Billing · 4 min read
How do I bill for unbilled work and time tracking?
Effective billing for unbilled work requires maintaining detailed, contemporaneous time entries and automated tracking systems to capture every minute spent on a client file. Ontario legal professionals must ensure their records align with Law Society of Ontario requirements while providing clients with transparent, itemized invoices.
The Importance of Contemporaneous Time Tracking
Capturing time as it happens is the most critical step in reducing unbilled work. Many Ontario legal professionals lose significant revenue by waiting until the end of the day or week to reconstruct their calendars and dockets. This 'reconstructive billing' often leads to under-reporting, as small tasks like five-minute phone calls or quick emails are easily forgotten. To comply with professional standards and ensure the firm remains viable, time must be recorded immediately after the task is completed.
A common mistake in Small Claims Court or Provincial Offences matters is failing to account for travel time or waiting time at the courthouse. While some fee arrangements are flat-rate, tracking the actual time spent allows a practitioner to evaluate if their flat-rate fees are actually profitable. If you are spending four hours at a satellite court for a single Highway Traffic Act matter but only billing a small fixed fee, you need the data to adjust your future retainers accordingly. Without contemporaneous tracking, these insights are lost.
Meeting LSO Standards for Detailed Dockets
The Law Society of Ontario requires that lawyers and paralegals maintain clear records of the work performed. When a client disputes a bill or when a file is subject to an assessment of costs, vague entries like 'legal research' or 'file review' without further detail are often insufficient. Detailed dockets protect the licensee by proving exactly what work was done, why it was necessary, and how long it took.
Effective time tracking should include the date, the specific task performed, the client file associated with the work, and the duration. In Ontario, most firms track time in tenths of an hour (six-minute increments). Consistency is key. If your retainer agreement specifies six-minute increments, your billing software and manual dockets must reflect this. Failing to provide this level of detail can lead to client dissatisfaction and potential disputes before the LSO or in a taxation hearing.
Leveraging DocketPro to Capture Every Minute
Unbilled work often accumulates because of administrative bottlenecks between the completion of a task and the generation of an invoice. Using a practice management tool like DocketPro streamlines this process by integrating time tracking directly into the client file. Instead of managing separate spreadsheets or paper logs, DocketPro allows Ontario practitioners to start a timer or enter a docket the moment they open a file.
DocketPro helps eliminate 'leakage'—those small blocks of time that disappear when switching between tasks. By centralizing all dockets, disbursements, and client information, the software ensures that when it is time to bill, every recorded minute is accounted for. This reduces the administrative burden on staff and ensures that the firm's cash flow remains steady, as unbilled work is converted into accounts receivable much faster than with manual systems.
Managing Disbursements and Recoverable Expenses
Disbursements are another area where Ontario firms frequently lose money by failing to bill. Expenses such as process server fees, Land Titles Office search fees, or filing fees at the Landlord and Tenant Board must be tracked meticulously. If a firm pays a disbursement out of its general account on behalf of a client, that amount remains 'unbilled' until it is added to an invoice and reimbursed by the client.
Legal professionals should adopt a system where disbursements are entered immediately upon the expense being incurred. Waiting for a monthly credit card statement to reconcile disbursements often results in missed entries, especially for smaller costs like photocopies or registered mail. Integrating these costs into your digital practice management system ensures they are never overlooked during the monthly billing cycle, protecting the firm's bottom line.
Establishing Regular Billing Cycles for Transparency
Consistency in billing cycles is essential for managing unbilled work. When invoices are sent late, clients are more likely to question the work performed or experience 'sticker shock' from a large, accumulated balance. Regular monthly billing or billing at specific milestones in a Small Claims or LTB matter keeps the client informed of the costs and ensures the firm is paid for its work in a timely manner.
Transparent billing also aids in trust account management. Under LSO By-Law 9, funds held in trust cannot be transferred to the general account until an invoice has been prepared and sent to the client. By keeping up with time tracking and generating invoices promptly through a system like DocketPro, practitioners can legally and ethically access the funds they have earned. This prevents the buildup of large unbilled balances that can become a liability if a client relationship sours mid-matter.
The bottom line
To maximize revenue and ensure LSO compliance, Ontario practitioners should use contemporaneous time tracking and detailed dockets. Implementing DocketPro allows firms to capture all billable minutes and disbursements automatically, ensuring no work goes unbilled.
Information only. This article is general information for Ontario legal professionals and is not legal, accounting or other professional advice. Confirm current requirements with the Law Society of Ontario, the relevant court or tribunal, or a qualified advisor before acting.