During a presentation recently, the finance manager of a large law department mentioned that in 2007 his company’s internal audit group had reviewed the legal department’s processes. He proudly added that internal audit gave the department a “strong” rating.
If you want headaches, invite internal audit to look at your processes for invoice approval and reporting. They can conjure up all manner of risks and prescribe all manner of onerous checks and counter-checks.
For example, the person who approves a bill should not be the person who enters the bill’s information into the matter management system. The person who approves the bill should approve the bill after the information has been entered into the matter management system. Approval levels need to be scrupulously observed and there must be adequate written documentation about the terms of the retention. Accruals must be accurately updated every month. On and on.
Few law departments take these precautions.