We are still talking about the area of "billing" as one of the five areas that make up every business in the world. "Billing" is the fourth area. The other four areas are as follows: "Clients" or "customers"; "Administration"; "Getting the work done"; and "Collecting."

This week we are continuing to discuss the topic of YEARLY RUNNING RECAPS ON HOURS PER BILLER in the area of "billing."

One of the concepts I have tried to utilize in my law firm is to have every single person in the law firm be a potential biller. If anyone in your firm, no matter what their title is, does something that is a help in moving a client's matter forward, then that person should bill their time. Everyone in our firm has an hourly rate. Every hourly rate is set up for every client and every matter. We have positions in our law firm that are as follows:

1. Attorney;

2. Law clerk; and

3. Legal Assistant.

When we make out an engagement letter for a client, we list every lawyer in the firm, every law clerk in the firm and every legal assistant in the firm. People who have dual titles such as secretaries, administrative assistants, bookkeepers, comptrollers, office managers, etc., all are also designated as legal assistants so that we can bill for these people's time when it is appropriate.

I have a secretary in my office who is also an administrative assistant and a legal assistant. This secretary bills out time where it is appropriate because the secretary is doing a secretary/legal assistant task as opposed to a straight secretarial task.

We try very hard in our office to have everyone who is a potential biller, be a biller. Last year, my secretary covered half of her salary because of time she billed and that the firm collected. The year before, she covered about one-third her salary. Any time you can take a person who is normally a one hundred percent overhead expense person and turn them into a partial profit center, you are moving towards another part of law firm nirvana. Figuring out a way to make non-profitable expense items into income producing items, is a great way to try to keep your overhead low and under control.

We have another Lotus schedule that compares hours billed on a monthly average basis and on a total basis per year to previous years. It is absolutely amazing to look back over a number of years and to see the monthly averages per biller and the yearly totals per biller for each and every person who is in your law firm. I am sure none of you would be surprised to find out that in years where there are lots of hours, there is also lots of revenue. I can go back to 1993 when my present firm began, and look at the monthly average and yearly total for hours for each and every person who was in my law firm for each of those years. I can also look at the total number of hours that were put in by everyone in a particular year. I know that you think this is obvious, but our spikes in income come in years where we have spikes in hours. I am sure by now that you do not think this relationship is accidental. If you can get good business that pays reasonably good hourly rates with a reasonably good collection rate, you are absolutely crazy not to figure out a way to take on that business.

I think my parents having lived through the depression probably has something to do with the fact that I have always been "hungry." I have always wondered since 1975 where the next dollar was going to come from. There has always been a "need" to get legal business that will pay for your overhead and have something left over so you will be able to make a living. I have just commented several times in the last couple of days about the only thing I ever discovered in life that ever seemed to really work all the time was: "hard work!" No matter how many times I seem to have tried to rely upon other people and their good intentions, it seems I am disappointed more often than not. On the other hand, when I relied upon my own work ethic, things seemed to just happen for the better. When I rely upon the clients I can generate and the business I can control and the ability to be able to turn the legal services on or off depending on whether or not the client is paying the bill, I seem to make more money. Whenever I relied upon other people to have the same work ethic and same judgement with regard to taking on business and collecting bills, for some reason other people seem to come up short.

Next week we are going to continue talking about yearly running recaps on hours per biller. I have a concept in my office I will share with you next week about anyone who can bill, should bill.

Talk to you next week!

Jim Wirken is a civil trial attorney and the Chairman of the Board of The Wirken Law Group in Kansas City.