Lawyers spend just 2.9 hours each workday on billable work – that’s only 37% of an 8-hour day. Time is money—especially when it comes to how many billable hours in a year an attorney can accumulate. Using software like Bill4Time can help you avoid these pitfalls.
- I am assuming that Revenue and Gross Margin are obvious components to track.
- Suppose a company’s total labor costs are $100,000, there are $20,000 in overhead costs per employee, and the target profit margin is 20%.
- Sometimes clients may complain if you add non-billable hours to the invoice even though the hours were spent indirectly for the client’s benefit.
- For example, look to the regions with the highest lawyer hourly rates, Washington, D.C., and Delaware, and the lowest rates, West Virginia and Montana.
- (Yea! Go DT!) However, there were only 10 people with more than 168 billable hours.
Why should you track your non-billable hours?
That extra 5 minutes per session adds up to almost an hour of freed time per clinician per day. Over a week, that’s enough time for 5-6 additional sessions per provider. It’s important to understand billable hours vs. actual hours.
Devote More Time to Billable Work
The commonly-held estimate of billable time lies somewhere between percent, which is known as the utilization rate. While that range may seem large (it is) and anything under 80 percent may sound low (it does), non-billables vary by industry, and many tasks deemed non-billables actually help companies grow. Attorneys often round up to the nearest allowable increment to ensure they are compensated for the total time spent on a task. For example, if a task takes 43 minutes, rounding up to the nearest tenth of an hour (0.8) is common practice rather than billing https://europeanparts.co.uk/2023/04/06/7-differences-between-bookkeeping-and-accounting/ for 0.7 hours. If you bill in the standard 6-minute increments, using a billable hours conversion chart like the one below is quite helpful. These charts break down minutes into tenths of an hour, so you can easily convert time to a decimal.
How do you calculate hourly rate?
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. Since 2011, Jayanti’s expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners. Despite everyone’s best intentions, roles like this rarely get firms where they hoped to how many billable hours in a year go. There are simply too many hats and not enough focused expertise. What feels efficient at the start can slow growth and create frustration for both the firm and the employee.
Aim for 65-80% utilization, which leaves room for growth activities while maximizing billable revenue. Consistently high utilization (above 85%) often leads to burnout and team turnover. Petra Pasternak is a writer and editor focused on the ways that technology makes the work of legal Balancing off Accounts professionals better and more productive.
