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ISSUE III 2019

How to Really Measure Timekeeping Performance (Like They Do on Top Gear)

Revenue has historically been used as the metric for measuring timekeeping performance. In this article Nick Jenner points out that actually makes no real sense, and advocates an altogether more effective approach.

 

I used to regularly watch a UK TV automotive show called Top Gear. It’s shown all over the world. Among its features was one called “Star in a reasonably-priced car.” The idea was that each week a different celebrity, after a bit of practice and coaching, would drive one fast, timed lap (they called it a “hot lap”) of the same track, in the same reasonably-priced car.

Give or take an allowance for whether the track, on the day, was wet or dry, the “same car/same track” scenario enabled direct driving performance comparisons to be made between different celebrities. It is through thus we discovered that in a Kia Cee’d, Matt LeBlanc was fastest, Damian Lewis was slowest (in snow), and Tom Cruise came ninth. I could go on, but I won’t, because we’re already past the point where you’ve begun to wonder what my point might actually be.

It’s simply this: I believe that you can legitimately make performance comparisons when the variables are very limited – same track, same car – but you shouldn’t do so when they’re not. I’m therefore arguing that it’s simply wrong to judge timekeeping performance exclusively using the metric of firm revenue.

No Correlation

Let me expand. Firm revenue has been seen for a long time as the right way to measure timekeeping performance. Typically, a calculation is made using the number of timekeepers multiplied by their respective rates. A total is arrived at. This is then used to benchmark the performance of a timekeeping solution. If the net revenue goes up, the solution works; if it goes down, then it doesn’t. Going forward the same metric is applied to gauge performance year-on-year or when a new timekeeping element is added. The bigger the revenue, the better the timekeeping performance, right? But on analysis, that doesn’t really stand up.

Why not? Because it’s like judging a celebrity’s driving performance by sending them to the shopping mall and back in their own car. Their vehicle may be a Porsche or a Chevy. Traffic may be heavy or light. There may be roadworks and diversions. They may all take different routes. In other words, there are too many variables.

Firm revenue is also the result of a large number of variables. There are external factors such as the economic and regulatory climate, which will influence how much business a firm handles. Maybe the economy is booming so you’re very busy. Maybe it isn’t, so you’re not. It’s nothing to do with timekeeping.

Similarly, there are internal factors. Perhaps the firm has upset a big client and they’ve found alternative legal representation. Or perhaps the firm’s work is delighting clients, who are pushing more and more business your way and more timekeepers are hired. Again, nothing to do with timekeeping performance. Across the board, in fact, there is no actual correlation between firm revenue and timekeeping performance. So there ought to be a better and easier way to measure it – and fortunately there is.

The Virtues of Velocity

The starting point has to be a measure that isolates timekeeping performance from other contaminating factors. That’s why revenue is no good as a standalone metric without further context. As noted above, too many other elements corrupt the result.

In addition, timekeeping should be measured in a way which actually reflects the amount of value delivered. So it’s not sufficient to look only at quantity of time, i.e. hours. It’s also about quality: what is the quality of the timekeeping inventory which ultimately impacts realization?1

This is why velocity – a metric first introduced in the early 2000s by Peter Zver2 – is the critical thing to measure.

To be clear, velocity is the single number which reflects how quickly work is being captured in a system after the work event. If I do the work on Monday and record it on Friday, this equals a velocity of 4. If I do the work on Monday and capture the time contemporaneously, the velocity is zero. In fact, velocity is very diagnostic because it’s a simple and precise reflection of reality.

It follows that high velocity is bad, because no one can remember with complete accuracy all the things that they did many days ago, especially if they’re under pressure. By Friday, what an attorney did on Monday is inevitably something they’ll have to piece together. Maybe with notes, a calendar and some emails to go on. Or maybe they just recall spending “all” afternoon on one piece of work. But that might be a distortion of reality.

Of course, it gets worse the longer it’s left. Some firms are still leaving time recording until the end of the month. But most fee-earners have completely forgotten what they did three weeks ago last Tuesday. Haven’t you? Again, they have a calendar to go on; maybe some notes, emails and documents whose date of creation they can find. But the busier they are, the less likely it is they’ll have good notes and that nothing will slip their memory.

And the point is that for the firm it results in leaked time – some of it in small increments and some in big chunks: an attorney speaks to the client in an airport lounge for twenty minutes but by the time they get off the plane and head home, it’s completely forgotten. This typically happens outside of the office and outside office hours.

Meanwhile, the solution to leaked time is to achieve zero, or near zero velocity by adopting systems which enable very quick, easy, painless, contemporaneous and mobile time recording. Such systems allow time to be entered in increments which previously seemed too small to justify the effort. But even more significantly, they have the power to completely flip leaked time into “new found time”, which is really impactful.

The Way Ahead

Firms now need to take notice of velocity. They should make sure every timekeeper knows what it is, and what velocity they are personally achieving. Firms need to make velocity the metric against which timekeeping performance is measured, recognized and rewarded, possibly extending it into the firm’s compensation plans.

Firms need to emphasize that low velocity equates to high quality, which really matters because of its large impact on both realization and trust. Realization is something lawyers should really care about because who wants to work for nothing? Yet inaccuracy, vagueness and padding creep in when velocities are high, giving clients more opportunity to question their bills and right them down.

Meanwhile, perception of value is like a bottle of milk left in the sun: it spoils quickly. Clients are pleased and happy the day a dispute is resolved, a merger safely delivered, or a claim settled – but two months later, those emotions have dissipated. So your very slow bill becomes one they feel more inclined to scrutinize and query. The longer it takes to submit time and thereafter produce a high-quality invoice, the higher the likelihood that the realization will go down.

Hand in hand, inaccurate bills and unclear line items also erode the client’s confidence and trust in the firm. Which is serious. An established track-record of immaculately presented and prompt invoices will better position you come panel review time. You’ll look like a firm that delivers consistency and accuracy, and with whom clients can confidently collaborate. Meanwhile slow, poor quality invoices may make a client wonder if it’s getting slow, poor quality counsel.

Finally, firms need to be clear that velocity is the metric which reflects true timekeeping performance and gauges the value of time inventory. Yes, revenue and hours still matter to the firm. But the salient point is that they are business metrics, not timekeeping ones. It’s a flawed equation if these are the measures used to evaluate timekeeping performance. Velocity is the real deal, simply because it’s the one which will drive timekeeping behavior, especially when given a Porsche to drive.

 

1. Realization is the proportion of the firm’s work performed which ultimately gets paid
2. Peter Zver is President of Tikit North America and has been involved in best-of-breed timekeeping since the late 1990’s

Tikit

Tikit is part of the BT Group and a leading provider of technology solutions for law and professional services firms. Intelligent Time is the latest augmentation to its flagship Carpe Diem timekeeping platform. Click here for more information.

 
 
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