Don’t Let 2027’s OCG and RFP Review Stop at Legal Fees
Custodia Advisory | Private Equity | Outside Counsel Guidelines
As platforms begin planning their next Outside Counsel Guidelines review and the RFP cycles that go with it, the instinct is almost always to focus on legal spend — rate cards, staffing, billing formats, the relationship with outside counsel itself. That focus is warranted. It's also incomplete, and the gap it leaves is exactly where we're seeing some of the largest, least examined cost overruns on platforms today.
What we're actually finding
Through our work reviewing fiduciary provider relationships, Custodia has observed fiduciary fee increases running as high as 160% against management agreements that specified a 5% annual cap. Not 5% compounded aggressively over several years — a single increase, in a single cycle, more than thirty times the rate the governing agreement actually permitted. This is not a rounding error or an ambiguous contractual gray area. It's a fee increase that directly contradicts the terms both parties signed, and it went through, uncaught, until someone happened to look closely enough to compare the invoice against the agreement itself.
That's the part worth sitting with. This wasn't hidden in complex language or buried in a footnote. It was a straightforward breach of an unambiguous cap — and it still made it through the payment cycle. Which raises the obvious question: if a violation this direct can go unnoticed, what does that say about the more subtle version of the same problem happening elsewhere, quietly, within the bounds that look technically compliant?
Why the procurement side gets forgotten
When platforms plan an OCG refresh, the legal team's relationship with outside counsel is naturally front of mind — it's the most visible, most actively managed relationship on the platform. Fiduciary and procurement spend, by contrast, is often managed by a different team entirely, under different agreements, reviewed on a different cycle, and rarely brought into the same conversation as the legal OCG refresh, even though the same underlying discipline applies to both.
The result is that a platform can spend real time and effort tightening its legal guidelines while its fiduciary spend continues operating under agreements nobody has cross-checked against actual billing in years. As you plan for 2027's review cycle, the procurement side deserves the same seat at the table as legal — the same RFP rigor, the same invoice-to-agreement reconciliation, and the same expectation that terms agreed on paper are actually the terms being billed.
Why the management company often can't catch this alone
This isn't a capability problem. It's a proximity problem. The team managing a long-standing fiduciary relationship has typically been managing it for years — building trust, developing a working rapport, and, in the process, losing some of the instinct to scrutinize each invoice against the original agreement rather than against last year's bill. A 160% increase is much harder to see as an outlier when you're comparing it to a slowly climbing baseline you've watched build up over several renewal cycles, rather than to the actual cap the management agreement specifies.
This is exactly why engaging an outside party — one with no history in the relationship and no rapport to protect — matters. Custodia works with management companies to tighten Outside Counsel Guidelines so they explicitly extend to fiduciary spend, and, just as importantly, to train procurement teams on how to actually push back: how to compare an invoice against the governing agreement rather than against precedent, how to flag a violation the moment it appears rather than after it's compounded for several cycles, and how to have that conversation with a long-standing provider without treating the relationship's longevity as proof of its integrity.
It's worth reiterating a point we made a few weeks ago, because it bears directly on 2027 planning: there is no legal or compliance requirement that your fiduciary provider be the same sister company as your legal provider. That pairing is a commercial convenience, not a regulatory necessity, and it's precisely the structures where legal and fiduciary services sit under the same corporate umbrella that we see this kind of drift most often, since neither side has genuine independence from the other to catch it. We wrote about this in more detail here: "Why Diversifying Legal & Fiduciary Services Protects the Fund's Lifetime Return" — https://www.custodiaadvisory.com/knowledge/why-diversifying-legal-amp-fiduciary-services-protects-the-funds-lifetime-return. If your RFP planning for next year still assumes the two need to be bundled, that assumption is itself worth revisiting before the cycle begins.
A long relationship is not the same as an honest one
That's really the point worth carrying into 2027's planning. Years of working with a provider builds trust, and trust is valuable — but it isn't evidence. A provider who has been reliable for a decade is still capable of billing 160% above an agreed cap, and the length of the relationship is precisely what can make that increase harder to catch, not easier. As you build out your OCG and RFP plans for next year, make room for the fiduciary and procurement side of the business to get the same scrutiny the legal relationship is about to receive. The two are more connected than most review processes currently treat them.
Custodia Advisory helps management companies tighten Outside Counsel Guidelines across legal and fiduciary spend, and trains procurement teams to catch non-compliant invoices before they're paid. Enquire about a complimentary review ahead of your 2027 OCG and RFP cycle.