What is WIP in a law firm, and why does it matter?

WIP (work in progress) in a law firm is the value of work fee-earners have done but the firm has not yet billed. It is usually the recorded time on open matters, valued at the charge-out rate. It matters because unbilled work is not cash: until it is billed and paid, the firm has funded the client's matter out of its own pocket.

WIP is half of what firms call lock-up; the other half is money billed and not yet collected. This post is part of our series on law firm profit margins and what drives them. It is about running the firm day to day. How WIP is valued in your accounts, and for tax, is a matter for your accountant, and nothing here is accounting or tax advice.

What does WIP mean in a law firm?

In most firms, WIP is the total of time recorded against a matter and not yet billed, priced at each fee-earner's hourly rate. A solicitor who records six units on a file creates WIP worth six units at her rate. Some firms also carry unbilled disbursements (fees paid out on the client's behalf, such as search fees or court fees) as a separate line.

Two features make WIP different from almost any other asset:

• Its value is a guess until it is billed. The rate card says what the time is worth. The client, the retainer and the matter's outcome decide what it is actually worth.
• It loses value with age. The longer time sits unbilled, the more likely it is to be written down, because the client has forgotten the work, the matter has changed, or the fee-earner has lost confidence in the entries.

What is the difference between WIP and lock-up?

WIP is money the firm has earned but not asked for. Debtors (or receivables) are money it has asked for but not received. Lock-up is the two together, usually expressed in days of fee income. The Law Society's 2026 Financial Benchmarking Survey, produced by Hazlewoods, reported a median lock-up of 134 days excluding unbilled disbursements, down from 146. The full picture is in our post on law firm lock-up.

The split matters because the causes, and the people who fix them, are different. High WIP is a billing discipline problem, owned by fee-earners and their supervisors. High debtors is a credit control problem, owned by whoever chases the money. A firm that reports only the total cannot tell which to fix.

How do you calculate WIP days?

WIP days tells you how many days of fee income are sitting unbilled. The common formula is:

• WIP days = (WIP value ÷ annual fee income) × 365.

A worked example, with invented numbers: a hypothetical firm with fee income of £3,000,000 a year and £740,000 of unbilled WIP has WIP days of (740,000 ÷ 3,000,000) × 365, which is about 90 days. On average, work in that firm waits three months before anyone asks the client to pay for it.

Two cautions. First, value WIP consistently: if half your fee-earners record time on fixed-fee matters and half do not, the total mixes real billable value with notional value. Second, a firm-wide number hides the detail. Calculate WIP days by department and by fee-earner, and look at the age profile, not just the total.

Why does WIP build up in law firms?

In revenue operations generally, money that is earned and not invoiced tends to have one of a handful of causes, and law is no exception. The usual suspects:

• Billing at the end of the matter only. Some work genuinely can only be billed on completion (much conveyancing, for example). Much of it could be billed in stages but is not, by habit.
• Nobody owns the bill. The fee-earner assumes accounts will prompt; accounts assumes the fee-earner will ask.
• Time recorded late. If time is entered a week after the work, the bill cannot go out until it is, and entries made from memory are the ones that later get written down. See time recording in law firms.
• Fear of the client's reaction. A fee-earner who suspects the bill is higher than the estimate delays sending it, which usually makes the conversation harder, not easier.
• Estimates not updated. The SRA Code of Conduct requires solicitors to give clients the best possible information about the likely overall cost of a matter, both at the time of engagement and when appropriate as the matter progresses. A matter that has outgrown its estimate without a revised one often stalls at billing. Your COLP can advise on what your firm's procedure should be.
• Fixed-fee matters recorded as time. The WIP figure looks large, but it will never be billed at that value, so nobody treats it as urgent.

How can a law firm reduce WIP?

Most guides say "bill more often". That is right, and it is not a method. Here is a weekly routine that works in firms of five to fifty fee-earners.

• Monday: publish an aged WIP list. Every matter with unbilled time, grouped by age (0–30, 31–60, 61–90, over 90 days) and by fee-earner. Short, not a 40-page report.
• Agree a billing trigger per matter type. For example: on a monthly cycle, on reaching a set value, or on a named stage (issue, disclosure, exchange). Write it on the file at opening.
• Ask one question of every matter over 60 days. "What stops this being billed this week?" The answer is usually one of the causes above, and each has an owner.
• Treat write-offs as information. Before any WIP is written off, record why. Six months of reasons tells you more about pricing than any survey.
• Review the estimate at each stage. A revised estimate sent early turns a billing argument into an agreed change.

How much WIP is normal for a law firm?

There is no reliable published UK benchmark for WIP days on its own that I could verify for small firms. The Law Society survey summaries publish total lock-up rather than the split. Some advisers quote their own targets, but I have not seen a methodology behind most of them, so I will not repeat them here.

What you can do is set your own baseline and track the direction. WIP days that rise three months in a row need a conversation, whatever the absolute number. And compare departments with themselves over time, not with each other: conveyancing and litigation will never look alike.

Does WIP affect profit, or just cash?

Both, in different ways. Aged WIP reduces cash immediately, because the firm has paid salaries for work it has not billed. It reduces profit when it is written off. And it hides problems: a firm with rising WIP can report good recorded hours for months while realised fees fall. That is why the cost structure of a firm and its WIP have to be read together.

How does WIP differ by practice area?

The right billing trigger depends on how the work is paid for. A rough operational map, which your own retainers will refine:

• Residential conveyancing. Usually a fixed fee paid on completion from the sale or purchase funds. WIP here is mostly a measure of effort, not of money waiting to be asked for. The useful number is matters open past their expected completion date.
• Private client and probate. Often billed on hourly rates or a percentage, with interim bills possible on estates. Aged WIP on estates is common because nobody wants to bill the family during a bereavement. A stage-based billing plan agreed at the outset makes this much easier.
• Family. A mix of fixed fees for defined stages and hourly work for contested matters. WIP builds fastest on contested files where the estimate has been overtaken by events.
• Commercial and litigation. Usually hourly with monthly or stage billing. The risk is less the age of WIP and more its size relative to the last estimate.
• Employment and immigration. Often fixed fees per stage. WIP should be close to zero at each stage boundary; if it is not, the stage has overrun.

What should be in a WIP report?

Keep it to one page per department. The columns I would include:

• Matter, client and responsible fee-earner.
• Unbilled time value and unbilled disbursements, separately.
• Age of the oldest unbilled entry.
• Current estimate, and billed to date against it.
• Agreed billing trigger, and the date it is next due.
• A free-text "blocker" column the fee-earner fills in.

That last column does more work than the rest put together. It turns a report into a conversation.

A trap: WIP that was never going to be billed

The most misleading WIP is time recorded on a matter the client never agreed to pay for in that way: extra calls on a fixed-fee file, a partner's review that was never in the estimate, a long email chain answering a client's worried questions about progress. It looks like an asset. It is actually a record of cost.

A lot of that last category is avoidable. Clients call for updates because they have not heard anything. A fee-earner answering "where are we?" three times a week is spending time that is rarely billed and often written off.

Where does WasilX fit?

Each fee-earner at a WasilX firm has a personal assistant that covers their calls while they are in court and drafts matter updates for the fee-earner to approve. That does not change how you record or bill time: WasilX does not record time or push entries into your practice management system. What it does is take some of the unbillable "where are we?" calls off the fee-earner's day, so fewer hours disappear into WIP that will later be written off. If that is a problem in your firm, we are happy to talk it through.

For the wider numbers, see fee-earner utilisation and billable hours in UK law firms.

Frequently asked questions

Is WIP an asset in a law firm? In management terms it is work the firm expects to bill, so it is usually treated as an asset. It is only worth what the client eventually pays, and it tends to lose value with age. How it is valued in your statutory accounts is a question for your accountant.

What is the difference between WIP and debtors? WIP is work done and not yet billed. Debtors are bills sent and not yet paid. Together they make up lock-up.

How do you calculate WIP days? Divide unbilled WIP by annual fee income and multiply by 365. Calculate it by department and fee-earner as well as firm-wide.

Why is WIP written off? Usually because the time exceeds what the client agreed to pay, the matter is on a fixed fee, the entries are too old or vague to defend, or the relationship would not bear the bill. Record the reason every time.

Should fixed-fee matters carry WIP? Recording time on fixed-fee work is useful for learning what a matter really costs. Report it separately, so it does not inflate the WIP the firm expects to bill.