504 / 736
for each profit
(or
loss)
sharing principal based on
previous experience and ad
justed as necessary as a
target for the year. Each
employee/fee earner has an
actual salary. Fee earners'
salaries (including principals
hour which he should earn
to produce his salary plus
the appropriate proportion
of
general
overheads
allocated to him on the basis
of
an
agreed number of
working hours per annum.
(2) The time-cost factor of a fee
earner
is
the amount per
salaries)
are
treated
as
expenses of the practice.
(3) For recording purposes time
is
shown
in
units
of
6
minutes
(10
to the hour).
Any fraction of a unit less
than 3 minutes should be
recorded
as half
a unit.
Example 2 minute phone call
-2
unit,
4 minute
call
- 1 unit.
Chargeable working hours per annum are
calculated thus
Year
Less
Vacation 4 weeks
52 wks.
Xmas &
Easter
1 week
Illness, bank
holidays &
occasional
absence
1-J weeks
6-J- wks.
45J- wks per annum
35 hours per week 9 a.m.
+n 5.30 p.m. (less
la- hours)
-
1592 hours per annum
Deduct 20% for non-
chargeable time
318
1274 say 1275 hours
per annum.
(12750 units)
3. Set up time recording system for each fee
earner using
the Solicitors Law
Stationery OYEZ SYSTEM He records
on a
daily work sheet,
the time spent on
each matter handled with code letters to
indicate the class of business as in 1
above and also non-chargeable time. A
specimen daily work sheet is shown in
appendix 2.
4. A job sheet for each case is compiled
from the fee earners' daily work sheets
showing the position in the office, the
time cost factor and the number of hours
spent on the matter when finished by
each fee earner. The
cost of the job to
the office
is found by multiplying the
number of time units which each fee
earner spends on the job by his time cost
factor per unit and totalling the whole.
Job sheets are kept in suitable loose leaf
ledger or folders while the cases are
current. On completion or when a final or
interim bill is to be furnished the job sheet
is totalled and disbursements are added.
From this the time cost in money terms
is readily available, which as already stat
ed is a relevant but not the only factor
in preparing the bill.
5. The system does not purport to regulate
the fee charged for each case. Some jobs
may be done at less than cost, others at
more. The system shows the relation of
fees charged to cost of each job to the
office on the basis of pre-determined basic
salaries of each profit (or loss) sharing
principal and actual salaries of other fee
earners
and
ascertained overhead
expenses. In other words it indicates for
each job the minimum fee which ought to
be earned to cover the expenses of doing
it. This is not necessarily the fee which
will be charged.
6. The fee to be charged in each case is
ascertained by a principal or other fee
earner in accordance with office practice
by reference to a commission scale fee,
schedule 2 or bill of costs taxed or not as
dictated by the circumstances and also
having regard to the job sheet for the
case which shows the cost of doing it.
50