Time recording is essential to the solicitor’s business model and profitability. But it is an area that is often given little attention or is overlooked until it causes an issue with recoverability of profit costs.
So what is best practice when it comes to recording your time?
For most solicitors the billable hour remains, for now at least, the primary method of calculating the costs to be claimed from both their own clients and opponents in the event of an inter partes costs order.
When preparing bills of costs for assessment a costs draftsman will rely primarily on the letters, emails and file/attendance notes included within the file along with any electronic time-recording printouts.
If it is apparent from other evidence and documents in the file that an item of work has been done but not recorded then it is also possible to include “estimated” time, which should be noted by use of an “(e)” against the entry in the bill.
A line of case law starting with Maltby v Freeman & Co [1978] 1 All ER 913 established that estimated time may be allowed upon assessment. But there is some contrary case law: Brush v Bower, Cotton & Bower 1993 indicates that estimated time should either not be allowed or at the very least should be treated with caution by an assessing judge and only allowed if proved by way of other documents.
Even if estimated time is allowed in principle, the burden will always be on the Receiving Party to convince the judge that the time claimed was actually expended and that it was reasonable for them to have spent the amount of time claimed – see Jemma Trust Co Ltd v Liptrott & Others (no.2) [2003] EWCA Civ 1476.
To ensure the maximum recovery of time and, therefore, profit costs, the best evidence will be a properly recorded file or attendance note, either by way of a hard copy/electronic note on the file, a fully detailed electronic time-recording entry or a combination of both.
When it comes to recording your time, the following points should be considered and followed:
As far as is practicable, time should be recorded contemporaneously for each task and on each file to ensure that the records are as accurate as possible. Try to avoid leaving it until the end of the day, the next day or even the end of the week to make multiple time-recording entries. The longer you leave it, the more likely that you will either forget to record an item of work or under-record the time that it took. Also, if an item of work is challenged upon assessment and it emerges that the time recording for that task was done some hours or even days later this can raise doubt in the assessing judge’s mind as to accuracy of the time being claimed.
All time recording should include the date, a brief description of the work done, the time taken and by whom.
Try to include a note of any particular feature of the work done that may have led to more time that normal being expended on the task e.g. travel disruption leading to a longer journey time when attending an appointment/conference or if some documents being considered were particularly voluminous (including perhaps a record/estimate of the number of pages). Also, if recording time that would not normally be recoverable without some specific reasons or justification, you should include an explanation of why that time had to be incurred e.g having to travel to see a client rather than them coming in to the office to see you as they are incapacitated.
If recording time both in a file/attendance note and by way of electronic time recording, ensure that the two match each other, particularly in respect of the time taken.
If recording time on a matter that is likely to be/is multi-track and budgeted, it will be useful to include a note of the phase and the task and activity following the introduction of electronic bills. Also, if work is done that covers more than one phase in a budget, make a note of the time spent on each phase e.g. if a conference with Counsel covers expert evidence, witness statements and offers to settle, make a note of the time spent on the expert reports, witness statements and ADR/settlement phases.
Remember that any detailed assessment of costs is likely to take at least six to 12 months, or possibly even longer after the matter concludes. Therefore, the assessing judge may be considering challenges to time claimed for work done several years ago. Inevitably memories will have faded so your time-recording note will be the best evidence to satisfy the judge that the work done and time spent was reasonable.
Budget monitoring
In cases where a Costs Management Order has been made and a budget approved, accurate time recording is essential to keep track of whether you are getting close to the amount of the budgeted costs in any phase. This will inform any decision about whether an application may be required to amend the budget (subject to there being significant developments to justify the amendment) as well as the consideration of what additional amounts should be sought.
To be able to correctly monitor the current spend in each phase it will be essential to note the phase in each time recording and, if recording an item of work that covered more than one phase, to provide a breakdown of the time spent on each phase.
Solicitor own client assessments
It is not just in matters where inter partes cost may be claimed that the above considerations apply.
Subject to some exceptions, all clients may seek an assessment of their solicitor’s fees under the Solicitors Act 1974. If the retainer is based on hourly rates, you must provide accurate and appropriate details.
For any solicitors’ firms who rely on the hourly rate model, proper time recording is an essential discipline.
This article was written by Nick Kitchen who is a Legal Executive and senior costs practitioner working at the Exeter branch of Burcher Jennings.
Burcher Jennings, as well as providing traditional costs drafting services, also provides pricing and funding solutions for Solicitors.
Phone: 0870 7777 100
Mobile: 07771 778099
Email: martyn.jennings@burcherjennings.com