Importance Of Utilization Rate And How Law Firm Can Improve It


Utilization rate is a term used in almost every industry, but the meaning slightly differs in the legal sector. A Utilization rate is a KPI used in law firms to measure the time spent on billable and non-billable tasks. When the team members employ more time on billable tasks, the utilization rate will be high, increasing cash flow. 

A utilization rate reveals where your time is being spent. The more insight you gain into your firm’s inner workings, the better you can make data-driven decisions and increase profitability. Billable hours are the duration of time when the attorney performs tasks for clients, and the law firm can charge for it.

On the other hand, non-billable tasks include indirect duties for an organization that you can not charge for, like, looking into administrative tasks or searching for a new client. Keeping a manual check on this is a challenge. Modern attorney-client management software would be a great choice to tackle this.

How Law Firm Can Improve Utilization Rate

Several factors can affect the utilization rate of a law firm, including the practice area, firm size, attorneys’ experience level, location, and so on. You can check the data trend to know how other law firms in your practice area work to get a comprehensive understanding. The average utilization rate for legal firms in the US in 2021 was roughly 31%, as per Statista data.

  • Accurate Time Tracking

The first step in raising the company’s utilization rate is accurate time tracking. Timekeeping can be laborious and has a high potential for human mistakes.

 According to American Bar Association research, lawyers who don’t record their hours until the end of the day risk losing up to 10% of their billable time, which also means losing profit. You may choose US immigration software for attorneys with a time tracking feature to track time more accurately. 

  • Automated Invoicing 

Reduce the time spent on time-consuming, non-billable procedures like invoicing to increase utilization. Legal invoicing software streamlines the procedure by automatically generating invoice templates based on chargeable activity and sending out automated reminders.

  •  Eliminate Barriers to Client Payments

Without the right tools, managing payments and reporting can take a lot of time, decreasing your billable hours and lowering your utilization rate. By offering online payment choices, your business can lessen payment barriers.

Accepting credit, debit, and Automated Clearing House (ACH) choices gives customers a quick and simple way to pay you and is quickly becoming the industry standard. Attorney client management software like Imagility enables the law firm to accept online payment efficiently.

Wrapping Up

The utilization rate influences the profit of the business. Law Firms must focus on improving the utilization rate using modern technologies. Imagility is an immigration software that assists businesses in streamlining their workflow. You can integrate other necessary legal software to get additional features.