paralegals to input their time while they are doing the work, and you will see an increase in paralegal utilization numbers from all that lost time.20 paralegals x 132 = 2,640 total hours.Here’s what you could gain with a group of 20 paralegals who go from entering their time at the end of the day to entering their time contemporaneous with the work: This results in 10% being lost due to all the administrative time spent.Ĭase Study Example 1 – Increase in Paralegal Utilization
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Either that or the timekeeper spends so much time jotting down all of the detail and then more time entering it into the billing system. When they go to enter that time, they cut a.
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1 response to an email start adding up throughout the day and especially throughout the week or month.Įven if the timekeeper is “jotting down notes” about their billable time, there’s usually not enough detail. Where does this lost time go? It gets forgotten. These timekeepers might be following the firm’s policies, but the firm is losing billable time with a weekly time entry deadline. And we know that’s a “best-case scenario” because most firms have a weekly time entry deadline that requires their timekeepers to have all their time from the previous week entered into the system and finalized. Imagine if you have 20 paralegals waiting until the end of the day to enter their time. If they wait until the end of the week, they lose approximately 4 hours.Īnd if they wait until the end of the month, they lose approximately 15 hours. If they wait until the end of the day, they lose approximately 10% of their time. Studies show that the longer a timekeeper waits to enter their time, the more time they lose. Imagine what any law firm, regardless of the size of the firm, could do with an extra million dollars per year!Īnd definitely not waiting until the end of the month. What usually gets overlooked is that million-dollar gap between what could have been brought in. At first glance, it still doesn’t sound so bad because the group brought in over 3 million dollars. So, the revenue number looks more like $3,500,000 (or less) instead of $4,500,000. Then some of those hours are written off by the billing partner or not paid by the client. The problem is that the paralegal billable hours usually look more like this:ġ0 of the paralegals are at 80% or less utilization = 1,200 hours each (3,000 hours less than budgeted)Ĩ of the paralegals are at 90% or less utilization = 1,350 hours each (1200 hours less than budgeted)Īnd the remaining 2 of the 20 paralegals at 100% or more utilization = 1,500 hours each Look at an example of a law firm with 20 paralegals:Ģ0 paralegals x $150 average bill rate x 1,500 hours per year = $4,500,000 in potential revenue.