Q:  What are some best practices for claims adjusters and staff attorneys to follow when reviewing a legal invoice?

Answer: Concerned that modifying invoices may negatively impact the relationships they've established with their law firms, adjusters and staff attorneys rarely look forward to reviewing legal invoices. Although some may see it as such, bill review is not just about managing costs; it's one of the many important tools available for managing a case to an efficient resolution. It also helps to facilitate critical, ongoing communication between the client and firm.

Prior to working with any law firm, companies generally establish a set of billing guidelines that outline how the client and firm will work together. These guidelines usually include details such as how often to bill, what charges are billable and by which level of legal professional, and how expenses should be handled. If a law firm violates these mutually agreed-upon guidelines, it is fair to adjust the bills accordingly.

Following are five best-practice suggestions to assist you in the legal bill review process:

• Understand the nature of the case. Is it a complex case with multiple parties? What is the severity of the case? What venue is the case in and who is plaintiff's counsel? These are important cost drivers that will impact the activities performed on the case and without them, fair and reasonable bill review cannot be achieved.
• Take the time to understand the actual spend to date in relation to the established budget. What is the remaining budget and which activities have or have not been completed? Is the billing attorney sticking to the litigation plan and budget? Use the billing codes and their descriptions to see if the law firm is following the plan. Does it look like the case is going to run over budget? There could be a legitimate reason why the costs are out of scope - perhaps the plaintiff's attorney is dragging out the case. Regardless, if the case seems off-track, contact the firm to find out what is happening. Use the budget as a management tool to see the bigger picture and reassess the case. Are the activities being performed moving the case toward the desired resolution?
• Look at the current invoice and any other invoices already processed from this specific matter to review how many legal professionals have been working on this case. If there are multiple persons performing the same tasks, the reviewer may be entitled to adjust for duplication of effort or work. Look for different timekeepers reviewing or drafting the same documents and multiple persons attending the same meetings or events. Also, look closely for attorneys charging for non-billable, administrative activities such as organizing the file or copying documents for an upcoming deposition. Be sure to review individual activities - are they being completed in a reasonable amount of time by the right people?
• Use the automated rules engine in a legal spend management solution to assist in identifying guideline non-compliance. Since expectations were set with the billing guidelines prior to the case being assigned, the firm should strictly adhere to these guidelines. If they aren't, take action. Call the lead attorney and find out why their staff is not following the guidelines. Our clients have often found the activity descriptions to be too vague for the reviewer to clearly understand the activity performed and its value to the case. In this case, it's best to communicate this to the firm so that they can improve their process and in turn, the adjuster's efficiency. Use the codes or rule violations to see how the firm is billing particular activities and analyze whether or not these activities are moving the case towards the desired outcome.
• Apply your expertise to manage the case to an efficient resolution. The relationship between an adjuster or staff attorney with outside counsel is a partnership of equal responsibility. As long as it is not impeding a lawyer's independent judgment, feel empowered to ask questions and participate in the overall plan and daily activities on the case.

Remember that law firms are under pressure to bill for every minute of the day, but that, as an adjuster or staff attorney, it's your responsibility to do what's right for the case, your company and your company's client. Adjust invoices fairly and according to the guidelines established by the company and communicate when there is an issue. Invoice review isn't just about cutting costs - it's about managing a case - the invoice is just one way to assess how well it is being handled.