Digital White Papers

I L T A W H I T E P A P E R & S U R V E Y R E S U L T S | L I T I G A T I O N A N D P R A C T I C E S U P P O R T & C O R P O R A T E L E G A L D E P A R T M E N T S 35 • Rate book maintenance, approvals and checks. • Compliance flag false positive and false negative hit rates. • Reporting capability, report generation and flexibility. However, even if the system in place does not provide some or all of the aforementioned features or if the organization is not in a position to upgrade to a system that does, an external legal invoice auditing vendor can bridge the gap. The vendor can act as a partner to the organization's legal team, assisting in developing billing guidelines as well as invoice flow and audit system checks and logic. These vendors need to be capable of handling multiple types of billing systems, leveraging the benefits and mitigating the drawbacks of each. Whether the client's invoices are paper based or domiciled within the client's systems, the vendor will need to work with the client to develop a playbook that allows invoices to be reviewed in a timely fashion to identify and escalate noncompliant entries as early as possible. The vendor performs the audit as a member of the team or as part of the workflow hierarchy and can leverage the available system as well as its own resources to audit invoices for the application or removal of reduction flags, review task entries for redundancy or other guideline noncompliance, as well as liaising with the managing attorney on compliance findings, thereby freeing up the client's internal team capacity. Once the billing guidelines and the ELM/ audit software capabilities are analyzed and understood, there are two primary paths to implementing a legal invoice audit program: the first is retrospective (forensic), and the second is concurrent (real time). Retrospective review often makes sense when the client's resources are limited, but the client would still like to understand its law firms' billing behavior and raise any clear violations with outside vendors for potential refund or credit. If excessive budget increases have been observed, or the managing attorney notices a rise in spending, closer scrutiny can uncover if this is unique to a specific case or a trend across matters handled by the firm. A component of the retrospective review may be to leverage statistical sampling to allow the client to gain an understanding of spend across matters, firms or the department without allocating the time and resources to audit every invoice paid. The statistical sampling plan can be tailored to the organization's risk and accuracy tolerance levels – a larger sample being required for higher accuracy. Such a review provides a snapshot of the potential financial opportunity and the level of firm compliance with the billing guidelines, the findings of which may be the basis "There are two primary paths to implementing a legal invoice audit program: the first is retrospective (forensic), and the second is concurrent (real time)."

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