Is time recording a firm's secret weapon?

You’ve just finished another late night as a lawyer and it’s finally time to squeeze in some leisure time before bed. But just as you have one final skim through your emails, you remember you haven’t got your time closed down.

If you’re an organised lawyer, you will have timers tracking all the tasks done that day. Or maybe you didn’t have time in the day to track every task performed, so you look through emails and calendars to estimate how you spent your time. Either way, time recording is not an activity any lawyer ever looks forward to. But time recording serves several important purposes within a law firm.

The first purpose is to charge for fees incurred on a time/cost basis. The second is to perform resource allocation. But there’s also a third benefit that some lawyers may have never considered.

Time recording can provide key data points for firms in how they might improve their services and win new work. Time recording data could help firms understand exactly when they are about to blow through a budget. It could help drive operational improvements in the areas that need it most. It could result in better pricing estimates at the outset of a project.

However, this benefit can only be realised if time recording is done properly and the data structured in a way that can achieve these goals.

Data isn’t the new oil

The Economist proclaimed in 2017 that “the world's most valuable resource is no longer oil, but data”. In some cases, that might be true – but there is a distinction between good, structured data and bad, unstructured data.

Where data is unstructured and inconsistent, it is challenging to draw connections and comparisons to generate the insights you need. Given how much lawyers hate performing time recording duties, it’s no surprise that the resulting data tends to be at the shoddy end of the data structure spectrum.

Firms must do two things if they want to improve the structure behind time recording data:

• Establish how lawyers should record their time. This requires firms to identify the core processes lawyers carry out, so that time can be associated with these processes, and
• Ensure lawyers comply with these processes.

Both objectives are easier said than done. The first requires a deep understanding of the work a firm does and how this breaks down into work streams. The second requires wholescale behavioural changes and developing incentives to make people operate consistently.

If these objectives are achieved, a firm may succeed in obtaining better data structure in time recording systems (see Figure 1).

Figure 1

Structured versus unstructured data

From data to information

Even with good data, something needs to be done to convert it into information. Often, this can be done by visualising the data in different ways. This might lead to actionable information such as ‘how long a signing process took on the last project we worked on’. This helps firms adopt forensic assessments of things like fee estimates, without needing to guess (see figure 2).

Figure 2

Converting structured data to information

From information to knowledge

Information can be taken to the next level by converting it into knowledge. For example, you can combine well-labelled time recording data with information from other systems to generate insights. Instead of saying, ‘this is how much time a generic signing process took last time’, you enrich those conclusions based on other characteristics, for instance, ‘this is how much time a signing process takes in oil and gas M&A transactions’ (see Figure 3).

Figure 3

Converting information to knowledge

This type of knowledge is useful not only for high-level goals, such as predictable pricing, but can also result in improvements for how lawyers operate. For example, a lawyer may submit a slew of time entries about lease negotiations. The firm’s matter opening system picks up that the matter is about real estate in the UK. The document management system retrieves the documents that lawyer has spent the day working on.

Combining information in this way is powerful. It can allow others to identify experts in narrow fields of specialism. It also helps form connections across different business systems, connecting lawyers not only to each other, but to the documents on which they work and the clients they work with. Leveraging time recording data is an important part of this.

In focus

Time recording data can also help knowledge teams know where they should focus their thinly-stretched resources.

With time recording information structured properly, a knowledge manager can pull a report to find what areas lawyers tend to be billing their time to. They may find, for example, that the phase ‘disclosure’ comes out as the phase lawyers record most of their time to. They might couple that data with a statistic from a knowledge search system indicating that lawyers are searching for disclosure materials extensively, but not finding anything. They might also look into billing systems and find out that disclosure exercises entail huge write-offs.

Again, combining information in this way is extremely powerful. It tells knowledge managers that producing materials around ‘disclosure’ would be very heavily used – and that focusing efforts in this direction will directly impact the firm’s bottom line.

This is another example of how time recording data can be the bedrock to operational and business improvement if structured properly. Many firms are using knowledge search systems to gather this information together, allowing lawyers to obtain insights on demand.

The secret weapon

As a task, time recording is never going to win any popularity contests. But allowing lawyers to time record in a more structured environment may improve their experience. And it will finally mean firms can obtain valuable insights from this important source of data.

Jack Shepherd is legal practice lead at iManage RAVN imanage.com He was formerly an associate solicitor at Freshfields Bruckhaus Deringer