Block Billing, Rate Creep, and the Other Ways Law Firms Quietly Over-Bill
Custodia Advisory | Private Equity | Legal Spend | March 2026
In our last post, we looked at why the enforcement gap opens up in the first place — guidelines that are well drafted but rarely checked, invoice by invoice, against what's actually being billed. Here, we get specific about what that checking should actually be looking for.
Most legal invoices look reasonable at a glance. That's precisely the problem. Billing irregularities are rarely obvious — they're built from small, defensible-looking entries that, individually, don't raise a flag. It's only when you read closely, and compare against what was actually agreed, that the pattern emerges.
In our audit work, the same handful of irregularities surface again and again. Here's what to watch for.=
Block billing
A single time entry covering multiple tasks — "review documents, draft correspondence, attend call, prepare summary — 4.5 hours" — makes it impossible to assess whether each component was reasonable, or whether the matter justified that time at all. Block billing isn't always deliberate obfuscation, but it has the same effect: it shields the bill from scrutiny by design.
What to do: Outside Counsel Guidelines should require task-level time entries, not bundled blocks. If your OCG already says this and it's still happening, that's an enforcement gap, not a drafting one.
Unauthorised rate increases
Rate cards agreed at engagement are rarely revisited — until an invoice arrives with a higher number and no explanation. Most OCGs require advance notice before any rate change. In practice, increases often appear quietly, applied to new matters or even existing ones, with no flag raised unless someone is checking the rate against what was actually agreed.
What to do: Rate verification should be a standing step in invoice review, not a one-off check at engagement. Every invoice should be checked against the current agreed rate card, every time.
Staffing above agreed seniority
A routine, lower-complexity task — document review, standard correspondence, procedural filings — billed at partner or senior associate rates, rather than the junior resource the work actually calls for. This is one of the easiest irregularities to miss, because the work itself was done competently. The issue isn't quality. It's whether the seniority level matches what the matter warranted, and what the guideline permits.
What to do: Cross-reference staffing levels against matter complexity, not just against the invoice total. A clean bill can still be the wrong bill.
Vague or bundled disbursements
Third-party costs — courier fees, research database charges, photocopying — bundled into a single "disbursements" line with no itemisation. Individually small, but bundled and unitemised disbursements make it impossible to verify they were necessary, reasonable, or even related to the matter.
What to do: Require itemised disbursements above a defined threshold. If a firm can't itemise it, that's worth a direct conversation.
Duplicated time entries
Two timekeepers billing for the same call, the same document review, or the same internal discussion — sometimes legitimate (a handover, a second opinion), often not. Duplication tends to hide in larger matters with multiple timekeepers, where no single reviewer is looking at the full picture across the team.
What to do: Periodic cross-checks across timekeepers on the same matter, not just line-by-line review of individual entries.
Scope creep dressed up as additional work
Work performed beyond the original engagement scope, billed as though it were simply part of the matter, without the sign-off the guideline requires for out-of-scope work. This is often the hardest to catch, because the work itself may be entirely legitimate — the issue is process, not substance.
What to do: Any work outside the original scope should trigger a defined approval step before it's billed, not after.
The pattern behind the patterns
None of these irregularities are exotic. They're well known, individually easy to explain, and individually easy to let slide. The risk isn't any single instance — it's that, left unchecked, they compound quietly across matters and across years, and the institution absorbs the cost without ever seeing the pattern.
Catching them requires two things: a guideline specific enough to define what's not acceptable, and a review process disciplined enough to actually check for it, invoice by invoice. That combination — not just the guideline on its own — is what closes the gap.
Invoice-level billing isn't the only place cost quietly accumulates, either. In our next post, we look at dormant entities — and what a standing quarterly review typically uncovers.
Custodia Advisory — custodiaadvisory.com