Five Disciplines. One Mandate: Accountability.

Private equity firms operate with a clear obligation to their investors: every cost drawn from the fund must be justified, managed, and scrutinised with the same discipline applied to the investment portfolio itself. Legal spend rarely receives that scrutiny — and the gap between what's billed and what should be billed is, in our experience, consistently larger than firms expect.

Custodia Advisory works with private equity and asset management institutions to close that gap. That means auditing invoice histories to identify non-compliant and recoverable spend, building and enforcing Outside Counsel Guidelines that reflect current market standards, and training the procurement and finance teams who receive invoices day to day to review, challenge, and escalate billing with consistency and confidence.

The margin is already there. We help you claim it.

Our Services

1. OCG Enforcement

Outside Counsel Guidelines exist to set the terms on which external law firms bill your institution — rate structures, staffing levels, permitted disbursements, billing formats, prior-approval requirements. Most institutions have a well-drafted OCG. Few have a way of checking, invoice by invoice, whether firms are actually complying with it.

We review billing against your OCG line by line, identify where firms have drifted from agreed terms, and put in place the enforcement mechanism that was missing — so the guideline stops being a document and starts being a control.

What this typically uncovers:

• Rate increases applied without the required prior notice or approval
• Staffing above agreed seniority levels for routine matters
• Disbursements and third-party costs billed outside agreed categories
• Block billing and vague time entries that obscure what was actually done 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. When we review twelve months of invoices against those guidelines, we find rate increases applied by two firms without the required thirty-day notice, a pattern of senior associate billing on routine document review matters where the OCG specifies junior staffing, and disbursement descriptions that don't meet the itemisation standard in the guideline. None of this was visible to the deal team approving invoices. All of it was recoverable — and all of it stopped once enforcement was in place.

2. Legal Spend Audits

A legal spend audit is a structured review of invoices, matters, and billing patterns over a defined period — designed to answer one question: is this institution paying for what it agreed to pay for, and nothing more.

We work directly with your existing invoice data (no new systems required), identify discrepancies against engagement letters, OCGs, and fee arrangements, and produce a clear, evidence-based report you can act on — whether that means recovering fees, renegotiating terms, or changing which firms you instruct.

Scope can include:

• Single-matter or single-firm audits
• Portfolio-wide reviews across multiple law firms and jurisdictions
• Historical audits (recovering overbilling from prior periods)
• Ongoing periodic audits as a standing control What this looks like in practice: An asset manager with legal spend distributed across five jurisdictions and eight panel firms has no consolidated view of what it is actually paying, to whom, and against what terms. We run a portfolio-wide audit across two years of invoices, mapping each bill against the relevant engagement letter and OCG. The findings cover duplicate time entries across matters, disbursements billed above the agreed cap, and two firms whose rate cards haven't been updated in the system since the original engagement — meaning every invoice since has been checked against outdated figures. The report gives the firm a clear basis to recover fees, renegotiate terms with two firms, and retire one panel relationship entirely.

3. Procurement Training & Invoice Controls

Most billing problems aren't caught at the law firm. They're caught — or missed — at procurement, the moment an invoice lands for approval.

We train procurement and finance teams to recognise the guideline breaches that actually matter: block billing, unauthorised rate increases, duplicate charges, and scope creep dressed up as additional work. Just as importantly, we build the habit of following through — querying, rejecting, and holding firms accountable at the point of invoice receipt, before a bad bill becomes a paid one.

Training covers:

• Recognising common OCG breach patterns at first read
• Practical escalation: what to query, what to reject, and how
• Building internal confidence to challenge external counsel
• Embedding invoice review as a standing discipline, not a one-off exercise What this looks like in practice: A private equity firm's procurement team of four is processing invoices from eleven panel firms across multiple jurisdictions. They know an OCG exists but have never been trained on what it actually requires at the invoice level. We run a structured training programme covering the six most common breach patterns in the firm's own billing history — using real invoice examples with identifying details removed. We then build a one-page invoice review checklist tailored to the firm's specific OCG, and an escalation protocol that gives the team a clear process for querying firms professionally without creating unnecessary relationship friction. Invoice-level compliance improves within the first billing cycle.

4. Dormant Entity Reviews

Dormant entities don't stop costing money just because they've stopped doing business. Registered office fees, government filing fees, annual returns, and director fees keep accruing long after a structure has outlived its original purpose — often unnoticed, because no one owns the question of whether the entity should still exist.

We run quarterly reviews of dormant entities across your structure, flagging which ones are still earning their keep and which ones are quietly draining fees for no operational reason — giving you a clear basis to decide what to keep, wind down, or consolidate.

What this typically delivers:

• A full inventory of dormant and low-activity entities across the structure
• Cost analysis — what each entity is costing annually to maintain
• Recommendations on dissolution, consolidation, or continued retention
• A standing quarterly review cycle to prevent the problem recurring What this looks like in practice: A fund manager with a multi-vintage structure has accumulated forty-three entities across four jurisdictions over twelve years. No one has reviewed the full list since the last fund close. We map every entity against its original purpose, current activity level, and annual maintenance cost. Seventeen entities have been dormant for more than three years, with no pending transactions, no regulatory requirement to maintain them, and no record of why they weren't wound down when the relevant fund or transaction closed. The annual cost of maintaining those seventeen entities is material. We recommend dissolution for fourteen, consolidation for two, and retention for one — with a standing quarterly review to prevent the same accumulation occurring in the next cycle.

5. Fiduciary Oversight

For institutions that answer to investors, trustees, or other principals, every dollar of legal and operational spend is, in some sense, someone else's money. Fiduciary oversight is the layer that ensures spend decisions can withstand scrutiny — from auditors, from investors, and from regulators.

We help build and run the oversight processes that demonstrate this discipline: documented approval trails, periodic independent review, and clear escalation paths when something falls outside agreed parameters.

This work typically supports:

• Investor and LP reporting on cost governance
• Audit readiness for legal and operational spend
• Internal policy development for spend approval and escalation
• Independent, periodic review separate from day-to-day procurement What this looks like in practice: An institutional investor asks a PE fund manager to demonstrate, as part of its re-up due diligence, how legal and operational spend is governed at the fund level. The fund manager has an OCG and a procurement team, but no documented approval framework, no record of how individual spend decisions were made, and no independent review process separate from the people making the decisions day to day. We design and implement an oversight framework — approval thresholds, documented rationales, escalation paths, and a periodic independent review cycle — that gives the fund manager a clear, auditable answer to that investor question, and that holds up to the same scrutiny in every subsequent re-up conversation.

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Custodia Advisory — custodiaadvisory.com — advisory@custodiaadvisory.com