Accounting and internal audit may have qualms about AFAs with law firms

One of the panelists at the IBA annual conference this week stated that the accounting functions of some companies have problems with arrangements struck between the law department and law firms that vary from traditional hourly billing. The reason is that the companies, and their internal audit functions, are worried more broadly about corruption with vendors.

Software flags arrangements for payment that leave room for discretion by the company. From their perspective, open-ended procurements and vague terms about payment for value raise risks of third-party payee abuse. As if alternative fee arrangements weren’t tricky enough!