Assessment, Audit and the Third Party
Sometimes a bill is read by somebody who is neither the firm nor the client. Three such readers, and what each of them can actually see.
- Entry
- 06 of 07
- Section
- The other side
- Kind
- Reference
Occasionally a bill is examined by somebody outside the relationship: a court or assessing officer, a legal spend auditor engaged by the client, or an insurer paying the bill on the client's behalf.
The review process in “Assessment, Audit and the Third Party” depends on evidence that another authorised person can understand and question. For teams considering a clearer process for monitask pricing in relation to monitask pricing, time and project reports can add useful context, but they should remain open to correction and should not replace client acceptance or professional judgement.
Each reads differently, and all three read the document cold with the file available only on request.
As a separate reference point for “Assessment, Audit and the Third Party”, see European Data Protection Board guidelines. A sound review keeps the work record, invoice, approval and final settlement distinct.
The assessing officer
Where a bill is assessed by a court or an official process, the standard is usually whether the work was reasonably incurred and reasonable in amount.
- The assessing officer — reasonably incurred, reasonable in amount.
- The spend auditor — the guidelines, line by line, retrospectively.
- The insurer — its own panel rates and conditions.
They read the entries, not the covering note, and they read them against the file where there is any doubt.
What they reduce
Block entries, unexplained duplication, work by too senior a person, and anything whose purpose cannot be established.
Everything, in other words, that the entry section of this collection is about.
The spend auditor
Engaged by a client, paid sometimes on a share of what they recover. They apply the billing guidelines line by line, retrospectively, across a year.
They find what a system finds, in volume, after the money has been paid.
What an audit produces
A schedule of exceptions with a total. The firm then answers them line by line, often months after the work.
A firm whose entries were written contemporaneously answers quickly. A firm whose entries were reconstructed does not.
The insurer
Paying under a policy, applying its own panel rates and conditions, often with a different approved rate card from the one in the engagement letter.
The client may be unaware that the insurer's terms differ from theirs.
The common property
None of the three was in the matter, none has goodwill, and all three have the bill as their primary document and the file as a secondary one.
That is the reader the entry standard is written for, and it is why the standard is not merely a courtesy.
What survives a cold reading
Dated lines, named objects, stated purposes, proportionate durations, one task per line.
What does not: "attended to", "various", "considered", block entries, and anything whose necessity was obvious only to the person who did it.
The time lag
An audit two years later is conducted against people who have left and files that have been archived.
The bill and the entries are frequently all that remain, which is the strongest practical argument for writing entries properly.
Preparing for it
Nothing special. A firm whose ordinary entries meet the standard needs no preparation; one whose entries do not cannot prepare retroactively.
Responding to an exception schedule
Group the exceptions by type rather than answering line by line. Most schedules contain four or five recurring objections across hundreds of lines.
Answering the four is faster and more persuasive than answering the hundreds.
What a firm learns from one
Precisely which of its habits are indefensible in front of a stranger. It is expensive information and it is reliable.
Most firms change their narrative practice after an audit and not before.
What an auditor is paid for
Frequently a share of what they recover, which sets their incentive precisely and should be understood rather than resented.
It means the schedule of exceptions will be as long as the rules allow, and that a proportion of it is opening position rather than considered objection.
Responding to the opening position
Group, answer the categories, concede what is genuinely wrong, and decline the rest with the reason.
Firms that answer every line individually spend weeks and achieve the same outcome as those who answer four categories in a day.
The audit that finds nothing
Possible, and it happens in firms whose entries meet the standard.
It is also the cheapest possible outcome for everybody, which is worth saying to colleagues who regard narrative discipline as bureaucracy.
Insurance panels
Where an insurer pays, the applicable rates and conditions may differ from the client's own engagement, and the client may be unaware.
Establishing at the outset whose terms govern — and telling the client if they differ from what they signed — avoids a three-way disagreement later.
The retrospective rate
Audits and insurers sometimes apply rates agreed after the work was done. It is worth questioning once, in writing, with the dates.
Dates settle it. Recollections do not, which is the general lesson of this section and of the collection.
The position in short
Every bill is potentially read by one of these three. Writing as though it will be costs four words a line, and discovering that it was not written that way costs a great deal more.