Legal Fee Audits

Legal Fee Audits

In complex litigation, disputes over attorney fees rarely turn on a single time entry. They turn on how the case was staffed, managed, and billed—and whether the invoices match the work actually performed.

At Jim Schratz & Associates, we conduct structured, full-context legal fee audits designed for mediation, hearings, and trial. We do not skim invoices. We do not rely on samples. We do not issue spreadsheet-only critiques. We evaluate billing in context—and we ground our opinions in the record.

Every Matter Begins With a Free File Review

Every matter begins with a free initial file review. We review the invoices and related materials and let you know whether a full audit appears warranted. In approximately 15–20% of matters, we conclude that a full-scale audit is not indicated—and we say so directly.

When we do see red flags or structural concerns, we recommend a full-scale audit and provide a not-to-exceed budget so you understand scope and cost before moving forward. If a fee dispute is already in motion, see our page on attorney fee disputes.

What a Full-Scale Legal Fee Audit Involves

A full-scale audit is detailed, structured, and data-driven. For a deeper breakdown of methodology, see our Legal Fee Audit Process. At a high level, our work typically includes:

• Invoice coding and analysis so time entries can be reviewed by attorney, task, phase, billing pattern, and staffing structure.
• Computer-generated reporting to identify trends, anomalies, duplication, and structural inefficiencies that surface-level review misses.
• Work product comparison, including pleadings, discovery, correspondence, deposition transcripts, and other key documents, to confirm whether billed time matches what the record reflects.
• Ongoing consultation with the client and counsel to focus the review on the issues that matter and to produce customized reporting.
• Expert reporting explaining our findings and opinions in a manner suitable for negotiation, hearing, or trial.
• Litigation support, including preparation for mediation/hearing and assistance with fee-related strategy.
• Deposition and trial support, including attendance when appropriate to assist in cross-examination on billing issues and providing testimony.
• Post-trial and appellate support when fee issues remain in dispute.

For practical examples of what tends to trigger deeper review, see common billing issues in complex litigation.

Why a Full-Scale Audit Matters

A full-scale audit allows us to look beyond individual entries and evaluate how the case was staffed, managed, and billed as a whole. By comparing invoices to the underlying work product, we can determine whether the time billed is consistent with what was actually done—and whether the work was reasonable for the case.

For example, if a deposition transcript reflects a two-hour examination but the billing records show six hours of deposition time, the discrepancy is flagged and analyzed. We do not rely on samples or cursory reviews. Courts evaluate reasonableness in context, and our analysis mirrors that approach. For more on judicial standards, see how courts evaluate attorney fees.

When litigation is ongoing, preventive oversight may be appropriate. Learn more about trial monitoring and ongoing billing oversight.

Extensive Experience in Legal Fee Audits

Jim Schratz has conducted more than 4,000 legal fee audits nationwide for government entities, corporations, insurers, and individual clients. His work has been relied upon by courts across the country in reducing and evaluating attorney fee requests.

He has been retained in matters involving tens of millions of dollars in fees, and his opinions on the reasonableness of attorneys’ fees have been accepted in state and federal courts. Jim has also been quoted in publications such as The Wall Street Journal and The National Law Journal on legal fee and billing issues.

Representative Matters

Representative engagements in the legal fee audit context include:

• Retention by investor Carl Icahn and other shareholders to review approximately $60 million in professional fees in the United States Bankruptcy Court for the District of Delaware.
• Appointment by the District Court in the Northern Mariana Islands to audit approximately $22 million in legal fees in connection with the estate of Larry Lee Hillblom, co-founder of DHL Express.
• Engagements by the State of Hawaii, Department of the Attorney General, the U.S. Department of Justice, and other governmental entities to audit tens of millions of dollars in legal fees.

Expert Witness and Consulting Experience

In addition to conducting audits, Jim frequently serves as an expert witness on the reasonableness of attorneys’ fees, and provides testimony in matters involving insurance bad faith and claims handling. His background as both an insurance adjuster and insurance executive gives him a practical understanding of how litigation and claims decisions are made inside an organization.

If you need testimony support specifically, visit Expert Witness Services.

If you are preparing or opposing a fee application, consider our page on fee petitions and fee recovery. We also publish practical commentary on billing structure when it is relevant to evaluation; see structural billing differences between large and small firms.