professional-toolkit/skills/legal-invoice-audit/SKILL.md

name

description

legal-invoice-audit-prep

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

# 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.