How to review a law firm invoice, step by step
Six checks, in the order that catches the most for the least effort, and what to do with what you find.
Most legal departments review outside counsel invoices the same way: someone who knows the matter skims the total, glances at the entries, and approves it. That catches the bill that is wildly off. It rarely catches the one that is quietly off: a rate that crept up, a partner doing associate work, an hour rounded up a dozen times.
A good review is not about reading harder. It is about checking the same things in the same order, against terms you have already agreed. Here is the order that catches the most for the least effort.
- 01IntakeRight matter, right entityMatched to matter 24-117
- 02BudgetSpend against the estimate62% of budget, 48% of work
- 03RatesEvery rate vs. the rate cardPartner billed $895, agreed $850
- 04StaffingWho did the workPartner share 41%, target 30%
- 05Time entriesNarratives and increments2 block-billed entries
- 06ExpensesAgainst the expense policyNothing outside policy
- Approve
- Reduce $4,180 and query 2 entries
- Reject
Before you start: have the terms in front of you
You cannot review a bill against terms you cannot see. For each firm, keep the engagement letter, the agreed rate card, any matter budget or estimate, and your billing guidelines in one place. If a firm has no written terms, that is the first finding: fix it before the next invoice. (Our guide to outside counsel billing guidelines covers what they should say.)
1. Intake: is this the right bill?
Confirm the matter number, the billing entity and the period covered. Check that the invoice has not already been paid, in whole or in part: duplicate submissions are more common than they should be, especially when firms resend after a query. Make sure the invoice itemizes time by timekeeper and date; a lump sum is not reviewable.
2. Budget: does the spend match the progress?
Compare cumulative fees to the budget or estimate, and compare that to how far the matter has actually progressed. A matter that has used most of its budget with most of the work still ahead needs a conversation now, not when the budget runs out.
3. Rates: is everyone billing what you agreed?
Check each timekeeper’s rate against the rate card. Look for new timekeepers who were never approved, rate increases applied without notice, and timekeepers billed at a higher band than their role. If you have a blended-rate cap, calculate the blended rate (total fees divided by total hours) for the period and compare.
4. Staffing: is the work at the right level?
Look at the mix of hours by seniority. Partners doing research, document review or scheduling, a parade of new associates each billing a few hours to get up to speed, or several lawyers attending the same call are all signs the matter is staffed above the level the work needs.
5. Time entries: can you tell what was done?
Read the narratives. Each entry should describe one task clearly enough that you could judge whether the time was reasonable. Watch for block billing, vague descriptions, clerical work, internal conferences billed by every attendee, and time recorded in larger increments than you agreed. The red flags guide walks through each one.
6. Expenses: is every charge allowed?
Check disbursements against your expense policy: no mark-ups, receipts above the agreed amount, prior approval where required, and nothing your guidelines exclude, such as overhead, meals or routine copying.
Then decide: approve, reduce or query
Every finding should end in one of three outcomes:
- Approve when the bill meets the terms, or the issue is small enough to note for next time.
- Reduce when a charge clearly breaks an agreed term: the excess over the rate card, an excluded expense, time you will not pay for.
- Query when you need the firm to explain or rewrite an entry before you can judge it.
Write down the reason for each reduction or query, citing the term it relates to. Firms respond far better to “entry on Sep 2 is block-billed, section 3.2 of our guidelines” than to an unexplained cut, and the record shows you which firms keep tripping the same wire.
Make it repeatable
The value of a review comes from doing it the same way every time. A checklist, a shared record of findings by firm, and a clear approval workflow turn a judgment call into a process, and make it obvious when a firm’s billing starts to drift.
Where QuarterHour fits
QuarterHour runs these checks automatically on every invoice, against the terms you negotiated with each firm, and traces every flag back to the line and page it came from. Your team keeps the decision; it just starts from a reviewed bill.