Business of Law Track: Legal Accounting, Insights From a Professional

Business of Law Track: Legal Accounting, Insights From a Professional


(upbeat music) (audience applause) – Well, I’m impressed. There are a lot more people here to hear about accounting than I
thought there would be. And let me start by saying this photograph, to me, is
very representative of lawyers. And the reason is because
you really are caught between having to understand
accounting and law. And you’d like to be over here in law, but unfortunately the bar requires that you also be over here in accounting. And as a result of that,
you’re kinda pulled. And for some of you, you’re
doing it on your own, for some of you, you have
outsourced your accounting work. And yet, you really need
to understand what it is, and what it means. So, this is actually who I am because I’m more than an accountant. I do have an accounting
firm, started nine years ago, and we work exclusively with law firms. I’m also a hiker, I’m a national speaker, I’m an avid reader, and
I’m also a Rotarian. Our agenda, we’re gonna
talk about utilization rate, realization rate, and collection rates. What they are, what they are not, how to calculate each one, and what factors affect
those calculations. We’ve heard a lot and if you have read the Trend Report over
the last couple years, the report gives you
all sorts of statistics on what these rates are, and if you’ve listened to George give any of his
presentations, he’ll tell you you know where they should be. I wanna get down to the
meats and the bones of it, exactly how are these calculated, and what’s going to affect them? I’m gonna ask a rhetorical question. I don’t want anybody to
raise their hand, okay? And that is, do you run your firm off of your profit and loss statement? Because if you do, you are missing some of the most key
information about your firms. And I would propose to you not to forget your profit and loss, but there are a lot of other factors that you really need to be
looking at and understanding. And the utilization rate,
the realization rate, and your collections
rates are part of that. These should be, you should know what these are for your firm, not only for you, but if you have staff, you should know what some of they are for your staff as well. So, we’re gonna dive right on in. We’re gonna start with
the utilization rate. Utilization rate measures the amount of billable time worked. Now, let’s consider this. How many people work an eight hour day? Hm, I didn’t expect too
many hands to go up. Okay. The numbers in the Trends
Report assume an eight hour day. If you work more than an eight hour day, then that needs to
actually be a consideration that you factor in. If, on the other hand, you have of counsel which work
less than an eight hour day, a four hour day, if you have support staff that’s on a part-time basis, those are all factors that can be entered into this calculation, alright? So, when we talk about the calculation, what I also want you to think about is, it’s a very customizable measurement based on how you operate within your firm. The utilization rate
does not measure revenue. Revenue does not factor into this at all. Okay, so let’s look at this. Now, the calculation itself. How did we get it? Well first of all, we
have what period of time do we actually wanna be looking at? Do we wanna look at it based on a week? Do we wanna look at it based on a month? Do we wanna look at it
based on a couple months? Or at the end of the year? What period of time? That’s the first thing
that you have to decide when you calculate a utilization rate. In this case, the assumption was a month. Now, if you do a month, are you actually gonna
count the number of days that there are, workable days? What about those Saturdays
that you do some work? Are you gonna consider those? Or are those just things
that you do on the side? Because the utilization
rate is how much time you truly spend, or a support
staff member actually spends. So in this case, we’re gonna use 172, it’s based on a little over
eight hours a day for a month. Now, of that, how many of those hours are billable hours worked? In other words, of those hours, how many of those hours
or how much of that time could you associate to a specific client? Were you working on a case
for a particular client? That’s what we mean by billable hours. In this case, I chose 56. The math is pretty straight
forward, it’s just division. And you then have a utilization rate that would be 32.5%. Is it good? If you listen to George,
it’s not real good. You have those missing hours. So look at it a different way. If you work 10 hours a day, that means you’re only billing
less than 3 and a half hours. So the question becomes,
what are you doing with those additional hours
that you’re working, that you cannot attribute
to time on a client’s case? And that’s another whole discussion but it’s well worth
understanding where your time has actually been spent, and what you are doing with your time. Are you worrying about
some kind of advertising? Are you working on your website? Are you doing your accounting? Are you going to the bank
to deposit your checks? What are you spending that time doing? Because clearly, you’re not spending it on billable hours. So, a utilization rate can be calculated for any period of time. If you currently do not work
with a utilization rate, I suggest you look at it by the month. It at least gives you a benchmark. And very honestly, you want
a benchmark for yourself. The Trends Report is a
wonderful place to start, but what I’m also going to say is my experience has been based on the type of law you are practicing, the utilization rates vary. So to stand up here and
say the benchmark is, I would argue that you
really want to understand what your norm is. And your norm is only gonna be discovered by calculating your utilization rate. By employee, now, yes you
should do it for yourself, but you should also do it for
each member of your staff, whoever is working for you. Whether they are full-time or part-time, you really should know
how productive they are. How much time are they spending? and then as soon as I say
that I’m also gonna say if you have someone in your firm or office that is responsible for
answering the phone, going through the mail, doing
those sort of activities, that needs to be part
of your consideration. You obviously would not
expect their utilization rate to be the same as maybe your paralegal is, or your legal secretary is, okay? And the other is, you can do
this for a specific client. Now, the reason that I tell you this is if you are using flat fee billing, there’s a tendency with
people who do flat fee billing to say, you know I do flat
fee billing, it’s okay. How do you know if your
rates are right for flat fee? If you’re not doing a calculation that’s letting you know how
much time you’re spending, how do you know? You may be under charging. You may be leaving money on the table. So, regardless of how you are billing, you really need to know
your utilization rate. The next one we’re gonna talk about is your realization rate. I’m also gonna say that
this is also referred to as a billing realization rate. And the reason that I say that is there are several very
good articles written, and it’s referred to both ways. And this is a difference
between the billable time and what the client was invoiced. We don’t know anything about that, do we? Everything that had a client’s
name associated with it is what went on the invoice
and got billed to the client. Right? Okay. So, your realization
rate is tied to revenue, because it’s directly
tied to the billable time. So, how do we calculate
your realization rate? Your 132 billable hours worked. Now, those are the actual hours that you logged with that
client’s name associated with it, and again, if you do it by a client then that’s one particular client. If you do it generally, then
it’s all of your clients. And then we have how many
hours actually were billed. So, in this case your
realization rate would be 83.3%. So the question then becomes, if you had 132 hours that were associated with a specific client,
and you only billed 110, where did those other 22 hours go? So, they go a variety of
different places, okay? Number one is you
potentially write ’em off. You look at the invoice
for a particular client and you go, ooh, I can’t
charge them that much. That’s not within our
contractual agreement. Or, oh, wait a second, I’m billing ’em and so is my staff for the same activity. Oh, wait a second, maybe that shouldn’t be five hours, maybe that
should’ve only been four hours. So we’ve got lots of different ways that we’ve got billable hours worked, but the hours that end up on the bill are not the same number. You also want to understand those, you wanna make sure that you do understand exactly why you’re writing them off. Because what you wanna do in this process is also learn how you are billing. What are you doing? Realization rates can be calculated for any period of time by employee, and for a specific client or
generally all billed clients. Again, if you do flat fee billing and you’ve done your utilization rate, I would be looking at when
you calculated that flat fee, you calculated it based on an estimation of how much time it was gonna
spend you to do something. How much time did it, in fact, cost you? Okay? You want to actually know these. Now, what I actually wanna do is I wanna do a couple calculation examples, ’cause I just wanna run through ’em. Here’s your criteria. 250 hours were worked in a month, 194 were billable, 160 hours were actually
invoiced to the client. In this case, the realization rate would be the 160 invoiced hours, divided by the 194 billable hours that would give you a
realization rate of 82.5%. Okay, so, let’s kinda pull it apart. 250 hours are worked in a
month, is that important? No, it has nothing to do
with your realization rate. The realization rate does not consider the number of hours worked. Remember all those missing hours? Those don’t count anywhere
in your realization rate. And that’s one of the
reasons why it’s so important that you have your realization
rate and as well as, (laughs) your utilization rate, okay? Utilization does consider all those hours that you actually worked. Realization is only
discussing the billable hours. So, if you’re trying to
look at a realization rate without looking at the total number of hours that you worked, you’re missing hours that you’re
actually spending working. So let’s go back to our example, the 250 hours worked in a month, for your realization rate has no bearing. 194 were client billable hours. Okay, so, client billable hours, what actually affects those numbers? Where’d the billable hours go? That’s your time is not documented. How many people work and
don’t document the time? Because we did it? Yeah, that was it, you know? So, we’re not always
good about billing time when we’re actually working. We’re going to just run in
and take care of one thing that shouldn’t take more than 15 minutes. And 90 minutes later, we’re
still sitting there, ‘kay? So first of all, not documenting the time. If we’re gonna rely on
these numbers to understand where our time is going and where our revenue is coming from, we need to document all of our time. Time is inaccurately estimated. Here’s the other one, oh I forgot, how long was that telephone call? Oh, you know, whatn’t that long. It was probably not more than about, I don’t know, 15 minutes? Mm-hmm. There’s a lot to be said for looking, if you have a VOIP system,
there’s a lot to be said at looking at that report
at the end of the month and seeing how long your calls are, relative to how long you’ve
billed ’em for, okay? It’s an awareness, just be aware of the patterns that you are doing. Are you estimating your time? How can you get in the
habit of not estimating, but very honestly in Clio, actually starting the little clock? You know? Your phone can be used the same way, the app can be used the same way. If you’re not documenting your time, get in the habit of documenting your time. If you have staff, you
need to be encouraging them to be documenting their time, you know? They’re documenting the
time of I got to work, and I left work. That’s not helping you. You need to know what’s happening between those comings and goings. And you need to know, not
just the billable hours on your clients, but
what else are they doing? And is that the most
efficient way of doing it? Okay, so let’s go back to our example, now we’re gonna look at the 160 hours that were actually invoiced to the client. Okay? What can affect the number of
invoiced hours to the client? ‘Kay so I’m gonna give
you about 20 seconds to think about that one. Oh, I got some squirmers. Oh, you know exactly how
those numbers on the invoice. Time is not put on the invoice by choice. ‘Kay, this is where you’ve decided that the invoice is too high. Or, well, the client’s probably gonna give me pushback on that. Well, it probably shouldn’t
have taken me that long. Well, two of us doubled up on that. I can’t bill ’em twice
for the same activity. The other one, okay, I’m an accountant, I see what you guys do. I know what you do. Okay? We have access to all of
our client’s Clio accounts. I really know what you do. And I’m here to tell you,
there are two pet peeves that I can’t stand, and
you’re gonna hear both of ’em. You came to hear an
accountant’s perspective, you’re gonna hear both of ’em. One of ’em, time is
discounted on the invoice. Why? You did the work! Why are you discounting it? Was it not valuable? If it wasn’t valuable, why’d you do it? This one only peeves me this much. The next one that we’re gonna discuss peeves me this much. I’m just warning you, okay? I’m just giving you a
little heads up there. You’re discounting your invoice when you find a letter
of engagement with them. Was that one of the things? And I’m gonna discount
your invoice 10%, 15%, 20%. As I said, my questions
tend to be rhetorical. Okay, the next thing I wanna talk about is your collection rates. These are also called
collection realization rates. So, your collection rate measures the amount of billed time that is paid. Okay, now I’m gonna go back and I’m gonna summarize for a minute. We talked about utilization rates, okay? What were utilization rates? This is not rhetorical. What were utilization rates? (muffled speaking) Correct. Okay? Then we did utilization rates. Do you see how this
funnel is getting smaller and smaller and smaller, is really what I want you to realize? Okay, utilization rates, were all the billable client hours over all the hours that you worked, and then we kind of came down
to your realization rates. And now we’re in your collection rates. So, the amount of billed
time that is paid. What should this optimally be? (audience murmuring) 100%. The collection rate, revenue collected over what was billed, so your billed time. Now, I want you to think
about something for a minute. Collection rates do
not have a time factor. Notice that in that equation,
there is nothing that says that it was the revenue that you collected within
60 days, within 90 days. So, the period of time that you are actually
calculating this rate for affects what the percentage is. So if you are willing to wait 60, 90, 120, 180, okay we’re at half a year now. Now I don’t know about you,
I’m not willing to wait. Really, six months? And you’re gonna factor that
in to your collection rate, so that you would have
a high collection rate? No, no, you need to be realistic. What are your terms? And do you hold your clients
responsible for the terms that are outlined in your
letter of engagement? Because you should, and
those should be the terms that you’re calculating your
collection rate based on. Does that make sense? Okay, I got a lot of people
that you’re either sound asleep and still looking straight
ahead, that’s pretty good. I mean, I really need you to understand that your collection rate is one of the three calculations
that can be distorted, because the longer you go out, the better your collection
rate is going to appear. But what did it cost you to wait five, six, seven months to get paid? (muffled speaking) Correct, correct. (muffled speaking) Correct, that’s exactly what that is. It’s kinda like that
term, legal accounting. You know? When you’re talking to lawyers
it makes a lot of sense. When people call our
firm that are non lawyers and they go, you do legal accounting? I’m like, yeah, it’s law firm accounting. Okay, why the money collected does not equal the amount billed. Okay, you’re about to hear a number two. I’m warning you right now. This is pet peeve number two and it sends me through the roof. The invoice was discounted
after it was sent. In other words, you sent an invoice, your client then said, called you and said, I don’t wanna pay it. And your response was,
well if I discount it 25% will you pay it? Did you discount the work
you did for ’em by 25%? No, you did the work, people! You did the work. Why are you discounting it? Was it in agreement with
your letter of engagement? Yes! Was your client aware
of what your fees were? I would hope so. Now, was it probably scary
when they got an invoice because you didn’t invoice
for 60, 90 or 100 days? Yeah, I’m sure it was scary. I’m sure it was very scary. Oh yeah, that’s right,
you don’t like to invoice because you have to do
that on Saturday morning and that’s your family time, and so then you’re spending
four, five or six hours doing your invoice. Okay. Your collection rate speaks
to your systems, okay? You really need to look at your systems. How frequently are you billing? We have clients that bill every two weeks. Because they tend to have large cases, not a lot, but large cases. So there are no surprises,
there are no $100,000 bills that the client is surprised by. You gotta look at it from both sides here. You wanna get paid in a
reasonable length of time for all of the work that you did. Your client doesn’t want any surprises. Your client wants to be able to know what’s coming in more or less. So, what’s your invoicing policy? and how are you doing that efficiently? We were thrilled when Clio came
out with their payment plan, because for some of our clients
it made a huge difference. It was actually then became part of their engagement letter as
an option, right off the bat. We offer it as a payment plan. They didn’t wait until
somebody called to say, I can’t pay that invoice. Right in the letter of
engagement they said, we are willing to discuss
payment plans with you. They didn’t lay it out what it was, they didn’t predetermine what it was. But they gave the client the option in the initial agreement where
the client could then say, can you tell me a little bit
about these payment plans? And they could move forward from there. What are you doing? Seriously. How many people practice in a small town, or relatively small town? Okay, what are you doing when you discount a client’s invoice after you’ve sent it? You don’t think that they sat there talking to their buddy and saying, yeah, I called Joe and told him that
I wasn’t paying that invoice and he gave me a 25% discount. What’s gonna happen next time
you do some work for Joe? I hope there’s not a Joe in this room, I’m sorry if there is. What have you just done for yourself? Okay. Make sure that you have
provided options to start with. Give them the ability starting to know, these are my terms, this is
what I expect payment to be, and here are your payment options. Your payment options are
we can do a payment plan, or we invoice every two
weeks with payment expected within whatever your time period is. 30 days, really? Good gosh, look at your utility bill, they don’t even give you 30 days anymore. They want it in 20 now. Collection rates have more to do with your processes than anything. And you need to know what
your collection rate is, and if it’s less than
100%, I’m asking you, please review your process. Review your letter of engagement, is it perfectly clear what your terms are? Is it perfectly clear what
your invoicing cycles are? Have you laid out options? We all want options. I mean, that’s human nature. Don’t tell me I have one option. If you went out there to
lunch and they had one option, okay, this is it, you’re
getting a hot dog, you’d be pretty disappointed. Okay? Alright. The other is, you do actually have times when clients will not pay, and
you choose to right it off. Understand those, understand why. I’m not saying that there
are not circumstances where that’s perfectly
reasonable and logical, but you need to understand it. By and large, most of you do
not like to discuss money. You like to collect it, but
you don’t wanna discuss it. Okay, so. I wanna talk about the three
things that we just covered, and I wanna talk about three other things that I really, and the
six of them together I would encourage you to
look at on a monthly basis. The three rates we just covered was the utilization rate, and again, you know you start at the
funnel which is real big, this is billable hours
versus available hours or hours worked. And be honest with yourself. Don’t allow yourself to do that 15 minutes on Saturday morning that
turned into 90 minutes and not write it down. ‘Cause you’re only fooling yourself. And really, you know,
you talk about burnout, you talk about frustration, you talk about how much time
you’re spending in your firm. Get a handle on just exactly
how much you are doing. I recently talked to a firm where one of the partners
handed me the most beautiful Excel spreadsheet that
I think I’ve ever seen someone hand me and I said, wow, when did you do this? And he said, oh, that’s
what I do Saturdays. And I said, so you spend
all day Saturday doing this? And he said, yep. And I said, I didn’t see
that documented in Clio and he goes, oh no, that wasn’t law work. And I said, yeah, but
that’s still your time working in your practice. He literally was only
booking the time in Clio that he was working on cases. You need to track all your time. You need to truly understand
how you’re spending your time. Realization rates. Hours billed over your
billable hours worked. And we talked about where
those could actually go. And then we have your collection rate. All of these numbers,
they’re just numbers, they’re percentages. It’s a simple division. But it’s like anything else, the quality of the information going in is going to drastly affect the quality of the information going out. These are important numbers
for running your firm from. You should know for yourself as well as any support
staff that you have. Whether it’s of counsel,
whether it’s an associate, whether it’s a paralegal,
whether it’s your, you know, admin person. You really should know where the time is going, and
Clio gives you that ability, as long as you track it. Now, the other three reports
that you should be looking at every month are your profit and loss, your balance sheet, and
your accounts receivable. If you have accounts receivable issue, you better be looking at
your collections rate. Because the nice thing about
accounts receivable report, what does it say? 30, 60, 90, depending upon what software you’re using, 30, 60, 90, over 90. Alright? How many people owe you money? There’s some very good reports in Clio where you can actually look at, one of them is part of their WIP report where it’s actually gonna show you, what’s your accounts receivable? And then what’s your work in process that hasn’t been billed yet? Your balance sheet, what I’m going to say
about the balance sheet, ’cause we’re not gonna spend
time on the balance sheet, that’s like, for some of you
that have heard me before, that’s like a 60 minute
presentation in itself, is the balance sheet. But what I am going to say is, most people look at a profit and loss and they look at the bottom line as if that’s the money that they made. As a matter of fact, we typically handle two
to three calls a month of firms that feel like somebody’s embezzled money from them. Because they look at the
bottom of their profit and loss and they see a number is not
reflected in their checkbook, and they feel like somebody’s
walked out with their money. What I will say is, if
you use a credit card to pay any of your expenses, any of them, it’s not going to show up
on your profit and loss as those expenses were deferred, it’s gonna show up as
if they’ve been paid. It’s only your balance
sheet that’s gonna show that that money is still
owed on a credit card. So if you’re looking at your
profit and loss statement, you need to be very, very careful as to whether or not those expenses have in fact been paid. The same thing I’m gonna
say about your income line, you need to be very, very careful about whether or not that
revenue or that income has in fact been received. Because if you’re looking at
your profit and loss statement and the revenue has not been received and those expenses on there
have not yet been paid, that profit and loss will
give you a very distorted view of your firm and where
you’re standing financially. Okay. And if you made it this far,
you did better than this guy. But we do have about 12
minutes for questions. Okay, she’s got a microphone so that everybody can
hear, if you don’t mind. – I just a question about whether there’s any kind of benchmarks we should be shooting for on any of these utilization, realization,
collection rates. I know you said you kinda
look at what you’ve done, but is there sort of an industry standard that we should be trying to achieve? – So here’s what I’m gonna say, the Trends Report does have
industry-wide standards, yes. But I’m also going to tell you the area of law that you practice, the Trends Report does not
break it down by area of law. And so there are not
standards by area of law, that’s why it becomes very important for you to look at what you’ve done. You know, if you are in an association, I would really encourage,
you know family law is one that they anonymously submit what their, it’s self-reporting as to what they are so that other people can get a feel for where they’re falling within that. But be really careful when you look at industry-wide benchmarks, because the area of law
makes a big difference. If you are dealing
directly with a consumer versus corporate law, those are huge variances between those. And if you’re doing
any law for government, that’s another huge variance and they tend to all get grouped
together with benchmarking. – [Woman] Thank you. – For those of us that have practices where a lot, or as in my
case, the majority of my cases are contingency fee contracts, is it still possible to calculate these benchmarks we went over.
– Absolutely. – And I’m sure that’s a whole nother class but can you give any tips on that? – Sure. You would still calculate
your utilization rates exactly the way that these
are done, absolutely. Now, your realization rate, you know you’re looking at
it a little bit differently because you already
know if you win the case what that contingency
amount is going to be. But yes, you still do have to do it, and you’re right, that’s
another whole discussion, which is very different, but yes you do need to be doing these. The biggest thing is your collection rate is really gonna fall off. You would look at your collection rate would be done very, very differently, and it would be based
on the number of cases that you won versus the number
of cases that you didn’t, and the time allocated to each of those. So, but yes, the first two
you most definitely could. – I’m curious about your
rhetorical question. I have several of my attorneys
that when I look at the bills they’ve reduce the rates. And I can’t get and understand that, and I get that you’re
asking rhetorical questions. Seems like to me when I go to ’em, the next month I’ll find out
that they’ve just not billed or done a non bill on it
instead of just reducing rates. How do you address that,
is it a training thing? I mean, is it punitive? How is that dealt with in
the firms you work with? – So really, are these
of counsel or associates? – [Man] Associates. – Okay, so really the
way that we address it is we actually will do a utilization on those individual people
so that we can see exactly, and some of this is gonna be your compensation structure as well. So it’s one of the reasons
that it’s rhetorical because if you have
associates that are salaried, where at the end of the year they have to bill so many hours, you know, that whole compensation scale needs to be broken down so
you’re not looking at it just on an annual basis. But you’re looking at
it on a monthly basis and I would be doing it
through a utilization. Okay, this is how many hours that you actually were you know, working. And this is what you billed
and what your ratio is, and if we apply that to
your 1,700 hours a year or whatever your billing
criteria are for your associates, it gives them the information in a very different perspective. This invoice is a very
personal thing to them. And the thing is is that,
their relationship with you and the requirements is less personal. And I know that sounds real awkward, but it really is because
it’s sort of like, I can make that up next month. This is the here and now and this is the person I just worked with. So, I really would rely
on your utilization rates and look at them as a percentage relative to your expectation of the billing of 1,700 hours a year or whatever that is. Does that answer your question? Give you some idea? – In addition to the
PNL, the balance sheet and accounts receivable, if you can produce a cashflow report, would that be something
that you would recommend? – [Gale] I’m sorry, I missed? – Cashflow report? – Yes I do. What I will say is, most of
the statements of cashflow or cashflow statements, are not geared towards legal firms. And so you can get that very bogged down in the equity section of it depending upon how the partner payment structure is. And that’s why if your accountant is used to working with law firms, they will modify that quote,
standard statement of cashflow or cashflow statement, which would be a much more valuable tool. But when you have guaranteed
payments to partners and things like that, it just
distorts the whole statement, and therefore I’m, you
know, typically I don’t say this is something you need
to get from your accountant because it’s gonna be
bogged down with a lot of anomalies in many cases. – Quick question on the best way in Clio to track the hours worked
that aren’t for a matter, so for instance when
you’re doing the payrolls or your doing the accounting work? – Right. So, your time tracking gives
you the ability to track time, you can identify how you
wanna track time, okay, so for each time keeper. And I don’t think we take enough advantage of being able to say administrative work or you know, bookkeeping
work or whatever it is that you’re wanting to track,
and you need to do that. Because just to throw those
missing hours into one lump sum really doesn’t help you, because in some cases you
may be the only person that can do that. And in other cases, you
still need to track, for instance, even if you
outsourced your bookkeeping work, you as the managing partner or the owner of the firm or whatever, you still need to spend
time looking at those. I mean, you can’t just blindly say, oh they’re really good! Yeah, we’re really good
but we’re relying on you to look at those, okay? So you do need to take
advantage of that in Clio and actually break that out, as well as your other time
keepers that are doing it. – My question is, do you think
Clio can replace QuickBooks, assuming you have a firm
where money goes out either via check, wire, or credit card, and money comes in wire, check,
cash in through Clio Pay? I guess what I find us doing
is that we have to track our credit card expenses
and we have to track, you know we have reports in Clio, we have the credit card
reports and then we have the QuickBooks also, and then
it becomes just a giant mess when we hand that over to the accountant at the end of the year. – Right, so what I’m going to say is, Clio is not a general ledger, sorry, that’s accountantees. But it’s not a general ledger. So in other words, you
can do things in Clio that you could never be able
to do in a QuickBooks file. And it’s a matter of, you
can delete things in Clio that you shouldn’t be deleting. And I talk to the developers
about this all the time. I would not use Clio
alone for your accounting. Now what I will say is, I bet when we take over
a account for somebody, we probably, nine times out of 10, the integration between
Clio and QuickBooks is not set up correctly because QuickBooks has
not been set up correctly. Okay? And very honestly, I’m a huge
supporter of Clio support. And if you can call Clio support and get an accountant on the phone, let me know what number you called. Because that’s not their job. So, when they actually help
you with the integration, they can’t help you with
the QuickBooks side of it so the integration is set up, but if the QuickBooks hasn’t been set up correctly to accept it, you do have a big mess. And that is true. – [Man] We have time
for one more question. – [Woman] Hi, at our law
firm we have people tracking, or our attorney’s are tracking
their times spent on admin, they’re also separately tracking
hours spent for marketing, where they go to conferences,
they’re meeting with clients. Where we’re not billing a client but it could be an existing client or not, would you recommend a metric to measure maybe their billable hours versus the hours they spend marketing? Or is there something we could do to kinda gauge if that’s a
worthy use of their time? – Sure, and that’s exactly what, so there is a term called
ROI, return on investment, and you know whenever
you go to a conference there has to be a return. Now, it could be an educational return, it could be a contact,
you had the opportunity to make contacts with some people. You know it can be a
lot of different things. But there has to be, before they go, there has to be an idea
of the expectations of what you expect them
to come out with, okay? So, yes, that’s how you’re
actually gonna measure whether or not, I really
cringe when I see contracts that say, you will go to
three conferences a year. Because it’s sort of like,
what’s the objective? You know, you can’t just
send somebody to a conference and say, come back and
report on what you learned. You need to have measurable
what are the expectations that they are going to. So when you say marketing, okay, that could be any number of things. That can be a lot of things. So, what was it? Did you need a new web developer? Do you need a new I.T. company
that’s gonna manage it? You know, what are those
marketing criteria, which is why they’re going. And those need to be identified
before somebody goes. And then it does become a measurable, and yes it should be,
because if that’s part of the expectations for
that member of the team, yeah, then yes it should be part of it. Thank you very much, I appreciate it. (audience applause) – [Woman] Awesome, thanks so much, Gale, and thanks so much everyone. We’ll kick back up in 30 minutes. (upbeat music)

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