Outside Counsel Billing Guidelines

Zscaler is a dynamic and results-oriented client. We work best with counsel who understand our legal and business objectives and demonstrate they value results as much as we do. We hope these guidelines state billing processes that are already a part of your practice. In the case of any inconsistency between these guidelines and an engagement letter between Zscaler, including its subsidiaries, and your law firm, these guidelines will control.

We reserve the right to modify these guidelines at any time. Updates to these guidelines shall constitute written notice to outside counsel. We will not pay for fees or expenses billed in violation of these guidelines.

Outside counsel must send all invoices to [email protected] for processing. All inquiries regarding invoice submission process and invoice payment information should be directed to [email protected] and [email protected].

Outside counsel must submit all invoices for work performed in a month no later than the end of the month following the month in which the work is performed (the “Due Date”). For example, work performed in the month of February is due by the end of March. Each invoice should include only one month of fees and expenses, and only one invoice should be submitted per month per matter. Attorney work must be billed to the proper matter. Invoices containing more than one month of fees and expenses or with work billed to the wrong matter will be rejected and the resubmission will be subject to a lateness penalty. Exceptions to this policy must be approved in writing by Zscaler in its sole discretion. Zscaler’s standard payment terms are Net 45, unless an exception has been pre-approved by Zscaler in writing. Zscaler may elect to pay an invoice within Net 30 and receive a discount of 5% or Net 15 and receive a discount of 10% in addition to any other discounts provided by outside counsel.

Zscaler may reject an invoice if it is submitted with significant errors. To resubmit an invoice that has been rejected, adhere to the following process: 

• Resubmit the rejected invoice. When submitting, please use the same invoice number.
• Be sure to fully address the reason the invoice was rejected.
   

Rejected invoices must be resubmitted within 15 business days of the date the invoice was rejected. Resubmitted invoices received after this deadline will be rejected and not paid or, at our discretion processed and subject to a penalty.

The following fees are prohibited:

• Administrative, clerical, and/or secretarial work (A non-exhaustive list is included in Appendix A)
• Time spent by attorneys performing paralegal work (A non-exhaustive list is included in Appendix B)
• Proposals by the firm for new matters or business or sending informational newsletters
• Conflicts checks and clearance
• Preparation of budgets, invoices, or responses to billing questions
• Preparation of audit response letters or auditor requests unless such preparation requires substantive legal work
• Talking with press or non-parties regarding any matter unless pre-approved by Company
• Training or education of firm’s personnel
• Basic research on matters presumed to be within the firm’s expertise
• Legal research that exceeds 3 hours without Company approval (approval must be noted on the invoice entry)
• Internal conferences or memos that do not address substantive issues or strategy
• Travel time
• Responses to motions to disqualify the firm or a specific firm attorney
• Responses to sanctions requests and orders, orders to show cause or similar proceedings when tied specifically to the work performed by the firm or a specific firm attorney
• Fees for staff members to learn substantive areas of law or to ramp up or familiarize themselves if they are replacing another staff member
• Professional development time of legal resources at the firm
• Graphics and desktop publishing
• Unapproved document translation

All invoices must reflect the following:

• Client Name
• Client Number
• Invoice Number
• Matter Number
• Matter Name
• Matter Description
• Correct Zscaler legal entity
• Name(s) of Zscaler employee(s) working with you on the matter
• Appropriate UTBMS Task, Activity, and/or Expense Code*
• Date range in which work was performed
• Summary of personnel and rates for each invoice or matter*
• Matter total for work performed during the date range (each matter to be billed separately)
• The name and level of the timekeeper performing the task*
• For expenses: vendor name, date(s) incurred, purpose of charge
• Currency (including USD equivalent for international billing)
• Time spent on each task to the nearest tenth (.10) of an hour.*
• Remittance address

*Indicates that this does not need to be included on Alternative Fee Arrangements (AFA). Please note that it is an AFA on the invoice. 

Timekeepers should enter and release their time at least weekly and must accurately record time spent on each task and bill only for the time spent on the task. Unless otherwise authorized by us in advance, each entry should reflect a separate task and must state the nature of the work performed and the time spent by each timekeeper. Descriptions such as “For services rendered” or “Document review” are unacceptable. 
For communications (telephone, email, letters, etc.), the entry must identify the parties to the communication and a general statement of the subject of the communication.

Zscaler believes that block billing does not provide adequate detail to assess the work that was done and therefore prohibits block billing for time entries in excess of 6 minutes, though short tasks can be combined to total 6 minutes. Zscaler defines block billing as multiple (and different) tasks aggregated into a single line item. Tasks are considered to be “different” if the tasks would fit into more than one UTBMS Task Code.

Because block billing limits Zscaler’s ability to effectively monitor its legal spending, line items that are block billed will be rejected. They may be resubmitted/appealed in accordance with the resubmission/appeal guidelines but will be subject to penalty reduction of 15%; alternatively, at our discretion, we may elect to pay such block-billed line items but reduce them by 10%; such reduction is non-appealable. If resubmitting/appealing block billed entries, counsel must unblock the entry and reduce each line by 15%.

Billing rates must be reviewed and are subject to our approval before work commences on our behalf. Invoices presented for payment before billing rates are approved and without written consent from Zscaler will be rejected. 

Zscaler will review rate increase requests for existing timekeepers once per year, for an effective date of January 1 of the following year. Rate increase requests must be submitted by November 1 of any given year, i.e., 60 days in advance of the effective date; any requests submitted after November 1 will be rejected. All requests should be accompanied by a narrative that justifies the higher rate, and requests are not guaranteed to be approved. Reasons such as inflation, salary increases, and years of experience are not acceptable justifications. If an increase is approved, the new rate will be held for a minimum of 24 months. Limited exceptions to these rules may be made, primarily when an associate is promoted to partner, but does not include an associate moving to a more senior associate level.

We expect our firms to optimize their staffing based on the needs of the matter. Staffing will be limited to appropriate counsel who have been disclosed to us and changes in staffing will be subject to our prior consent. We expect our firms to apply reasonable staffing on each matter and no more than 3 attorneys may bill on any given matter without prior written approval. Zscaler will not pay for fees billed by summer associates, students, or law clerks. Zscaler will not pay for training time to train junior attorneys or get new attorneys staffed on a matter up to speed when another attorney transfers off the matter, as this should be considered part of the firm’s overhead.

We expect all timekeepers to work efficiently and avoid devoting excessive hours to a single project on any particular day. We will not pay for more than eight (8) hours of time spent by any one timekeeper on Zscaler matters in a given day, unless approved in advance (must note approval on invoice line entry). This exclusion does not apply to M & A matters, security offerings, and time spent at trial or other court hearings or deposition. 

No more than one partner should attend meetings or calls unless representing different practice areas or as otherwise approved by Zscaler (approval must be noted on the invoice entry). While some internal discussion among firm members is expected, any invoice where internal communication is more than 10% of the total amount billed will be flagged and may require additional follow-up.

Costs and expenses submitted for reimbursement will be actual costs incurred by outside counsel without markup. The following costs and expenses are prohibited:

• Secretarial, word-processing, proofreading, IT, or other administrative services
• Overtime compensation
• Other overhead or capital expenses
• E-filing costs
• Messenger, courier, overnight, and expedited mail charges
• Standard postage
• Charges for use of ordinary office equipment (scanners, printers, etc.), including page costs or per page of any printed documents
• Supplies or equipment (including office supplies)
• Internal computer time
• Lexis, Westlaw, or other computerized research unless approved in advance by Zscaler
• Lexis, Westlaw, or other computerized research subscription fees
• Seminars, books, or periodicals without prior approval by Zscaler
• All communication charges including telephone (local, long-distance or mobile), telephone conference services, video conference services, faxes (sending or receiving)
• Travel agency fees
• Data storage costs without prior authorization
• Late fees, setup, or cancellation charges without prior authorization
• Charges for photocopies and scanning
• Business or first-class travel expenses
• Local travel (travel that is equal to or less than 50 miles one-way from the timekeeper’s main office) including employee overtime travel, parking charges, tolls
• Meals
• Town car or limousine service
• Unidentified or miscellaneous charges, seminars, books, periodicals
• Long-distance travel expenses unless prior approval secured

Any expense greater than $300 USD requires Zscaler’s prior written consent. Expenses should be itemized and supported by receipts for any expenditure in excess of $25.

Third-party service providers (e.g., local counsel, e-discovery vendors, consultants, experts, copy services, litigation support) will not be retained without Zscaler’s prior authorization (authorization must be noted on the invoice). This prohibition does not apply to court reporters and videographers provided such providers charge reasonable and customary fees. All third-party providers will be overseen by outside counsel. Invoices for work performed by third-party providers will be billed via the supervising law firm’s invoice and shall include the third-party provider’s invoice as an attachment. The supervising attorney will review such invoices for accuracy and reasonableness at no charge to Zscaler. 

When reducing or rejecting specific line items, Zscaler will reject an invoice in its entirety. If the firm wishes to appeal a line item reduction, they must resubmit the invoice in question, including the line items they are appealing, with a note explaining the reason for the appeal. Resubmitted invoices must use the same invoice number.
Appeals must be submitted within 30 days of the date the invoice was rejected. Appeals received after this deadline will be rejected and not paid or, at our discretion, paid subject to a penalty.

We encourage firms to use AI, including generative AI, where appropriate and practical to reduce administrative costs and manual tasks. However, if using AI, the firm is responsible for ensuring all protections are in place to safeguard Zscaler data and confidential information. Zscaler data or confidential information cannot be used to train AI tools, whether proprietary or third-party.

Any work product created by a Large Language Model (LLM) or other generative AI tool must be reviewed by a human attorney. Any time and cost associated with AI-generated work product shall not be passed on to Zscaler. If a timekeeper uses generative AI for a discrete task, they should note that in their time entry.

Neither outside counsel nor third-party providers are authorized to speak with press or non-parties regarding any matter unless pre-approved by Zscaler in writing. 

All law firms and legal service providers retained by Zscaler and any third-party providers used by such law firms and legal service providers agree to comply with the The Foreign Corrupt Practices Act of 1997 ("FCPA"). The FCPA, as amended, was enacted for the purpose of making it unlawful for persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.