From First Meeting to Enforce OCG: What Working With Custodia Actually Looks Like

Written By Morning Star

Custodia Advisory | Private Equity | Outside Legal Spend

Managers often ask us the same question: what actually happens when we bring Custodia Advisory in?

The short answer is that we find out what you have, find where the money leaks, build one set of guidelines for every provider, compare the market, and train your team to enforce it. The longer answer is below, step by step.

Prefer a printable version? Download the full guide as a PDF: From First Meeting to Enforced OCG

Step 1: Start with what you have today

The first meeting is about listening. We want to know whether you have Outside Counsel Guidelines, what they say, who owns them, and when they were last updated. Most importantly, we ask whether they cover fiduciary providers or only law firms.

In our experience, most guidelines stop at the law firm's door. Director services, share trustee arrangements and AML/KYC administration are often governed by separate agreements and never brought inside the OCG. We ask you to share your current guidelines, engagement letters, fiduciary management agreements and a list of every legal and fiduciary provider.

Step 2: Map where the spend sits

Next we build a clear picture of where your legal and fiduciary spend actually goes. We review 12 to 24 months of invoices and organise them by provider, entity, jurisdiction and matter type.

Along the way we note who approves each invoice, which systems are involved, and which entities are dormant but still accruing registered office, AML and director fees. Most managers have never seen their spend laid out this way.

Step 3: Compare the paper with the practice

This is where leakage shows up. We compare what your guidelines and management agreements say with what providers actually bill. We look at rate caps, annual increases, out-of-pocket charges, onboarding fees, invoice format and payment terms.

We have seen a fiduciary fee rise by 160% against a documented 5% cap, defended as inflation, and pass through unchallenged. The finding is rarely dramatic on a single invoice. It becomes dramatic when someone finally holds the agreement next to years of billing. You receive a findings report that quantifies the leakage and ranks it by size.

Step 4: Build one framework for every provider

We then draft, or rebuild, your OCG so it covers onshore and offshore law firms and fiduciary providers in one document. It sets fixed fees, caps annual increases, lists the charges that will not be paid, requires itemised invoices for each entity, and sets clear submission deadlines and payment terms.

Crucially, it states that no separate agreement overrides it. That single sentence closes the gap providers use to argue that the guidelines don't apply to them. We refine the draft with you until it is final.

Step 5: Shop the market without losing quality

Better rates should never mean worse work. So we compare your current providers with alternatives, including independent boutiques and larger firms, and we look well beyond price. We assess staff continuity, service levels, references from comparable clients, independence from your law firm, and whether fees are fixed for the life of the fund or escalate.

We have written separately about why more managers are moving to independent providers. Where it makes sense, we introduce and negotiate with the strongest candidates. The decision is always yours.

Step 6: Put it into practice

A guideline only matters once providers are bound by it. We issue the OCG to every provider and obtain written acknowledgement, align management agreements at renewal so they don't conflict with it, and help configure your billing platform to check invoices against the new rules.

Step 7: Train people, not just platforms

This step is the one most often skipped. Billing platforms are valuable, but they flag anomalies; they don't argue with a provider. We train your procurement and audit teams to review invoices themselves: to check each one against the governing agreement rather than last year's bill, to recognise non-compliant charges, to reject or return an invoice, and to push back with confidence.

We run live practice sessions on your own invoices and agree a clear escalation path for when a provider disagrees. The aim is a team that can hold a long-standing relationship and still say no to a bad invoice.

Step 8: Stay close

Provider terms drift when nobody is watching, so the work doesn't end at implementation. We reconcile invoices against the OCG periodically, review rate increases at year-end, and check for dormant entities that no longer need to exist.

Why we start this way

The people closest to a provider relationship are often the least able to see how far it has drifted. That isn't a criticism. It is what years of familiarity do. Our job is to bring distance, independence and a method, so the guidelines you write are the guidelines that actually get enforced.

Related reading

Custodia Advisory takes managers from first meeting to enforced guidelines across legal and fiduciary spend. Get in touch at advisory@custodiaadvisory.com for a no-obligation conversation or a complimentary single-matter audit.

Morning Star
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