Billing Efficiency Survey: Delaware on Top, Oregon Dead Last

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Written By admin at Monday, June 18th, 2012

Fancy New York lawyers might not have much in common with their counterparts in Big Sky Country, but consider this: attorneys at small-to-mid-sized law firms in both states are way better at getting clients to foot the bill for hours they worked than lawyers in Oregon, Kentucky or Minnesota.

So says a survey out Friday that looked at billing efficiency among firms of one to 50 lawyers. The report, from legal technology company LexisNexis, is based on responses from 499 law firms and law departments polled in May.

On average, respondents worked nine hours a day but only billed six hours, it found. That’s a 33%  gap, which LexisNexis chalked up to general lawyerly inefficiency or not using staff to cover non-billable functions. Other factors: hours attorneys spend networking or cozying up to prospective clients, plus some intentional discounting of hours worked to keep existing clients happy.

Bigger law firms often have armies of support staff and sophisticated billing systems that boost efficiency and let “attorneys be attorneys,” said Loretta Ruppert, senior director of community management for LexisNexis Legal  and Professional.  “But at the smaller end of law, they typically wear multiple hats.”

Among the subset of smaller firms, billing efficiency is all over the place.

For example, lawyers in Delaware (at least those who responded to the survey) lead the pack, billing 94% of hours worked. Other states in the top quadrant included New York, Colorado, Utah and Louisiana and Mississippi. Take that, regional stereotypes of the leisurely South!

Less distinguished were respondents in Oregon, who billed a scant 40% of hours worked. Fellow sluggards include lawyers in Indiana and South Dakota.

Firms of 11 to 20 lawyers were more effective than any other firm size group, according to the survey, billing 92% of hours worked. Solo and two-attorney firms overall billed 39%.

Size ain’t destiny, though. Solo firms  made up 23% of the least efficient billers, but they also made up 15% of the most efficient.

“It’s more an indication of the way they use technology,” Ms. Ruppert said. “What we have found is that law firms are bucketed into three different areas: traditional, progressive and low-tech firms.”

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