Outside counsel guidelines are the written instructions a corporate legal department gives its law firms, setting out how matters are staffed, how time and expenses are recorded, how rates change, and how invoices are submitted. Good guidelines (OCGs for short) prevent most billing disputes before they start, because every firm knows the rules on day one. Weak ones run to 40 pages that nobody reads, and invoice review turns into a monthly argument. This guide goes section by section through what your OCGs should contain, with practical wording choices for each. Once the document is written, billing guidelines have to be translated into eBilling system rules before they can be enforced automatically.
What are outside counsel guidelines for?
Outside counsel guidelines exist to set consistent expectations for every firm that works for your department, so spend is controlled and the relationship runs on shared rules. Enforcement is a common priority, and in a 2025 survey of 188 companies, 45 percent of legal operations teams planned tougher enforcement of outside counsel guidelines. Rates are the pressure point, since invoice data covering more than $75 billion of 2025 spend shows average partner rates increased 5.1 percent in 2025. They work as an instruction manual for outside counsel, covering the operational side of the engagement.
- Consistent expectations. Every firm follows the same staffing, billing, and submission rules, whichever lawyer engaged them.
- Spend control. Clear rules on rates, expenses, and time entries give invoice reviewers something objective to apply.
- A better relationship. Firms spend less time on rejected invoices and write-offs when the rules are known in advance.
Keep the document practical and short. Ten to fifteen pages covers everything most departments need, and practice-specific rules, such as for litigation or intellectual property, can sit in short appendices.
What should the scope section of your OCGs cover?
The scope section of your OCGs should state who the guidelines apply to, when they take effect, and how they relate to engagement letters. It is the section firms read first, and it settles most “does this apply to us?” questions.
- Who and what is covered. All outside law firms and legal vendors, across every matter, business unit, and affiliate, unless a written exception applies.
- Effective date. The date the guidelines take effect, and whether they apply to matters already open on that date.
- Relationship to engagement letters. A statement that the guidelines apply alongside each engagement letter, with the engagement letter controlling where the two conflict.
Include a named contact in legal operations for questions. Firms that know who to ask raise issues before billing, which is when they are cheapest to fix.
How should OCGs handle staffing on matters?
OCGs should handle staffing by requiring approved timekeepers, seniority that matches the complexity of the work, and advance approval for changes to the team. Staffing drives cost more than any other factor, so this section deserves precise wording.
- Approved timekeepers. Only timekeepers approved for the matter may bill to it. New timekeepers need approval before their first entry.
- Right level for the work. Work is done by the lowest-cost timekeeper qualified to do it well. Partner time on routine document review is a common write-off.
- No billing for learning. Time spent bringing a new team member up to speed, or for staff turnover the client did not request, is not billable.
Also cap attendance. A common rule allows one timekeeper at internal calls and meetings unless the matter lead approves more in advance.
What time entry and narrative rules belong in OCGs?
Time entry and narrative rules in OCGs define how time is recorded and described, so every line on an invoice can be reviewed and coded. These rules generate the most rejections, so write them clearly and give examples.
- Billing increments. Time is recorded in tenths of an hour, with actual time billed, and no minimum charges for short tasks such as a two-minute email.
- No block billing. Each task is entered separately with its own time. A single four-hour entry covering “research, calls, drafting” is rejected.
- Specific narratives with task codes. Each entry says what was done and why, with UTBMS task and activity codes where your eBilling platform requires them. “Attention to file” and “review documents” are too vague to approve.
Include two or three examples of acceptable and unacceptable entries. They do more to change billing behavior than a page of rules.
Which expenses should OCGs allow?
OCGs should allow reasonable, necessary expenses billed at actual cost, and list the overhead items that are never billable. Clear expense rules stop a steady stream of small charges that add up across hundreds of invoices.
- Allowed at cost. Court fees, filing fees, approved expert and vendor costs, and necessary travel, billed without markup and grouped by expense category.
- Overhead that is never billable. Word processing, secretarial time, routine photocopying, conference rooms, office supplies, and research subscription fees.
- Receipts and approvals. Receipts for any single expense above a set amount, such as $75, and advance approval for experts, vendors, and travel.
Set travel rules in plain terms: economy airfare for flights under a set length, reasonable hotel rates, and no billing for travel time unless work is performed.
How should OCGs cover rates and rate increases?
OCGs should cover rates by fixing each timekeeper’s rate for a set period and defining exactly how and when a firm can request an increase. Unmanaged rate increases are one of the quietest drivers of rising legal spend.
Rates should be locked for at least 12 months from the start of the engagement. Increase requests should arrive once a year, in writing, 60 to 90 days before the proposed effective date, listing each timekeeper, the current rate, the proposed rate, and the reason. No increase applies until the department approves it, and invoices at unapproved rates are adjusted back to the approved rate. Spell out that a timekeeper’s promotion does not automatically change the rate on existing matters.
What should OCGs say about fee arrangements and budgets?
OCGs should say which fee arrangements the department accepts, when a budget is required, and how firms report accruals. These rules connect billing to financial planning.
- Fee arrangements. Hourly billing, fixed fees, capped fees, discounts, and other alternative arrangements, each documented with the matter scope and staffing it assumes.
- Budgets. A budget for every matter expected to exceed a set amount, such as $50,000, submitted within 30 days of engagement and updated when scope changes.
- Accruals. Estimates of work performed but not yet billed, submitted monthly or quarterly so finance can close the books accurately.
State what happens when a budget is exceeded. A common rule requires notice when spend reaches 80 percent of budget. Alternative fee arrangements need their own structure and terms, so reference them in the OCGs and document the details per matter.
How should invoicing rules be written in OCGs?
Invoicing rules in OCGs should state where invoices are submitted, in what format, how often, and how late is too late. Precise submission rules keep invoices flowing into your eBilling system in a form it can process.
- Submission method and format. Invoices go through your eBilling platform only, in the required LEDES format, with the correct matter number on every invoice.
- Frequency. One invoice per matter per month, submitted within 30 to 45 days of the end of the billing period.
- Late invoices. Time or expenses older than a set window, such as 90 or 120 days, may be reduced or refused.
Name the exact LEDES format your department accepts for electronic billing, since firms can submit several versions and your platform may accept only one.
How do you get law firms to follow OCGs?
Law firms follow OCGs when the rules are part of the engagement, acknowledged in writing, and enforced consistently from the first invoice. A well-written document that is never enforced changes very little.
Require each firm to sign an acknowledgment and incorporate the guidelines into every engagement letter. Walk your top 10 to 20 firms by spend through the guidelines in a short call, since they usually account for most of your invoice volume. Enforce the rules through your eBilling system, and review the guidelines once a year with feedback from reviewers and firms. The practices for running the outside counsel onboarding workstream cover how to introduce new guidelines to firms without disrupting billing.
Conclusion
Outside counsel guidelines set the rules for every engagement, and the best ones are short, specific, and enforced. Cover scope, staffing, time entries and narratives, expenses, rates, fee arrangements, budgets, and invoicing, with clear examples wherever firms are likely to misread a rule. Lock rates for a defined period, require budgets on larger matters, and name the exact submission format. Then get each firm’s written acknowledgment, build the rules into your eBilling platform, and review the document every year so it keeps pace with how your department works.
How Basla can help
Basla provides delivery teams for enterprise legal management and eBilling software implementation, covering legal technology consulting, business analysis, billing rule configuration, rate and timekeeper setup, law firm onboarding support, testing, documentation, and post-go-live support. For OCGs, that means working with your legal operations team to turn each section into enforceable rules and testing those rules against real invoice scenarios before firms go live.
Basla has delivered matter management and eBilling across 10+ global jurisdictions, where guidelines often need regional variations for tax, currency, and local billing practice. That delivery experience helps keep one set of guidelines consistent across every region you operate in.
Frequently asked questions
What are outside counsel guidelines?
Outside counsel guidelines are the written instructions a corporate legal department gives its law firms on staffing, time recording, expenses, rates, budgets, and invoicing. They set consistent expectations across every firm and matter.
What should be included in outside counsel guidelines?
The guidelines should include scope, staffing rules, time entry and narrative rules, allowed and non-billable expenses, rate and rate increase terms, fee arrangements, budgets and accruals, invoicing rules, and a firm acknowledgment. Most departments cover this in ten to fifteen pages.
How long should OCGs be?
OCGs work best at ten to fifteen pages, with practice-specific rules in short appendices. Long documents are rarely read in full, and unread rules generate rejected invoices and disputes.
What is block billing and why do guidelines prohibit it?
Block billing is recording several tasks under a single time entry with one total. Guidelines prohibit it because reviewers cannot see how long each task took or whether it was necessary.
How often should law firms be allowed to raise rates?
Most departments allow rate increase requests once a year, submitted 60 to 90 days before the proposed effective date. No increase applies until the department approves it in writing.
How do you make law firms comply with billing guidelines?
Law firms comply when the guidelines are built into each engagement letter, acknowledged in writing, and enforced consistently through the eBilling system. An annual review keeps the rules current and credible.
*This article is provided for general information only and does not constitute legal advice. Basla Solutions provides legal technology implementation and support services and does not practice law.*