LexisNexis® Non-Billable Hours Survey
Topline Report
Executive Summary
In May 2012, LexisNexis® launched the Law Firm Billable Hours Survey to help
quantify the gap between lawyer hours worked versus hours billed to clients.
The survey attracted 499 responses from attorneys at firms of all sizes and from
every state except Maine. Survey findings showed an overall gap of 33 percent
between average hours worked by lawyers per day and the average number of
hours they billed to clients.
While the initial billable hour survey provided useful data, it also raised a number of
important questions, such as:
What types of activities eat up the time attorneys work but don’t
bill to clients?
Do attorneys at larger firms more effectively bill hours than their colleagues at
smaller firms, or is billing efficiency more related to practice area versus firm size?
To answer these questions and more, we conducted a follow-up survey in July
2012. This more recent survey attracted more than double the respondents, with
more than 1,000 attorneys weighing in.
Below are findings and commentary from the two-part “2012 LexisNexis®
Non-Billable Hours Survey.”
Part One: How are Non-Billable Hours Being Spent?
Key findings:
1. The Biggest Culprit: Practice Management and Administrative Tasks
It might come as no surprise that more than 50 percent of the respondents
ranked Administrative or Practice Management tasks (i.e. document
management, filing, docketing, billing, accounting) as the number one or two
activity eating up the majority of non-billable work hours. This finding was
remarkably consistent across firms of all sizes and geographies.
2. Not Implicated: Networking, Client Development, or Client
Relationship Development
Nearly 70 percent of survey participants reported these client development
activities have relatively little impact on their ability to focus on billable
client work.
3. Other Interesting Findings
A. According to the survey, lawyers at larger firms do indeed have higher
average utilization rates than firms with one or two attorneys. More than
twice as many law firms with 6 or more attorneys reported spending less
than an hour a day on non-billable activities compared to the solo and two
attorney firms.
B. Ten percent of survey respondents claimed they couldn’t accurately
account for all their time as a result of their chaotic schedules (e.g. travel to
and from court), coupled with a variety of personal distractions.
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Part Two: Impact of Firm Size and Area of Practice
Key Findings:
1. Which Practice Areas Spend the Most Time on Non-Billable Activities?
A. More than 40 percent of Immigration law attorneys reported spending
more than four (4+) hours a day on non-billable activities. Personal Injury
attorneys come in a close second at 39 percent. 64 percent of respondents
specializing in Immigration law (and 60 percent of respondents specializing
in Personal Injury law) were from solo or two-attorney firms—which suggests
that area of practice may not be solely to blame for their poor showing.
B. 50 percent of Criminal, Estate & Elder and Personal Injury attorneys
(representing 16 percent of all survey respondents) reported spending an
average of more than three (3+) hours per day on non-billable activities.
C. Attorneys in four practice areas—Immigration, Criminal, Estate & Elder
and Personal Injury—reported that the number one category of tasks that
filled up their non-billable work hours was “administrative and practice
management activities.”
D. “Networking, marketing and client development” activities were listed by
this group as their second-most common non-billable activity. Criminal
and Personal Injury practices at law firms are notorious for being very
competitive within their respective fields, so it’s no surprise that these
groups report spending more of their non-billable time on networking,
marketing and client development as compared to their peers in other
practice areas
2.Which Practice Areas Spend the Least Amount of Time on
Non-Billable Activities?
A. Insurance law attorneys get the gold star for billing effectiveness: 76% of
them reported spending two or fewer hours on non-billable activities per day.
B.Rounding out the top three but following further behind were Labor &
Employment law and Litigation attorneys, who reported in at 54% and 51%,
respectively.
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About the Survey
The LexisNexis Non-Billable Hour Survey asked six questions
1. Contact information
2.Size of firm
3.Primary area of practice
4.Secondary area of practice
5.Number of hours spent on non-billable activities per day
6.Rank order where non-billable time is spent
(Scale of 1-5: 1 = lowest impact, 5 = highest impact)
Networking, marketing, client development
Free consultations to win new clients
Writing off or writing down time in order to build, strengthen or
retain clients
Administrative or Practice Management tasks i.e. document management,
filing, docketing, billing, accounting
Other
We solicited approximately 23,400 LexisNexis® and non-LexisNexis customers via
email, plus posted online using Linkedin®. We received 1,071 completed responses.
Completing the survey qualified participants for a chance to win one of the following:
Grand prize
Apple® iPad®2
2 each
E-readers
3 each
$100 Amex Gift card
4 each
$25 Gourmet Coffee card
Page 4
Number of Respondents by Size of Law Firm
Figure 1
20+ ATTY
3%
11-20 ATTY
11%
1 ATTY
35%
6-10 ATTY
15%
3-5 ATTY
23%
2 ATTY
13%
Figure 2
Firm Size
1
2
3 - 5
6 - 10
11 - 20
21+
Responses
% by Firm Size
37035%
142
13%
242
23%
163
15%
120
11%
34
3%
Total Responses: 1,071
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Participants by Area of Practice
Figure 3
1% 2% 2%
2%
20%
2%
3%
3%
3%
5%
5%
11%
6%
10%
8%
8%
8%
Figure 4
Firm Type
Tax Law1%
Worker’s Compensation Law
2%
Immigration Law
2%
Insurance Law
2%
Corporate & Securities Law
2%
Estate & Elder Law
3%
Trust & Probate
3%
Labor & Employment Law
3%
Criminal Defense
5%
Intellectual Property Law
5%
Page 6
Firm Type
Bankruptcy Law6%
Other8%
Personal Injury
8%
Real Estate Law
8%
Family Law
10%
General Practice
11%
Litigation20%
Respondents by Geographical Location
Figure 5
200
178
150
100
80
66
66
FL
TX
50
47
0
IL
NY
CA
Top Responding States
Figure 6
Top 5 Responding States:
1. California
2. New York
3. Texas
4. Florida
5. Illinois
Page 7
Lowest Reported Non-Billable Hours by Area of Practice and Size of Firm
Figure 7
3.5
Non-Billable Hours
3.0
Area of Practice
Insurance Law
Labor & Employment Law
Bankruptcy Law
Litigation
General Practice
2.5
2.0
1.5
1.0
0.5
0
1
2
3-5
6 - 10
11 - 20
21 +
Size of Firm
Highest Reported Non-Billable Hours by Area of Practice and Size of Firm
Figure 8
4.0
Non-Billable Hours
3.5
Area of Practice
Tax Law
Estate & Elder Law
Personal Injury
Criminal Defense
Immigration Law
3.0
2.5
2.0
1.5
0
1
2
3-5
Size of Firm
Page 8
6 - 10
11 - 20
21 +
* Note: Responses were not provided
for all firm sizes.
Conclusions and Recommendations:
While “administrative and practice management” tasks eat up the majority
of non-billable hours worked, the 2012 ABA Legal Technology Survey Report
showed that fewer than 35 percent of smaller law firms are using any sort of
legal-specific practice management software to assist with these tasks.
The Insurance law segment offers an interesting test-case for the benefits of
technology on streamlining administrative and practice management tasks;
attorneys who specialize in Insurance law are obligated to use specific software
and systems to track and record client and matter information. These attorneys
also report spending a much lower percentage of their time managing non-billable
activities as compared to their peers in other practice areas.
While there are no easy fixes, these best practices can help bridge the billing gap.
Carefully tracking all hours worked is a critical first step to understanding how
your time is spent, to improving overall efficiency, and to accurately recording
and billing clients.
First-rate, affordable software is available to help firms of all sizes manage case
and matter details and capture, classify and record hours worked, so there’s no
excuse for using legal pads, napkins, or other analog methods.
By embracing more effective and efficient tools for tracking and recording time
worked, lawyers can help improve their utilization rates and make more informed,
proactive decisions about how they allocate time to practice management,
business development and other critical—though non-billable—tasks.
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About LexisNexis
LexisNexis Legal & Professional (www.lexisnexis.com) is a leading global
provider of content and technology solutions that enable professionals in
legal, corporate, tax, government, academic and non-profit organizations to
make informed decisions and achieve better business outcomes. As a digital
pioneer, the company was first to bring legal and business information online
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technology and world-class content, to help professionals work in faster, easier
and more effective ways. Through close collaboration with it customers, the
company ensures organizations can leverage its solutions to reduce risk,
improve productivity, increase profitability and grow their business. Part of Reed
Elsevier, LexisNexis Legal & Professional serves customers in more than 100
countries with 10,000 employees worldwide.
LexisNexis helps professionals at law firms and legal departments of all sizes
manage the business element of their practice with innovative software
and mobile solutions for customer relationship management, competitive
intelligence gathering and assessment, time and billing management, matter
management, client analysis, legal holds and more.
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