Legal auditing
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According to the National Association of Legal Auditing (NALA), legal auditing is a litigation management practice and risk management tool, used by insurance and other consumers of legal services, to determine if hourly billing errors, abuses, and inefficiencies exist by carefully examining and indentifying unreasonable attorney fees and expenses. [1]
[edit] Methods
Legal auditors conduct a detailed analysis of original time records, attorney work production, expenses and hourly rate benchmarks. The purpose of a legal bill auditing is to save money for the insurance company and their clients. Many audits measure performance and quality of services in addition to cost alone. Legal Bill Auditors may be responsible for monitoring the matter as it progresses for purposes of giving a second opinion in major cases or as a post-mortem. Legal bill audits give insurance companies and their clients peace of mind and avoid possible future mistakes.[citation needed]
Recently, the firm Stuart Maue claimed to have conducted the largest legal audit on record during the OxyContin litigation, involving claims for attorney fees and expenses amounting to over $400,000,000 billed and audited, with the final negotiated settlement resulting in a reduction of $200,000,000 from the total billed amount. [2]
[edit] Taxation of Costs
In common law countries, when the above exercise is carried out by an official to determine legal costs it is called "taxation of costs".
