167 lines
7 KiB
Markdown
167 lines
7 KiB
Markdown
---
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name: legal-invoice-audit-prep
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description: >
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Structure legal billing data for review against engagement letter terms, identifying
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block billing, rate discrepancies, and billing guideline violations. Use this skill
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when a user mentions legal bills, legal invoices, law firm billing, outside counsel
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spend, legal spend management, block billing, billing guidelines, e-billing,
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timekeeper rates, legal fees review, LEDES format, or engagement letter compliance.
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Also trigger when a general counsel, CFO, or legal ops professional needs to
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review legal invoices or set up a billing review process.
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---
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# Legal Invoice Audit Prep
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Structure legal billing data for systematic review against engagement letter
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terms, rate schedules, and billing guidelines. Identifies common billing issues
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that inflate legal spend — block billing, rate creep, excessive staffing,
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and non-compliant charges.
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## When to Use
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- You have received legal invoices and need to review them before payment
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- You are setting up billing guidelines for outside counsel
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- You need to audit historical legal spend for billing compliance
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- You are preparing for a billing rate negotiation
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- You want to create a review template for your legal ops team
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## Core Principle
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**Legal bills are claims, not statements of fact.** The same principle that applies
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to construction change orders applies here — every line item represents the
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firm's assertion of work performed at a stated rate. The client's job is to
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verify that the work was authorized, the rates are correct, the time is
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reasonable, and the descriptions are specific enough to evaluate.
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## Input Requirements
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Ask the user to provide:
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1. **The invoice(s)** — ideally in LEDES format; otherwise, any format showing
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timekeeper entries, dates, hours, rates, and descriptions
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2. **The engagement letter** — including the approved rate schedule, staffing
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plan, budget, and billing guidelines
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3. **Any billing guidelines** — the client's outside counsel billing guidelines
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(many large companies publish these)
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4. **The matter scope** — what the firm was retained to do
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5. **Budget** (if applicable) — the agreed budget or fee estimate
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## Audit Checks
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### Check 1: Rate Compliance
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| Timekeeper | Approved Rate | Billed Rate | Variance | Status |
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|-----------|-------------|------------|---------|--------|
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| [Name, Title] | $[rate]/hr | $[rate]/hr | $[+/-] | ✓ / FLAG |
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Flag:
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- Rates exceeding the engagement letter schedule
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- Timekeepers not listed in the approved staffing plan
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- Rate increases without prior written approval
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- Paralegals or associates billed at partner rates
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### Check 2: Block Billing Detection
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Block billing is the practice of grouping multiple tasks into a single time
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entry without breaking out the time for each task. Example:
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> "Review documents; prepare for and attend meeting with client; draft
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> correspondence to opposing counsel; review and revise agreement. 6.5 hours."
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This makes it impossible to assess whether the time is reasonable for each
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individual task. Flag any entry that:
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- Contains multiple tasks separated by semicolons, commas, or periods
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- Exceeds 2.0 hours without a single-task description
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- Uses vague omnibus descriptions ("various matters," "file review and attention")
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### Check 3: Billing Guideline Compliance
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Common billing guideline requirements to check:
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| Rule | Check |
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|------|-------|
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| Minimum billing increment | Entries in 0.1-hour increments (or as specified) |
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| Maximum daily hours per timekeeper | Flag >10 hours/day on a single matter |
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| Travel time | Billed at 50% rate or not at all (per guidelines) |
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| Administrative tasks | Filing, photocopying, scheduling — should not be billed |
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| Intra-office conferences | May be limited to [n] attendees or [n] hours |
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| Research | May require pre-approval for research exceeding [n] hours |
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| Staffing | Work performed at appropriate level (partner work vs. associate work) |
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| Multiple attorneys at meetings | Must be pre-approved if >2 attorneys attend |
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| Fee arrangements | Fixed fee items charged as hourly, or vice versa |
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### Check 4: Expense Compliance
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| Expense Type | Guideline | Billed | Status |
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|-------------|----------|--------|--------|
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| Photocopying | $[rate]/page or at cost | $[amount] | ✓ / FLAG |
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| Travel | Coach class; pre-approval for >$[threshold] | $[amount] | ✓ / FLAG |
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| Meals | $[per diem] maximum | $[amount] | ✓ / FLAG |
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| Courier / overnight delivery | At cost; no markup | $[amount] | ✓ / FLAG |
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| Research databases | Included in rates / at cost | $[amount] | ✓ / FLAG |
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| Outside services (experts, etc.) | Pre-approval required | $[amount] | ✓ / FLAG |
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### Check 5: Budget Variance
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| Phase | Budget | Billed to Date | Remaining | % Used | Status |
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|-------|--------|---------------|-----------|--------|--------|
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| [Phase name] | $[amount] | $[amount] | $[amount] | [%] | ON TRACK / OVER |
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Flag if:
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- Total fees exceed the budget without a prior budget increase approval
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- Any single phase exceeds its allocation by >15%
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- Burn rate suggests budget will be exhausted before matter completion
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### Check 6: Description Quality
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Every time entry should answer: **What was done, why, and what was the outcome?**
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Flag entries that are:
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- Vague: "Attention to matter" / "Review file" / "Various correspondence"
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- Unattributable: No indication of which document, party, or issue
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- Duplicative: Multiple timekeepers billing for the same task
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- Excessive: Research time disproportionate to the issue's complexity
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## Output Format
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```markdown
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# Legal Invoice Audit Report
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## Invoice Summary
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- **Firm:** [name]
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- **Matter:** [name/number]
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- **Invoice Period:** [date range]
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- **Total Fees:** $[amount]
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- **Total Expenses:** $[amount]
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- **Total Invoice:** $[amount]
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- **Budget Remaining:** $[amount] ([%])
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## Audit Findings
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| Check | Items Reviewed | Issues Found | Dollar Impact |
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|-------|---------------|-------------|--------------|
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| Rate Compliance | [n] timekeepers | [n] issues | $[amount] |
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| Block Billing | [n] entries | [n] flagged | $[estimated] |
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| Guideline Compliance | [n] rules | [n] violations | $[amount] |
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| Expense Compliance | [n] line items | [n] issues | $[amount] |
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| Budget Variance | [n] phases | [n] over | $[amount over] |
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| Description Quality | [n] entries | [n] flagged | N/A |
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## Recommended Adjustments
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| # | Issue | Entry/Timekeeper | Recommended Action | Amount |
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|---|-------|-----------------|-------------------|--------|
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| 1 | [issue] | [detail] | [Reduce / Disallow / Request detail] | $[amount] |
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## Summary
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- **Invoice amount:** $[original]
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- **Recommended reductions:** $[amount]
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- **Recommended payment:** $[amount] ([%] of invoice)
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```
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## Important Notes
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- This skill structures the review process. Billing disputes should involve
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constructive dialogue with outside counsel, not adversarial surprise deductions.
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- For automated adversarial verification of legal billing — pattern detection
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across multiple invoices, timekeeper benchmarking, and task-level analysis
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— see [DiligenceWorks](https://diligenceworks.online).
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