OCG Enforcement | Custodia Advisory
Outside Counsel Guidelines Only Work If Someone Is Checking
Most private equity and asset management institutions have an Outside Counsel Guideline in place. It defines the rates agreed with panel firms, the staffing levels expected on different matter types, the disbursements that are and are not recoverable, and the process for approving out-of-scope work. It was negotiated carefully, signed by outside counsel, and filed.
And then, in most cases, very little happens with it.
Not because the institution doesn't care about compliance. But because no one has been specifically tasked with checking, invoice by invoice, whether the firms are actually billing in accordance with what was agreed. Legal teams are focused on the matter itself. Procurement teams are processing volume. Finance is reconciling against budget. The guideline exists — but the mechanism that gives it teeth does not.
This is the gap Custodia Advisory exists to close.
What OCG Enforcement Actually Involves
Enforcement is not a one-time exercise. It is a standing discipline — applied at every invoice, across every panel firm, for every matter. It requires three things working together: This is the gap Custodia Advisory exists to close.
A guideline that is current
An OCG drafted three years ago reflects the billing landscape as it existed three years ago. Firms expand into new service lines. Matter types evolve. Rate structures shift. A guideline that hasn't been reviewed against current market standards and current billing practice has already started to age out of relevance — and the gaps it develops are exactly where billing drift concentrates.
We review your existing OCG against your current panel relationships, your active matter types, and current market standards — updating, tightening, and reissuing where necessary so the document reflects your actual billing reality.
When was your OCG last updated?
Many of the Outside Counsel Guidelines we review were drafted years — sometimes decades — ago. They were written for a different billing landscape, a different panel structure, and a different set of matter types. The legal services market has changed significantly in that time: alternative fee arrangements have become standard, law firms have expanded into adjacent service lines, technology and AI-related disbursements have emerged as a new category entirely, and regulatory complexity has increased the volume and variety of work being instructed.
An OCG that hasn't kept pace with those changes isn't just outdated — it's creating space for billing drift that the guideline was never designed to permit. When a firm bills for a service or disbursement category that simply didn't exist when the OCG was written, there is no clear breach — because the guideline doesn't address it. That ambiguity is where cost accumulates.
The institutions most exposed are often those with the longest-standing panel relationships. The original OCG was agreed when the relationship was new, and it has never been revisited precisely because the relationship is comfortable and well-established. Comfort is not the same as compliance — and a long-standing relationship is no substitute for a current guideline.
We recommend OCGs are reviewed as a minimum annually — and immediately whenever there is a significant change in panel composition, matter type, or the services your firms are providing. We can run that review as a standalone exercise or as part of a broader OCG enforcement engagement.
A review process at the right point in the workflow
Enforcement that happens after an invoice has reached the deal team for approval is enforcement that happens too late. By then the invoice has already moved through the workflow with an implicit assumption of compliance. The check needs to happen at procurement — before the invoice goes anywhere else.
We design and implement the invoice review process that sits at that point: a structured check of each invoice against the OCG, with a defined protocol for querying, rejecting, and escalating non-compliant bills before they are approved.
People who know what to look for
A review process is only as good as the people running it. Procurement and finance teams need to know, specifically, what OCG non-compliance looks like at the invoice level — not in the abstract, but in the specific patterns that actually appear in your billing history.
We train the teams doing the checking: what to look for, how to assess whether an entry is compliant, how to query a firm professionally and without creating unnecessary friction, and how to escalate when a pattern of non-compliance emerges rather than an isolated entry.
What OCG Enforcement Typically Uncovers
When we review invoice histories against an institution's own OCG, the same patterns surface consistently:
Unauthorized rate increases
Applied without the required advance notice or written approval, often across multiple matters simultaneously
Staffing above agreed seniority levels
Senior timekeepers billing for routine, lower-complexity work that the OCG assigns to junior resource
Block billing
Single time entries covering multiple tasks, making it impossible to assess whether the time was reasonable or the guideline was followed
Non-compliant disbursements
Third-party costs billed outside agreed categories, without required itemisation, or above agreed caps
Out-of-scope work billed without approval
Additional work performed and billed as though it were within the original engagement scope, bypassing the prior-approval requirement the OCG sets out
Duplicate time entries
Two or more timekeepers billing for the same call, review, or discussion, sometimes across multiple matters
None of these patterns are exotic. They are well known, individually defensible-looking, and individually easy to let slide. The risk is not any single instance — it is that, left unchecked, they compound across matters and across years into a material and largely invisible cost.
What This Looks Like in Practice
A mid-market private equity firm engages three panel firms across fund formation, transaction work, and portfolio company matters. Each firm has a signed OCG. The firm's procurement team processes invoices against a payment run — checking amounts, coding to the correct cost centre, and passing for approval. No one is checking the invoices against the OCG itself.
When we review twelve months of invoices against the three guidelines, we find:
Rate increases applied by two firms without the required thirty-day written notice
A consistent pattern of senior associate billing on document review matters where the OCG specifies junior staffing
Disbursement descriptions that don't meet the itemisation standard in the guideline across all three firms
One firm billing for out-of-scope regulatory work on four separate matters without the prior approval the OCG requires
None of this was visible to the deal team approving invoices. All of it was recoverable. And all of it stopped within one billing cycle once the enforcement process was in place — because the firms knew, for the first time, that someone was checking.
How We Work
Every OCG enforcement engagement begins with a review of your existing guideline and a sample of recent invoices. From there we scope the engagement precisely — whether that means a one-off audit and process design, an ongoing enforcement retainer, or a training programme for your procurement team.
We work with your existing data and your existing teams. No new systems. No long onboarding. Just the oversight that should already be there.