Why Write-Downs Are Costing Law Firms More Than Lost Billable Hours

11 minutes learn

Revealed Feb 4, 2026

What authorized write-downs are and why they occur

A write-down is a choice to chop the quantity of billable time that seems on a consumer bill earlier than it’s despatched. In different phrases, write-downs happen after authorized work is carried out, when among the recorded time is deliberately eliminated or decreased throughout billing.

Write-downs are sometimes confused with write-offs, however they occur at completely different levels: 

A write-off happens after an bill has been despatched to the consumer, when billed time is later decreased or not collected, typically by companions or agency management. This may occasionally occur as a result of consumer pushback or a choice to not pursue cost.
A write-down, in contrast, occurs earlier, when a lawyer or their assistant reduces billable time earlier than the consumer ever sees the invoice.

A associated however much less seen class is the silent write-down. These happen when legal professionals under-report their time from the beginning, selecting to not log hours they imagine took too lengthy or could also be troublesome to justify to the consumer.

In all of those “write-” circumstances, the outcome is similar. There’s a hole between the work truly carried out and the work the agency feels comfy charging for.

​​Business analysis from the Thomson Reuters Institute exhibits that authorized write-downs generally happen throughout authorized analysis. Whereas authorized analysis might be billable when it’s affordable and correctly disclosed in a consumer settlement, according to American Bar Affiliation (ABA) Rule 1.5 for charges, even skilled legal professionals can battle to foretell how lengthy it would take to analysis a matter, notably when a problem is unfamiliar or the regulation is unsettled.

Frequent causes analysis time is written down embrace over-research, duplicated effort whereas getting up to the mark in a brand new space of regulation, round analysis paths, and the impulse to examine further sources “simply in case.” And, when analysis takes longer than anticipated, it’s typically the primary class of time to be decreased on the invoice.

Billable hours versus hours labored: the place productiveness breaks down

For regulation corporations billing by the hour, productiveness is measured by time, however billable hours aren’t all the time the identical as hours labored. 

What number of billable hours do legal professionals work every day, and what number of truly make it onto an bill? Whereas it varies by agency and position, the newest Authorized Tendencies Report illustrates how shortly productive work disappears from reporting.

For instance, the report discovered the common lawyer has a utilization price of 38%, which implies that roughly 5 hours of a lawyer’s day go unbilled. And after accounting for losses in invoice collections, corporations are successfully capturing nearer to 2.4 hours of billable work per lawyer per day.

Sadly, productiveness shortfalls typically drive hidden stress and make it more durable for legal professionals to hit their billing targets. 

This hole doesn’t simply impression agency income. It additionally impacts legal professionals’ well-being, as stress to fulfill billable hour targets may also drive lawyer burnout. Associates typically carry out important “shadow work,” or time that contributes to consumer outcomes however doesn’t get reported, leaving them overworked but underrecognized.

One option to higher observe productiveness and keep away from dropping billable time is to make use of instruments like a billable hours chart. By clearly mapping hours labored to billable increments, corporations and legal professionals can extra precisely see the place time is spent, establish mismatches between hours labored versus billed, and handle each targets and workload extra successfully. 

Higher instruments, together with AI for authorized analysis (which we’ll focus on later), may also cut back pointless analysis time and write-downs, serving to legal professionals invoice extra of the work they really do with out worrying about extreme hours.

By monitoring the distinction between billable hours versus hours labored and discovering methods to shut that hole, corporations can uncover hidden productiveness alternatives, enhance reporting, and help legal professionals’ work-life stability whereas sustaining consumer service requirements.

How write-downs quietly erase regulation agency income

The monetary impression of write-downs turns into even clearer when you think about how they accumulate. One hour taken off a invoice for further authorized analysis right here. Thirty minutes written down there. However these small pockets of unbilled authorized charges compound shortly and quietly. Over time and throughout a whole agency, they develop into important regulation agency income leaks, typically with out anybody absolutely noticing.

​​Business information exhibits that write‑downs are widespread throughout roles: Nearly all of companions, senior associates, and junior associates report writing down time at related ranges to their friends. This underscores that write‑downs aren’t remoted exceptions however pervasive throughout corporations.

That’s the direct impression: billable work carried out, however by no means billed. And if corporations expertise smaller write-downs extra steadily, it may be more durable to detect however simply as pricey over time. Losses like this will materially impression agency efficiency, notably when in comparison with common regulation agency income benchmarks.

However the true price of write-downs isn’t solely unbilled charges. It’s additionally a possibility price. Each hour written down is an hour that could possibly be redeployed to higher-value work, reminiscent of consumer counseling, drafting, negotiation, or strategic planning. When analysis overruns devour affiliate capability, corporations aren’t simply dropping income. They’re misallocating expert time that would drive deeper consumer relationships and stronger margins.

Why authorized analysis drives so many write-downs

Authorized analysis is likely one of the hardest components of authorized work to estimate, which is why it drives so many write-downs. Even skilled legal professionals can’t all the time predict how lengthy it would take to succeed in a transparent reply, particularly when a problem is unfamiliar or the regulation is unsettled.

The uncertainty isn’t an indication of inefficiency. It displays a core obligation of accountable lawyering: guaranteeing that recommendation is grounded in an entire and correct understanding of the regulation.

Beneath ABA Rule 1.1, legal professionals should present competent illustration, which incorporates the authorized data, ability, thoroughness, and preparation moderately vital for the illustration. In follow, that usually requires authorized analysis, even when the scope is tough to outline upfront.

This creates a rigidity. Legal professionals have an moral obligation to rise up to hurry, however they fear about spending extra time than feels affordable to invoice, particularly in unfamiliar follow areas, the place analysis time can broaden shortly as legal professionals construct vital context. With out clear endpoints, many legal professionals proceed researching longer than essential to handle danger.

The outcome isn’t overbilling, as many might assume, however self-correction. Legal professionals seize the time, then write it down later out of concern that purchasers will push again on analysis costs. ABA Rule 1.5 reinforces this intuition by requiring that charges be affordable.

On the identical time, expectations round authorized analysis have modified. Courts transfer quicker, the amount of precedent to overview has grown, and purchasers scrutinize payments extra intently than ever. Analysis that when felt defensible now faces greater expectations for effectivity, making lengthy analysis hours more durable to justify with out higher instruments.

How AI improves authorized analysis effectivity and productiveness

Authorized analysis write-downs persist as a result of legal professionals lack methods to orient themselves and know after they have accomplished sufficient. AI instruments provide a transparent resolution. In response to the newest Authorized Tendencies Report, 79% of authorized professionals now use AI in some capability of their corporations, and 82% count on to be utilizing AI extra within the subsequent 12 months.

Whereas, as with all analysis software, legal professionals are liable for reviewing sources and exercising their skilled judgment, AI can shorten ramp-up on unfamiliar points and cut back uncertainty early within the analysis course of. It offers legal professionals a structured overview and shortly identifies essentially the most related doctrines, circumstances, and questions. This permits legal professionals to spend much less time getting oriented and extra time making use of judgment. Put merely, utilizing AI for authorized analysis effectivity means decreasing background-building time, not skipping evaluation.

Utilizing AI for authorized analysis productiveness may also cut back over-research and duplicated effort by:

Surfacing essentially the most related authorities sooner
Lowering round analysis paths
Reducing the impulse to examine “only one extra supply”

Importantly, AI doesn’t get rid of authorized analysis or change skilled judgment. Legal professionals nonetheless must overview sources, assess applicability, and apply the regulation to the info at hand. What AI modifications is the boldness window. By surfacing related data earlier and extra fully, AI helps legal professionals attain well-supported conclusions sooner, with larger certainty. That confidence reduces over-research, makes analysis time simpler to defend, and lowers the chance that vital work is written down later.

Conventional analysis versus AI-assisted analysis

Think about the next comparability between a standard conventional authorized analysis path and an AI-assisted authorized analysis path:

Earlier than: Conventional analysis workflow:

Establish the authorized difficulty
Run a number of key phrase searches
Overview a broad set of circumstances and secondary sources
Increase searches repeatedly, as a result of uncertainty
Double-check or repeat searches to really feel assured
Resolve when sufficient analysis has been accomplished, typically late within the course of
Write down billable hours if analysis time feels extreme

After: AI-assisted analysis workflow:

Establish the authorized difficulty
Use AI to shortly floor essentially the most related doctrines and circumstances upfront, saving ramp-up time
Overview and validate sources utilizing your data and judgment
Apply judgment to the info
Cease confidently as soon as key authorities have been assessed, decreasing the prospect of write-downs

The place Clio Work suits

Authorized analysis is important for accountable illustration, however in relation to billing for authorized analysis, even environment friendly analysis might be written down whether it is arduous to justify at billing time. The true problem is just not the analysis itself: it’s confidence, defensibility, and clear seize of billable work.

Clio Work is designed to fulfill this problem.

Reasonably than treating analysis as a separate activity exterior the remainder of a matter, Clio Work brings analysis, evaluation, and software right into a single, related workspace. By combining context-aware AI with entry to a world regulation library, it helps legal professionals establish related precedent and insights with larger context.

As a result of Clio Work stays knowledgeable on matter information from Clio Handle (together with paperwork, deadlines, duties, and communications), it routinely interprets case context and pairs it with verified authorized information to ship cited analysis outputs.

When analysis, notes, paperwork, and matter context stay collectively, shifting from query to conclusion is far simpler (and quicker). The added readability makes analysis time simpler to defend and fewer prone to be written down later.

Built-in instruments additional deal with an typically hidden contributor to analysis overruns and unbilled work: context-switching. Switching between disconnected analysis platforms, notes, and billing techniques provides friction and psychological fatigue, growing the chance that work goes unrecorded or is silently written down as a result of the lawyer can’t recall precisely how these hours have been spent, which might contribute to cognitive overload in legal professionals. When instruments work collectively, much less effort is spent reconstructing the previous and extra effort goes into making use of authorized judgment.

Why regulation corporations that repair write-downs win long-term

It’s simple to dismiss write-downs as a minor price of doing enterprise, however even small reductions in billable time add up. They will regularly cut back income, distort metrics, and put undue stress in your staff. Corporations that take motion to cut back write-downs, nevertheless, can reap a number of advantages for each income and staff efficiency.

Fewer write-downs imply extra billable hours truly make it onto invoices, resulting in greater realization charges and extra correct reporting. Lowering write-downs may also ease the stress related to billable hour targets, which can assist decrease burnout and enhance retention. When work is recorded precisely, productiveness metrics higher replicate actuality, giving corporations clearer insights for staffing and strategic selections.

Slicing down on write-downs additionally helps a basis for extra versatile price buildings, together with different price preparations and value-based pricing. Corporations that perceive the true price and worth of authorized providers can confidently transfer past the restrictions of hourly billing.

Finally, write-downs aren’t inevitable: They sign {that a} agency’s processes for accessing authorized data and capturing work haven’t been modernized. Corporations that deal with this inefficiency are higher positioned to extend regulation agency profitability, construct stronger groups, and compete successfully over the long run.

Why authorized AI might power a rethink of the billable hour

On the finish of the day, proactively addressing and decreasing write-downs offers regulation corporations a aggressive benefit by defending income, decreasing stress on groups, and creating clearer insights into productiveness. Write-downs from authorized analysis are an efficient place to begin, and thankfully, the proper know-how simplifies this course of.

Authorized AI instruments like Clio Work make it simpler to seize billable work because it occurs, streamline workflows, and defend analysis time, turning invaluable work into measurable impression.

Be taught extra about how Clio Work can enhance authorized analysis at your regulation agency.