1. Why is time recording so important? Peter Scott Peter Scott Consulting www.peterscottconsult.co.uk

2. PETER SCOTT CONSULTING Terminology Matter related time √ Not chargeable time X

3. PETER SCOTT CONSULTING “Recording time is not relevant to our business” A conveyancer

4. PETER SCOTT CONSULTING Recording time is relevant to EVERY part of a law firm’s business

5. PETER SCOTT CONSULTING The importance of matter related time A major profitability factor An important management tool

6. PETER SCOTT CONSULTING A major profitability factor

7. PETER SCOTT CONSULTING Profit = difference between revenue and overheads If your overheads can be kept constant, then all additional revenue is profit Building revenue in a law firm is the key to improving profitability

8. PETER SCOTT CONSULTING Building revenue - Beware The ‘Triple Whammies’ Under pricing Under recording of time Under recovery of time They can seriously damage your profit. How can recording time help?

9. PETER SCOTT CONSULTING Under Pricing

10. PETER SCOTT CONSULTING How much will it cost me? - fixed price / estimate? - charge out rate?

11. PETER SCOTT CONSULTING Are we pricing for profit? How do we know we are pricing our work for profit if we do not know how much our work is costing the firm to do? Value of work dissection and analysis

12. PETER SCOTT CONSULTING Without full time records on work you will not be able to arrive at the right price on similar matters in the future when asked to quote on matters in hand

13. PETER SCOTT CONSULTING Under recording of time

14. PETER SCOTT CONSULTING Leakage? Do you know how much time, which should be recorded, you are losing each year?

15. PETER SCOTT CONSULTING You have [ ] fee earners Each records and recovers an additional 15 minutes per day How much more revenue will you generate in a full year? If…

16. PETER SCOTT CONSULTING Under recovery (realisation) of time

17. PETER SCOTT CONSULTING If you under record time you are pre-judging the decision as to what is the right price for the job. - Whose decision? - How much time did you write off last year? - How accurate is your recovery (realisation) rate?

18. PETER SCOTT CONSULTING Health warning - beware slavishly applying recorded time Time is an important factor but one of only a number of factors to be taken into account in arriving at the right price for the job. Others? See Law Society Practice Notes

19. PETER SCOTT CONSULTING Time is an important management tool

20. PETER SCOTT CONSULTING 1. If you cannot measure it, you cannot manage it

21. PETER SCOTT CONSULTING If you do not fully record time you will not be able to accurately measure it and manage it - accurate financial analysis will not be possible - decisions made on inaccurate analysis will be flawed

22. PETER SCOTT CONSULTING 2. Fully recording time is also important for managing … client expectations Regulatory compliance – Rule 2 Risk management

23. PETER SCOTT CONSULTING 3.Management of workloads / recruitment decisions - who is busy? - who is not so busy? - do we need more / less people?

24. PETER SCOTT CONSULTING 4. Are we working profitably? How do we know we are profitable if we do not know how much our work is costing the firm to do?

25. PETER SCOTT CONSULTING 5. How to budget for revenue As a starting point: Fee earners X Charge out rates X Hours

26. PETER SCOTT CONSULTING 6. Are we ‘on budget’? Fully recording time enables us to - compare performance with budget throughout the year - Identify trends Who measures ‘input’?

27. PETER SCOTT CONSULTING Why is time not fully recorded?

28. PETER SCOTT CONSULTING I was told not to record time on the matter!

29. PETER SCOTT CONSULTING ‘Because I am not worth it!’

30. PETER SCOTT CONSULTING ‘The job will not justify all my time!’

31. PETER SCOTT CONSULTING ‘I cannot be seen to have big write – offs’

32. PETER SCOTT CONSULTING I don’t have enough time to record!

33. PETER SCOTT CONSULTING I don’t have enough time to time record!

34. PETER SCOTT CONSULTING I can’t remember what I did during the day!

35. PETER SCOTT CONSULTING Time is not relevant to our business

36. PETER SCOTT CONSULTING Recording time is relevant to EVERY part of a law firm’s business

37. PETER SCOTT CONSULTING How to set and monitor time targets to achieve financial results

38. PETER SCOTT CONSULTING As a starting point, look at … Utilisation = time recorded as a % of standard working hours (220 days x 7 hours = 1540)

39. PETER SCOTT CONSULTING Monitoring and reporting of time Frequency? Actions?

40. PETER SCOTT CONSULTING Non matter related time? Why is it measured? If information is not used then why measure it? Decide whose roles requires non matter related time to be measured

41. PETER SCOTT CONSULTING Any questions?