Ari Brojde, CEO of Estateably.com
Billable hours constitute a steadfast tradition in the legal industry. But increasingly they also represent a point of contention. That’s because, paradoxically enough, greater inefficiency can equate to higher billings, and thus more revenue. It’s a growing debate, pitting billable hours against non-billable hours.
As billable hours drive profits, important administrative tasks, like timekeeping, client intake, errands, invoicing, or even office management, tend not to be billed back to clients. Yet, these repetitive tasks can chew up vast amounts of time and, in some cases, the majority of a legal professional’s time.
The 2022 Legal Trends Report found the average American lawyer performed just 2.6 hours of billable work each day, highlighting the amount of time and effort legal professionals put into non-revenue generating activities.
In specialized areas, time spent on non-billable hours can climb even higher. Take, for example, trust and estate legal professionals. They can deal with mountains of paperwork from filling out a variety of probate forms to dealing with tedious accounting-related files.
How can legal professionals increase productivity on billable hours while mitigating the losses of non-revenue generating activities?
Forward-thinking attorneys and their firms are starting to ride the same wave of digital transformation that has already swept across other industries.
They are increasingly adopting technology to focus on maximizing billable value while saving time and recouping costs associated with non-billable hours. They see the advent of legal technology as a means of ushering in a new era of efficiency, productivity, and profitability.
Through our work with thousands of legal professionals, there is a noticeable change taking place in the billing mindset. Here are three ways technology is changing the traditional billing paradigm:
Saving Non-Billable Time
Time spent by lawyers, law clerks, paralegals, and legal assistants on administrative tasks is being driven down considerably by technology. Gone are the days of typing names and addresses over and over again. Lowering the amount of time legal professionals spend on manual processes gives them more time spent on value-added counsel and, in turn, billable hours. Technology is playing a big role in automating repetitive tasks, resulting in saving non-billable hours and getting lawyers back to doing the legal work they love with their clients.
Leveraging generative AI also brings a higher level of accuracy to the legal profession. For example, specialists in estate administration have to contend with complex nuances of individual plans amidst the great wealth transfer, which requires accuracy and precision to reduce the possibility of errors that might end up in a courtroom. AI can generate state and court-compliant documents and compile financial reports with a single click.
Passing Costs to Clients
Historically, legal tech software solutions have adopted one of two main pricing models: a flat monthly or annual fee and a per-user fee. At Estateably, we recognized early on that there was a growing need for a third-tier pricing model.
Unlike conventional software subscriptions or licenses, where users might pay a flat monthly or annual fee, we developed a pricing model that charges based on usage or per file. This enables software costs to be passed back as an expense to the estate account in a transparent and value-added manner. We’re seeing more lawyers, accountants, and financial advisors look for services that increase productivity and keep expenses in check.
Better Work-Life Balance
Attorneys surveyed for Bloomberg Law’s Attorney Workload and Hours survey in the fourth quarter of 2021 reported experiencing burnout more than half (52%) of the time. A separate study showed the biggest sources of burnout were an unmanageable caseload (57%) and work/life balance (42%).
Legal professionals are taking advantage of the latest innovations in automation and AI to reduce their workloads and free up time for more fulfillment outside of the office. Firms have also built strong, cloud-based virtual capabilities to allow employees to have more flexibility and collaborate with clients through new online tools.
Technology’s integration into the legal industry delivers enhanced efficiency, a new approach to billing, and a reimagined work culture. As administrative burdens lighten, law firms and professionals can find news to boost profitability. Advanced technology can save attorneys non-billable time, reduce expenses, and improve work-life balance.
