If you spend any time around a Lawyer, you will find that they focus on one thing, billable hours. Whether they are in private practice or a large firm, the focus is always on how many billable hours can be squeezed into a day. Though many people dislike lawyers, this principle can be modified to help you become more successful.

What this post is going to do is teach you a simple system so that you can learn to “bill” yourself for potential revenue generating tasks. Though you might not be making money off of these tasks at this time, it will set up the habits in your life that you will need in the future when you are making money from these tasks.

Before you begin, think about the time you have available to work on “billable” work. Here is what a typical weekday and weekend breakdown would look like for me:

For weekdays I, on average, have four hours available for “billable” tasks. For me, these tasks are: time spent writing blog posts, speeches, articles, and white papers. Now use a simple time tracking tool (spreadsheet or free time keeping application) to create these as “billable” tasks.

Now spend some time figuring out what your “non-billable” tasks are. Examples from my life are: watching TV, surfing, reading, window shopping, and hanging out with friends. Now don’t get me wrong, the point is not to stop doing any of these things. The point of this exercise is to help you track what time is spent on revenue versus non-revenue activities and develop the habit of working on revenue generating habits. As you move from wage slave to wage creator, having this habit will help you keep focus on generating revenue for yourself.

The next step in the process is to just track what you are doing and what time is spent doing it. Then at the end of the week, month, quarter and year, you can use this data to determine what amount of time was spent on billable versus non-billable tasks. I find that this can be immensely helpful to figuring out why I am not getting ahead in my dream career of public speaking, writing, and coaching.

One final piece of advice, make sure that you are assigning an appropriate amount of billable hours to the task before you start. For example, if you are going to write a blog post, assign forty-five minutes of billable hours to that post. If it takes an hour and thirty minutes to research and write, bill forty-five minutes.

Establishing standard billable time is another secret of lawyers that keep them on task and generating revenue. Establishing maximum time for completion on your tasks allows you to be more focused and realize that you can only generate so much revenue out of each assignment. To record in your time management system, take the blog post example. If I have forty-five minutes assigned to the post, but it takes me one hour. I assign forty five minutes as billable and fifteen minutes as non-billable “task slack” time.

What is the outcome and why are we doing this? This simple and quick process will have two lasting effects:

1. It will give us the data we need to establish an hourly billable rate for projects in the future and analyze our overall revenue generating effectiveness. For example, if we find that we make twenty thousand US dollars a year on revenue generating activities that used one thousand billable hours, then we know that our base billable rate for activities is twenty dollars an hour. We can then factor in our overhead costs over all hours to get a decent internal billing rate or what we pay ourselves for our projects. This can also be used for actual billing of clients, estimating project revenues, and establishing an internal rate of return (IRR) on our projects. For the truly brave, the data generated can be run through a lean six sigma project to improve our revenue generating processes…but that is another article
2. This helps us develop the habits we need to succeed. If we focus on revenue generating habits, then we set ourselves up to succeed. In Daniel Pinkwater’s book, “Fish Whistle”, he talks about the need for aspiring writers to set a time and place to write and stick to a schedule. This system allows us to track that schedule and make sure that the developing habit is building us a secure fiscal future.

Please let me know if you find this idea useful.