How Efficient Are You?

Client B: “Partner A spent way too much time drafting this status letter. It is a standard letter that should have taken him at most 0.5 hours to update– not the 0.8 hours that he billed. Writing off 0.3 as inefficient”

Partner A: “Client B seeks my professional legal advice and then second guesses how long it takes me to analyze and respond to an issue. This write down is an affront to my professionalism”

Acuity reviewed representative invoice adjustments across 450 firms performing litigation defense work for the period 1.1.2016 – 12.31.2016 to determine the most frequent reasons for bill adjusts and any patterns that could be ascertained. Based on our review, the top reason for an adjustment was attributed to “excessive or inefficient use of time” by the outside attorney performing the specific task. This was also the topic that drew the most discussion at our recent DRI panel discussion. Why?

We see several reasons for the controversy. First – efficiency is the most subjective of the write-down reasons we observed. What is “excessive time” to one reviewer might be totally appropriate to another. The write-down depended completely on the context of the task in the overall work performed by the firm and the background/perspective of the invoice reviewer noting the write-off. Second – the tasks written down most frequently and for the largest dollar amounts were for analysis, fact investigation, settlement assessment and other tasks usually performed early in the life of a matter. Yet these tasks were in support of early case assessment – an initiative frequently encouraged and supported by legal departments and insurance adjusters. The dichotomy is striking.

What drew the most attention of invoice reviewers? “File review,” “file organization,” “deposition review” and “document prep” by senior associates and partners were favorite targets, as client invoice reviewers noted such activities were better suited to lower-priced staff. Other themes we noted were excessive amounts of time spent on initial case reports and research, with reviewers docking fees where they felt such research was unauthorized or consisted of “reinventing the wheel” – especially where a certain issue had been previously addressed by the same firm on a similar matter or the same matter.

Sample line item write downs were as follows:
hourly-bill-audits-jan-2018-300x202 The Thing We All Like to Hate: Hourly Bill Audits | Take 2

Takeaways here: electronic invoice review makes the analysis of a specific activity and/or a specific timekeeper over multiple invoices and multiple claims much easier. As a lawyer or legal assistant, you should note that lobbing billing entries of 0.2 hours across all your files at the end of the month may raise some eyebrows.

And as mentioned in my previous blog, proactive/ preventive measures that can reduce such write-downs should include a review of draft bills “with client’s eyes” before the invoices are submitted to the client.

Acuity ELM® is a leading enterprise legal management software that will help you streamline your legal operations department with Matter Management, eBilling, Outlook integration, and robust analytic reporting capabilities.

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