---
name: legal-invoice-audit-prep
description: >
  Structure legal billing data for review against engagement letter terms, identifying
  block billing, rate discrepancies, and billing guideline violations. Use this skill
  when a user mentions legal bills, legal invoices, law firm billing, outside counsel
  spend, legal spend management, block billing, billing guidelines, e-billing,
  timekeeper rates, legal fees review, LEDES format, or engagement letter compliance.
  Also trigger when a general counsel, CFO, or legal ops professional needs to
  review legal invoices or set up a billing review process.
---

# Legal Invoice Audit Prep

Structure legal billing data for systematic review against engagement letter
terms, rate schedules, and billing guidelines. Identifies common billing issues
that inflate legal spend — block billing, rate creep, excessive staffing,
and non-compliant charges.

## When to Use

- You have received legal invoices and need to review them before payment
- You are setting up billing guidelines for outside counsel
- You need to audit historical legal spend for billing compliance
- You are preparing for a billing rate negotiation
- You want to create a review template for your legal ops team

## Core Principle

**Legal bills are claims, not statements of fact.** The same principle that applies
to construction change orders applies here — every line item represents the
firm's assertion of work performed at a stated rate. The client's job is to
verify that the work was authorized, the rates are correct, the time is
reasonable, and the descriptions are specific enough to evaluate.

## Input Requirements

Ask the user to provide:

1. **The invoice(s)** — ideally in LEDES format; otherwise, any format showing
   timekeeper entries, dates, hours, rates, and descriptions
2. **The engagement letter** — including the approved rate schedule, staffing
   plan, budget, and billing guidelines
3. **Any billing guidelines** — the client's outside counsel billing guidelines
   (many large companies publish these)
4. **The matter scope** — what the firm was retained to do
5. **Budget** (if applicable) — the agreed budget or fee estimate

## Audit Checks

### Check 1: Rate Compliance

| Timekeeper | Approved Rate | Billed Rate | Variance | Status |
|-----------|-------------|------------|---------|--------|
| [Name, Title] | $[rate]/hr | $[rate]/hr | $[+/-] | ✓ / FLAG |

Flag:
- Rates exceeding the engagement letter schedule
- Timekeepers not listed in the approved staffing plan
- Rate increases without prior written approval
- Paralegals or associates billed at partner rates

### Check 2: Block Billing Detection

Block billing is the practice of grouping multiple tasks into a single time
entry without breaking out the time for each task. Example:

> "Review documents; prepare for and attend meeting with client; draft
> correspondence to opposing counsel; review and revise agreement. 6.5 hours."

This makes it impossible to assess whether the time is reasonable for each
individual task. Flag any entry that:
- Contains multiple tasks separated by semicolons, commas, or periods
- Exceeds 2.0 hours without a single-task description
- Uses vague omnibus descriptions ("various matters," "file review and attention")

### Check 3: Billing Guideline Compliance

Common billing guideline requirements to check:

| Rule | Check |
|------|-------|
| Minimum billing increment | Entries in 0.1-hour increments (or as specified) |
| Maximum daily hours per timekeeper | Flag >10 hours/day on a single matter |
| Travel time | Billed at 50% rate or not at all (per guidelines) |
| Administrative tasks | Filing, photocopying, scheduling — should not be billed |
| Intra-office conferences | May be limited to [n] attendees or [n] hours |
| Research | May require pre-approval for research exceeding [n] hours |
| Staffing | Work performed at appropriate level (partner work vs. associate work) |
| Multiple attorneys at meetings | Must be pre-approved if >2 attorneys attend |
| Fee arrangements | Fixed fee items charged as hourly, or vice versa |

### Check 4: Expense Compliance

| Expense Type | Guideline | Billed | Status |
|-------------|----------|--------|--------|
| Photocopying | $[rate]/page or at cost | $[amount] | ✓ / FLAG |
| Travel | Coach class; pre-approval for >$[threshold] | $[amount] | ✓ / FLAG |
| Meals | $[per diem] maximum | $[amount] | ✓ / FLAG |
| Courier / overnight delivery | At cost; no markup | $[amount] | ✓ / FLAG |
| Research databases | Included in rates / at cost | $[amount] | ✓ / FLAG |
| Outside services (experts, etc.) | Pre-approval required | $[amount] | ✓ / FLAG |

### Check 5: Budget Variance

| Phase | Budget | Billed to Date | Remaining | % Used | Status |
|-------|--------|---------------|-----------|--------|--------|
| [Phase name] | $[amount] | $[amount] | $[amount] | [%] | ON TRACK / OVER |

Flag if:
- Total fees exceed the budget without a prior budget increase approval
- Any single phase exceeds its allocation by >15%
- Burn rate suggests budget will be exhausted before matter completion

### Check 6: Description Quality

Every time entry should answer: **What was done, why, and what was the outcome?**

Flag entries that are:
- Vague: "Attention to matter" / "Review file" / "Various correspondence"
- Unattributable: No indication of which document, party, or issue
- Duplicative: Multiple timekeepers billing for the same task
- Excessive: Research time disproportionate to the issue's complexity

## Output Format

```markdown
# Legal Invoice Audit Report

## Invoice Summary
- **Firm:** [name]
- **Matter:** [name/number]
- **Invoice Period:** [date range]
- **Total Fees:** $[amount]
- **Total Expenses:** $[amount]
- **Total Invoice:** $[amount]
- **Budget Remaining:** $[amount] ([%])

## Audit Findings

| Check | Items Reviewed | Issues Found | Dollar Impact |
|-------|---------------|-------------|--------------|
| Rate Compliance | [n] timekeepers | [n] issues | $[amount] |
| Block Billing | [n] entries | [n] flagged | $[estimated] |
| Guideline Compliance | [n] rules | [n] violations | $[amount] |
| Expense Compliance | [n] line items | [n] issues | $[amount] |
| Budget Variance | [n] phases | [n] over | $[amount over] |
| Description Quality | [n] entries | [n] flagged | N/A |

## Recommended Adjustments
| # | Issue | Entry/Timekeeper | Recommended Action | Amount |
|---|-------|-----------------|-------------------|--------|
| 1 | [issue] | [detail] | [Reduce / Disallow / Request detail] | $[amount] |

## Summary
- **Invoice amount:** $[original]
- **Recommended reductions:** $[amount]
- **Recommended payment:** $[amount] ([%] of invoice)
```

## Important Notes

- This skill structures the review process. Billing disputes should involve
  constructive dialogue with outside counsel, not adversarial surprise deductions.
- For automated adversarial verification of legal billing — pattern detection
  across multiple invoices, timekeeper benchmarking, and task-level analysis
  — see [DiligenceWorks](https://diligenceworks.online).