The New Zealand Law Society says its inspectors have noted that a number of law firms need to review their billing practices to ensure that their billing is open and transparent.

The Law Society says an office service fee or expense recovery which is not an actual cost to a law practice cannot be described as a disbursement.

"A disbursement is a payment charged to the practice by a third party which is then on-charged to the client - such as LINZ land titles and lodgment fees.

"Fees and disbursements need to be clearly separated on the bill," the Law Society says.

The Law Society has provided further information on the requirements for open and transparent billing here.

Law Society inspectors

The Law Society has a team of nine inspectors based in Auckland (4), Christchurch (1), Hamilton (2) and Wellington (2), with a Wellington-based manager plus one full-time administrator.

The inspectors carry out the objectives of the Law Society's Financial Assurance Scheme, which has the objective of protecting money entrusted to law practices. The Scheme - which was established in 1998 - applies to all lawyers except those who do not receive or hold money or other valuable property in trust for anyone, do not invest money for anyone, do not have a trust account, or do not receive fees or disbursements in advance of an invoice being issued.

Law Society inspectors visit many of New Zealand's law firms during the year. As well as carrying out reviews of lawyers' trust accounts and ensuring compliance with trust accounting rules, the inspectors assist in educating lawyers and their staff in the rules and requirements.