Non-billable hours: how many is too many?

Key takeaways

Non-billable hours are hours a fee earner works that cannot be charged to a client. Some are necessary, such as training and business development. The costly ones are admin hours that someone cheaper could do. Each of those is lost revenue at the full charge-out rate.

• 5 hours a week of admin at a £120 charge-out rate is £27,600 a year in lost billing.
• Split non-billable time into investment and admin before cutting anything.
• Admin is the part to move; training and selling are the part to protect.
• Track it for 2 weeks: most firms underestimate it.

What are non-billable hours?

Non-billable hours are working hours spent on activity that is not charged to a client, such as internal meetings, administration, training, marketing and proposals. Billable hours are those recorded against client work and invoiced. The ratio between the two is usually called utilisation.

• The hidden costs of doing everything in-house
• Staff utilisation rate: the cost of paid idle time

What do non-billable admin hours cost?

Non-billable admin costs the revenue those hours would have earned. A fee earner charged at £120 an hour who spends 5 hours a week on scheduling, filing and invoicing gives up £600 a week. Over 46 working weeks that is £27,600, assuming there is client work to fill the time.

The same 5 hours done by a managed admin team at an indicative £9–£18 per hour would cost roughly £2,100 to £4,100 a year.

• The opportunity cost of doing everything in-house
• Skilled staff stuck doing admin? What it costs you

Which non-billable hours are worth keeping?

Keep the non-billable hours that build future revenue or capability. Cut or move the ones that only keep the office running.

• Keep: business development, client relationships, training, supervision.
• Reduce: internal meetings, reporting nobody reads.
• Move: diary management, document formatting, data entry, invoice preparation, chasing.

How many non-billable hours are too many?

There is no single correct figure, because it depends on seniority and role. A partner who sells will bill less than an associate. The useful test is whether admin, as distinct from investment time, exceeds two or three hours a week per fee earner. Beyond that, the firm is paying senior rates for junior work.

• Run a time audit to find what to outsource

When does reducing them not pay?

Reducing non-billable hours pays only if the freed time is billed or used to win work. If fee earners are short of client work, moving their admin saves nothing and adds a cost. Check the pipeline before changing who does the admin.

• When not to outsource

Where do non-billable admin hours come from?

They come from gaps in support. When there is no one to book meetings, format documents, chase clients for information or prepare invoices, fee earners do it themselves because the work has to happen. Each task is small. Together they form a steady drain that is invisible on a timesheet unless there is a code for it.

The same pattern appears outside the professions, wherever one person's time is sold by the hour or the appointment.

• Clinicians doing admin: what it costs a private clinic
• Sales team admin time: what it costs in lost selling

What mistakes do firms make with billable targets?

Firms often push on targets when the constraint is support.

• Raising billable targets without removing admin.
• Counting business development as waste.
• Hiring another fee earner when existing ones are under-supported.
• Measuring hours recorded instead of hours invoiced.
• Ignoring write-offs caused by rushed or interrupted work.

How quickly should the change pay back?

Moving admin off fee earners should pay back within one or two billing cycles if there is client work waiting. Track three numbers for 90 days: billable hours per fee earner, admin hours per fee earner and the cost of the support that replaced them. If billable hours have not risen, either the pipeline was the real constraint or the admin has not truly moved.

What does this look like in practice?

A pattern we see in UK accountancy and brokerage firms: fee earners chase clients for documents themselves, because they know which ones are missing. A simple tracker and a managed team doing the chasing returns several hours a week per person in the busiest months.

Across our client work, back-office cost per task has fallen by 42% once the process was written down and run by a managed team.

• See client work
• BPO Solutions for UK businesses

Non-billable hours checklist

Use this over a fortnight.

• Record all time, billable or not, for two weeks.
• Tag non-billable time as investment, internal or admin.
• Total admin hours per fee earner.
• Value them at charge-out rate.
• Pick the largest admin task and write its steps.
• Move it and track billable hours for 90 days.

• The hidden cost audit: score your business in an hour

Next step

Send us a rough split of a fee earner's week. We will show what the admin share is worth and what could move in a 30-minute call.