Law Firm Expense Reporting Checklist

Check each line against the current reimbursement policy: meal per-diem, hotel cap, mileage at the IRS standard rate, no first-class airfare without partner pre-approval. Common gotcha: alcohol on a client-meal receipt — most firm policies disallow it as an advanced client cost.

Hard costs are paid out to a third party for the client's benefit — filing fees, court reporter, expert witness, PACER charges, process server. Soft costs are firm-incurred (copies, postage, Westlaw/Lexis time) recovered through billing. Firm overhead (bar dues, CLE, malpractice premium) is never billed to a client matter. Misclassification is the most common source of pre-bill rework.

Most firm policies require submission within 30 days of the expense date so costs land on the right month's pre-bill. Late submissions risk write-down by the responsible attorney or rejection by the client.

Itemized receipts only — credit-card slips without line detail are not sufficient for advanced client costs that will be passed through to the client. For meals, the receipt must show items ordered.

IRS substantiation requires who, what, when, where, why for any client or business meal. Without attendees and business purpose noted, the deduction fails on audit and the client may dispute the line on the pre-bill.

Use the current calendar-year IRS standard mileage rate (changes annually, sometimes mid-year). Record start and end addresses plus matter purpose — courthouse trips, deposition travel, and client-site visits are reimbursable; commute miles to the office are not.

Pull matter numbers from Clio, MyCase, or whichever PMS the firm uses. Unassigned costs default to firm overhead and are not recoverable from the client. Sub-matters matter — a deposition cost on the wrong sub-matter shows up on the wrong client invoice.

Use the GL account that matches the cost type — filing fees, expert fees, transcripts, travel, copies. Consistent coding makes utilization and realization reporting meaningful at month-end.

Match each reported line to the corporate-card or personal-card transaction. Catches duplicate submissions (line submitted twice) and missing items (charge on the card with no expense entry).

The responsible attorney has the only judgment on whether a cost is properly billable to the client matter. They flag write-downs before the line ever hits a pre-bill — easier to suppress here than to explain to the client later.

Re-categorize, re-code, or remove any line the attorney flagged. Document write-down reasons in the expense memo so the same question doesn't recur next month.

Required for any line over the partner-approval threshold (commonly $1,000 per item or $5,000 aggregate) and for any first-class travel, expert engagement, or expense outside the engagement letter's scope. Capture the approval in writing — email or e-signature.

ACH to the submitter's account on file is standard for most firms; physical checks on request. Verify banking details on file are current — stale ACH info is a frequent cause of week-late reimbursements.

Hard costs flow to the client's matter ledger so they appear on the next pre-bill. Soft costs flow to the firm's recoverable-cost account. Posting on the wrong side of the line is a Rule 1.15 issue if it touches trust funds.

Never disburse against an unfunded or underfunded client retainer — a negative IOLTA balance for any individual client triggers an automatic state bar referral in most jurisdictions. Three-way reconciliation must show the matter ledger covers the draw before any payment issues.

The bookkeeper records the payment date, ACH or check reference, and signs off. This entry is what reconciles to the bank feed at month-end.

Store the signed report and receipts in NetDocuments, iManage, or whichever DMS the firm uses, profiled to the matter. State bar minimums for trust-related records are commonly 7 years post-matter close — keep the schedule consistent so retention runs cleanly.

End-of-month tie-out: total reimbursements posted in the PMS should equal total disbursements from the operating account on the bank feed. Variances investigated before the books close.

For a state bar trust audit, malpractice carrier review, or client cost-recovery dispute: pull the report, receipts, approvals, ledger entries, and bank evidence in one package. Workflow runs that captured signatures and approvals inline make this a 30-minute task instead of a half-day search.