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February 06, 2019

Tracking and Controlling Cost (Part 2 of 2)

By Steve Barrett, Jim Hassett, and Tim Batdorf


If the firm does have timely information going into the system, the next step is to get it out.

Whatever accounting package your firm uses, it already has a number of built-in features to assist budget tracking. The exact details vary not just from one program to another, but also depend on the version your firm is running and any add-ons they may have purchased. Since features are also constantly being updated and enhanced by software vendors, the best way to find out exactly what your firm’s software can do is to talk to your finance staff.

There is no one best solution for tracking. The best answer for you will depend on client needs, the way you like to work, the features of the software your firm already owns, and how much time is required and available for assistance from finance personnel. (Depending on your software, your finance department may simply not have enough staff available to implement a solution which is technically possible but time-consuming to set up or administer.)

The need to talk to appropriate personnel is especially strong if you work at one of the many firms that has developed or is in the process of developing its own individual custom applications to track and report spending.

During your discussion, you may want to talk about how practical it is to set up features in advance such as:

  • Initial budgets for a matter, phases, tasks within phases, and/or work in progress (WIP) on individual tasks by each timekeeper
  • A set of specific tasks and phases (whether the standard UTBMS set or a custom developed set)
  • A standard set of prose descriptions to identify tasks, with uniform nomenclature (Typically, one enters a task name in the pre-designated “Task” user-defined field with a 60- or 80-character field text limit)
  • The ability to limit which timekeepers are allowed or not allowed to bill time to a particular matter

Then you should discuss the most practical way for you to review the data, such as:

  • Summary reports by matter—The finance department may be able to set up a simple report that can automatically be generated every week, every month, or at whatever reporting interval you specify
  • Summary reports by client—It may be practical to track and report on overall client charges (by percent, absolute amount, retainer, or credit limits) as well as the phase, task, or individual timekeeper reports
  • Excel spreadsheets—If you like to work in Excel, reports can often be delivered in this format at your request (e.g. simply showing three columns: the initial budget, actual spending to date, and remaining budget)
  • Alarms or flags can be set to warn you via computer-generated automatic e-mails if a matter is running beyond its budget for a period, any time a certain number of dollars have been spent, or whenever a matter has spent any pre-defined percentage of its budget. For example, you could request that emails be sent to you automatically when you reach 25%, 50%, 75%, 90%, and 100% of spending.

In addition to the features in standard accounting packages and the custom programs some firms have developed, there are a number of related software tools that firms use to track and analyze financial metrics. In the last few years, legal project management software has also started to emerge as a new category. 

In summary, there are so many options and variations in this area, and they are changing so rapidly, that if you want to know the most practical way to track budgets in your firm, you will need to talk to the appropriate staff.

Reproduced with permission from the Legal Project Management Quick Reference Guide, Fifth Edition (© LegalBizDev, 2019).


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