Designing a legal invoice approval workflow
Who should see which bill, how thresholds and flags change the route, and how to keep approvals fast without waving bills through.
In many legal departments, invoice approval is whoever happens to own the relationship with the firm, clicking approve when they get to it. It works until it does not: bills sit in inboxes, nobody checks the rates, and the same issues recur because nobody is tracking them.
A good approval workflow answers three questions for every bill: who needs to see it, what each of them is responsible for checking, and how long they have. Try the example below to see how one policy routes different invoices.
- Invoice arrivesAP inbox or e-billing
- Automated auditEvery bill, every line
- Legal ops reviewResolves flags with the firm
- Matter ownerConfirms the work was done
- GC or CFOSkipped
- Approved to paySent to AP
Flags found: legal ops resolves them with the firm before the matter owner is asked to approve.
Separate the two jobs
Every legal invoice needs two different kinds of review:
- Compliance: does the bill follow the agreed terms? Rates, staffing, increments, expenses and format. This is detailed, rules-based work, and it is the same for every matter.
- Substance: was this work actually needed and done? Only the person who owns the matter can judge that.
Asking a busy matter owner to do both usually means neither gets done well. Put compliance checking first, by legal operations, AP or automation, so the matter owner sees a bill that already meets the terms and only has to answer the question they are best placed to answer.
Set thresholds by risk
Not every bill needs the same attention. A simple tiered policy keeps small, clean invoices moving and puts senior eyes where the money is:
- Small and clean: approved once the compliance check passes, with the matter owner informed.
- Standard: one approval from the matter owner.
- Large: a second approval from the general counsel or CFO above a set amount.
- Flagged: any bill with a compliance issue goes to legal operations to resolve with the firm before anyone approves it.
The right amounts depend on your spend and your appetite for risk. What matters is that they are written down and applied the same way to every firm.
Decide how flagged bills are handled
The workflow should say what happens when a check fails. Typically legal operations raises the issue with the firm, citing the relevant term, and either agrees a reduction or gets a corrected invoice. Two rules keep this fair and fast: pay the undisputed amount on time, and give the firm a set number of days to respond. Both belong in your billing guidelines, so they are agreed before the first dispute rather than argued during it.
Keep cycle times short
A careful workflow that takes six weeks frustrates firms and damages relationships. Set a target for each step, send reminders before it is missed, and let approvers act from wherever they already work, whether that is email, the AP system or a matter-management tool, rather than another portal to log in to.
Record every decision
Keep a record of what was approved, reduced or queried, by whom, and why. Over a year, that record tells you which firms follow their terms, which issues come up most, and which billing guidelines need tightening.
Where QuarterHour fits
QuarterHour does the compliance step on every invoice as it arrives, and sends the result, with the evidence, to whoever your workflow says should see it next. The approval rules are configured to your thresholds and approvers, inside the tools your team already uses.