The right of a legal department to audit invoices of law firms it hires

One of the provisions in the Council on Litigation Management’s Litigation Guidelines (Para. XIV) establishes the right of a legal department to go back over bills even after the department has paid them. “These audits may be conducted at your office or we may request that specific files and documentation be shipped to a different location.” There are several other entitlements covered and the clear statement that “Expenses associated with the preparation of the files for the audit is [sic] not billable.”

It’s hard to imagine when a general counsel would invoke such a right unless there were reason to suspect severe billing irregularities (See my post of Dec. 27, 2008: bill auditors with 15 references.).