Legal Fee Audits

Legal fee audits are at the core of everything we do. Whether providing expert opinions, managing complex litigation, resolving a fee dispute or budgeting for future costs—it all begins with a careful evaluation and understanding of legal spend. We have extensive experience auditing and evaluating the reasonableness of legal fees and expenses.  We use those audits to identify opportunities for potential recoupment of fees or to develop strategies for addressing legal spending moving forward.

Our Typical Audit Process
  • Interview clients and review materials from all underlying legal matters to develop a factual context for the analysis of the fees at issue, working with clients to develop confidentiality agreements to address concerns about confidentiality and attorney-client privilege.
  • Reconcile all electronic and paper invoices to identify mathematical or accounting errors and to ensure that discounts are properly addressed.
  • Research the background and experience of relevant timekeepers to determine whether the timekeeper is being utilized appropriately.
  • Categorize all fees and expenses in a way that identifies the associated work effort.
  • Map and quantify the legal spend across all firms and vendors, and then evaluate the legal spend in the context of reasonableness guidelines and market norms. Rather than relying upon computer flags and formulaic word searches, LFA relies upon our real world experience when determining whether something is problematic.
  • Prepare a detailed and comprehensive report that identifies any legal fees or expenses that appear unreasonable and provide practical strategies to recoup past overspend or limit future problems.

Representative Experience

  • Evaluated over $300 million incurred defending product liability claims brought against pharmaceutical manufacturer, to determine whether the costs were reasonable, related to the defense of covered claims, and otherwise recoverable under various insurance policies.
  • Evaluated multiple matters defended by a law firm over a five-year period to evaluate the validity of fraud allegations made concerning the law firm’s billing practices.
  • Evaluated approximately $8 million in costs a pharmaceutical company paid to outside counsel in connection with patent litigation, to determine whether costs were reimbursable pursuant to licensing agreement.
  • Evaluated approximately $2 million a Fortune 500 company paid to outside counsel as part of alternative fee arrangement, to determine whether company received cost-effective legal representation under alternative fee arrangement, and whether alternative fee arrangement should be modified or extended.
  • Evaluated approximately $3 million an insurer paid to insured-selected counsel over a 5-year period to determine whether the fees were reasonable and otherwise complied with agreed-to billing guidelines.
  • Evaluated approximately $2 million a privately-held company paid to outside counsel prosecuting trade secret claims, to determine whether the fees were reasonable and were otherwise properly reimbursable.
  • Evaluated approximately $30 million in fees incurred by insured-selected counsel defending shareholder derivative litigation and an SEC investigation following a restatement of earnings, to determine whether the fees were reasonable and related to the defense of covered claims.
  • Evaluated approximately $6 million incurred by insured-selected counsel defending various legal malpractice claims, to determine whether the fees were reasonable and related to the defense of covered claims.