Billable vs Non Billable Hours
Billable hours are client work that can usually be charged. Non billable hours support the business but are not usually invoiced directly. This guide explains the difference, examples, and how to track both accurately.
Billable hours are hours spent on client work that can be charged to a client.
Non billable hours are work hours that cannot usually be charged directly to a client, even though they may still be important to the business.
The difference matters because professional services firms need to understand how time is spent, what work creates revenue, and where valuable work may be missed.
Simple example A lawyer reviewing a contract for a client is usually doing billable work.The same lawyer attending an internal firm training session is usually doing non billable work.Both may be necessary. Only one is usually charged to the client.
What Are Billable Hours?
Billable hours are hours spent on work that can be invoiced to a client. In a law firm, billable hours may include legal research, client calls, contract review, matter-related emails, drafting, court preparation, discovery review, or negotiation preparation.
In other professional services firms, billable hours may include consulting work, accounting work, audit support, client implementation work, technical services, or client project delivery.
👉 The key question is: did this work directly support a client matter, project, case, or engagement? If the answer is yes and the client agreement allows it, the time may be billable.
What Are Non Billable Hours?
Non billable hours are work hours that are not usually charged directly to a client.
Non billable work may still be valuable. It often supports the firm's operations, growth, people, systems, or long term quality.
Examples include internal meetings, training, marketing, business development, administration, recruiting, internal reporting, general research, and software setup.
Non billable does not mean useless. It means the time is not usually invoiced to a client.
Billable vs Non Billable Hours: Main Difference
The main difference is whether the work can be charged to a client. Billable hours are connected to client work and may become revenue. Non billable hours support the business but are not usually invoiced directly.
Billable
Reviewing a contract for a client
Preparing a client report
Attending a client strategy call
Non billable
Joining a general firmwide meeting
Updating an internal process document
Attending internal software training
The distinction depends on the client agreement, billing policy, matter type, and work performed.
Examples
Billable Hours Examples
Common billable work examples include:
Client meetings
Client calls
Matter related emails
Legal research
Document drafting
Contract review
Discovery review
Court preparation
Case strategy
Preparing legal advice
Reviewing evidence
Drafting pleadings
Preparing client deliverables
Consulting analysis
Tax preparation
Audit work
Technical implementation
Client project reporting
The work should be connected to a client outcome.
Non Billable Hours Examples
Common non billable work examples include:
Internal team meetings
General administration
Training
Recruiting
Marketing
Business development
Internal reporting
Firm management
Internal software setup
Knowledge sharing
Performance reviews
General research not tied to a client matter
Updating internal templates
Practice development
Company planning
Some non billable work may later support billable work indirectly, but it is not usually charged to a specific client.
Billable vs Non Billable Hours in Law Firms
Law firms need to separate billable and non billable time clearly because client billing depends on accurate time records.
Billable legal work
Reviewing a client contract, drafting a motion, preparing for a hearing, conducting matter research, reviewing discovery, joining a client call, or preparing negotiation strategy.
Non billable legal work
Internal training, general firm administration, marketing activities, recruiting interviews, internal knowledge sharing, practice group meetings, or updating internal templates.
Some activities can be either billable or non billable depending on the context. A meeting about a specific client matter may be billable. A general internal department meeting is usually non billable.
Why the Difference Matters
The difference between billable and non billable time matters because it affects revenue, profitability, staffing, pricing, and client transparency.
Firms need to know:
How much client work is being performed
How much work is being missed
How much time is spent on internal operations
Which clients or matters require the most effort
Whether pricing is realistic
Whether lawyers or professionals are overloaded
Whether too much time is being lost to administration
Without clear time tracking, a firm may not know whether it is profitable, efficient, or underbilling completed work.
Why Billable Time Gets Missed
Billable time often gets missed because work happens across too many places.
A lawyer may review a document, answer a matter related email, attend a calendar meeting, research a legal issue, and speak with a client, all before lunch. By the time the lawyer enters time, small tasks may be forgotten.
Time is entered too late
Manual timers are not started
Short calls are forgotten
Calendar meetings are not reviewed
Document work is not captured
Emails are reconstructed from memory
Descriptions are written too quickly
Lawyers switch between matters throughout the day
The firm relies on manual timesheets
Missed billable time is especially dangerous because the work was already done. The firm simply fails to capture it.
Why Non Billable Time Should Still Be Tracked
Some firms only focus on billable time, but non billable time also matters.
Tracking non billable time helps firms understand administrative workload, training investment, business development effort, internal management cost, software and process friction, recruiting time, operational inefficiency, utilization, and workload balance.
For example, if lawyers spend too much time on administrative work, the firm may need better processes, better staffing, or better tools.
Non billable time is not automatically bad. But if it is invisible, the firm cannot manage it.
Billable and Non Billable Time in Client Agreements
Whether time is billable often depends on the client agreement. Some clients allow certain types of work. Some clients restrict internal meetings, travel time, research time, administrative tasks, or communication between lawyers.
Some clients require task codes, activity codes, detailed descriptions, or outside counsel guideline compliance. This means two similar tasks may be treated differently depending on the client.
A law firm should always follow the client's billing rules and matter agreement.
Examples of Work That Can Be Either Billable or Non Billable
Some tasks are not automatically billable or non billable. Context matters.
Meetings | A client strategy meeting may be billable. A general internal team meeting is usually non billable. |
Research | Legal research for a client matter may be billable. General research for professional development is usually non billable. |
Emails | Matter related client emails may be billable. Internal administrative emails are usually non billable. |
Travel | Travel may be billable, partially billable, or non billable depending on the client agreement. |
Training | Client specific training required for a matter may be billable in some cases. General firm training is usually non billable. |
Billable vs Non Billable Hours and Utilization
Billable utilization measures how much working time is spent on billable work.
Weekly hours
40 total hours worked
Billable hours
28 hours are billable
Non billable hours
12 hours are non billable
Utilization rate 28 divided by 40 = 70 %
Utilization helps firms understand how time is being used, but it should be interpreted carefully. A high billable utilization rate can indicate strong client work. A low billable utilization rate can indicate too much administrative time, weak demand, poor staffing, or heavy investment in non billable initiatives.
Not all non billable time is waste. Some non billable work builds the firm.
Billable vs Non Billable Hours and Profitability
Profitability depends on more than the number of billable hours. A firm also needs to understand billing rates, realization, write offs, staffing mix, matter budgets, client agreements, non billable workload, time entry quality, and invoice review delays.
A firm may have many billable hours but still lose profitability if too much time is written off or if billing descriptions are unclear.
Clear time tracking helps firms understand where the problem starts.
How to Track Billable and Non Billable Hours
A good time record should capture both billable and non billable work. For each entry, firms should track:
Date
Timekeeper
Client or matter, if applicable
Work description
Duration
Billable or non billable status
Task or activity code, if required
Review status
Billing status
The goal is to create a clear record of how work was performed. This is where legal timekeeping software and legal time entry software can help.
Good Billable Time Entry Examples
Weak | Better |
Reviewed documents. | Reviewed revised purchase agreement and analyzed indemnity and termination provisions for client comments. |
Call with client. | Joined client call to discuss discovery timeline, document production issues, and next steps for response strategy. |
Research. | Researched enforceability of non compete provisions under applicable state law for employment agreement review. |
Clear descriptions help billing reviewers and clients understand the value of the work.
Good Non Billable Time Entry Examples
Weak | Better |
Admin. | Updated internal matter checklist for litigation intake process. |
Training. | Attended internal training on new document management workflow. |
Meeting. | Joined internal practice group meeting to review staffing and workload planning. |
Tracking non billable time clearly helps the firm understand internal cost and operational patterns.
Common Mistakes with Billable and Non Billable Hours
Not tracking non billable time at all
Entering billable time too late
Using vague descriptions
Putting time under the wrong matter
Treating every internal meeting as billable
Forgetting short client tasks
Not reviewing calendar events
Ignoring client billing guidelines
Using manual timers inconsistently
Failing to review entries before billing
The biggest issue is often not whether people understand the difference. It is whether the firm captures the time accurately when the work happens.
Best Practices for Managing Billable and Non Billable Time
Track time daily
Record work as close to the activity as possible
Use clear descriptions
Separate billable and non billable work
Review calendar activity
Capture short tasks before they are forgotten
Follow client billing guidelines
Use task and activity codes when required
Review entries before billing
Analyze non billable time for process improvement
Use software that fits the daily workflow
A good process should help professionals capture time accurately without adding unnecessary friction.
How Technology Helps
Timekeeping software can help firms capture billable and non billable time more accurately.
Capturing activity from daily work tools
Reviewing time entries before billing
Tracking calendar based work
Improving descriptions
Supporting billable and non billable classification
Connecting entries to clients or matters
Reducing manual reconstruction
Releasing approved time to finance or billing systems
The goal is not simply to track more hours. The goal is to create a more accurate and useful record of work. Learn more about billable time tracking and automated time tracking for lawyers.
For a connected workflow, explore Billable Time Tracking for Law Firms.
Billable vs Non Billable Hours Summary
Billable hours are client related hours that can usually be charged. Non billable hours are work hours that support the business but are not usually invoiced directly.
Both matter. Billable time affects revenue. Non billable time affects operations, capacity, profitability, and firm management.
The best firms understand both types of time and track them accurately.
Related Resources
What is the difference between billable and non billable hours?
Billable hours are spent on client work that can usually be charged to the client. Non billable hours are spent on work that supports the business but is not usually charged directly to a client.
What are examples of billable hours?
Examples of billable hours include client calls, legal research, document drafting, contract review, discovery review, court preparation, consulting work, audit work, and client project delivery.
What are examples of non billable hours?
Examples of non billable hours include internal meetings, training, marketing, administration, business development, recruiting, internal reporting, and general firm management.
Are internal meetings billable or non billable?
It depends on the meeting. A meeting directly related to a client matter may be billable if the client agreement allows it. A general internal meeting is usually non billable.
Should law firms track non billable hours?
Yes. Tracking non billable hours helps law firms understand administrative workload, training time, business development effort, operational cost, and utilization.
Why do billable hours get missed?
Yes. Non billable work can support training, firm growth, operations, marketing, recruiting, and management. It is not necessarily waste.
Can non billable work still be valuable?
Yes. Non billable work can support training, firm growth, operations, marketing, recruiting, and management. It is not necessarily waste.
How can firms track billable and non billable time more accurately?
Firms can track time more accurately by recording time daily, using clear descriptions, reviewing calendar activity, capturing short tasks, following client billing rules, and using timekeeping software that fits daily workflows.
