Billable hours v. actually billed

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Anonymous User
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Billable hours v. actually billed

Postby Anonymous User » Tue Aug 29, 2017 2:10 pm

What's usually the ratio between your billable hours and actually billed?

FWIW asking for a smaller firm, meaning less "firm activities" such as lunches, networking events, etc.

I guess I'm trying to see if there's a huge discrepancy. Is 1800 actually billed more like 2000 billable or 2400 billable?

lolwat

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Re: Billable hours v. actually billed

Postby lolwat » Tue Aug 29, 2017 2:49 pm

Do you mean "actually billed" as in like actually collected from clients (i.e., not discounted or written off)?

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Re: Billable hours v. actually billed

Postby Anonymous User » Tue Aug 29, 2017 2:50 pm

Depends on area, clients, and other factors.

My firm tracks billable, billed, and collected (collected for partners only).

1st year transactional attorneys usually have billed = 80% of billable. Goes up to about 90% in later years.

Litigators average about billed = 95% billable across the board.

I have no insight regarding collected ratios.

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jchiles

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Re: Billable hours v. actually billed

Postby jchiles » Tue Aug 29, 2017 2:56 pm

Anonymous User wrote:What's usually the ratio between your billable hours and actually billed?

FWIW asking for a smaller firm, meaning less "firm activities" such as lunches, networking events, etc.

I guess I'm trying to see if there's a huge discrepancy. Is 1800 actually billed more like 2000 billable or 2400 billable?


This is probably the wrong way to look at it for a small firm.

Recordable time may include marketing, business development, or firm administration but it is not "billable" in the sense that the time will go on a bill to be paid by a client. "Billable" time may not be actually billed for any number of reasons.

So, you might record 2000 hours a year, 1800 of which are "billable" and 200 of which might be classified as "non billable" or "firm," which means you had recorded 40 hours a week for 50 weeks (assuming 2 weeks of vacation or whatever). It is highly unlikely that every hour you are in the office is recordable, let alone billable, so you may have worked an average of 45-50 hours a week.

Of the 1800 billable, some percentage will not be billed. I have worked at several small firms and I think it's normal to only actually bill 80-90% of billed hours. Of those hours actually billed, some bills won't be paid.

So what you should focus on with a small firm is the actual billed hours requirement, which will almost certainly not include firm or nonbillable time. I would expect to work 10-15% of your billable hour requirement as nonbillable time, but at a good firm they will take this into account as you are expected to keep up with marketing and business development even early on.

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kalvano

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Re: Billable hours v. actually billed

Postby kalvano » Tue Aug 29, 2017 3:05 pm

I work for a small firm where I try and track everything I do (from admin work to client development to actual work billed to clients). Last year I was just shy of 2,000 hours actually billed to clients, which represented about 85% of my actual time spent doing work things.

SFSpartan

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Re: Billable hours v. actually billed

Postby SFSpartan » Tue Aug 29, 2017 3:28 pm

A lot of this is going to depend on what matters you get staffed on and the practice area you are in, so YMMV. That said, as a first year corp. associate, I've gotten to bill about 95% of the time I was in the office, excluding two flat fee matters I was put on (the partner deliberately underquoted a client in the hopes that it would lead to more work, and didn't want the firm to know he had done that, so I got screwed out of about 80 hours of time that I was specifically forbidden from billing). Of that time, over 90% made it to client bills.

My experience is probably a bit unusual though - I worked for my first firm from the start of 1L summer, so I learned how to bill how the partners wanted me to bill (i.e. in a way that my time wouldn't get written off). I was also unusually busy, so there's that.



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