Unbilled WIP in UK law firms: how to find it, value it and bill it

Author: Adam Khalid, Founder and CEO, Intel Made Simple. Sources last checked 28 October 2026.

Unbilled work in progress, usually shortened to WIP, is work a firm has done and has not yet invoiced. It appears on the management accounts as an asset and in the bank as nothing. A firm with a healthy order book can still struggle to pay salaries and tax because a large share of what it has earned sits in time entries that nobody has turned into a bill.

This guide covers four things: how WIP is measured in days, what a published example says it is worth, the two statutes that decide how fast a solicitor can recover unpaid costs, and a review you can run on your own matter list in one afternoon. It is written for UK firms that bill after doing the work: law firms first, and the same arithmetic applies to accountancy, advisory and recruitment practices.

What is WIP, and how do you measure it in days?

The Institute of Legal Finance and Management (ILFM) describes lock-up as the time it takes a firm to convert work undertaken into cash received, and says it is generally calculated by combining two measures. The first is WIP days, covering the period between work being carried out and the bill being raised (opens in a new tab). The second is debtor days, covering the period between the bill being issued and payment being received. This guide is about the first.

The usual way to express WIP in days is to divide the value of unbilled WIP by average daily fee income. The ILFM article does not prescribe that formula, so treat it as our working convention. What matters is that you pick one basis, apply it every month, and never mix a gross figure with a net one in the same ratio.

Our arithmetic, for illustration only: a firm with fee income of £2,000,000 a year earns about £5,479 a day (£2,000,000 divided by 365). If its unbilled WIP is valued at £250,000, that is 45.6 days of WIP. Billing 15.6 days sooner, down to 30 days, would turn about £85,600 of earned work into invoices. Those figures are invented to show the method, not a benchmark for any firm.

How much cash can WIP release? A published example

The ILFM gives a worked case. A firm generating £10 million in annual fee income earns approximately £27,000 in revenue each day. At 120 lock-up days, around £3.2 million may be tied up in WIP and debtors. Reducing this to 90 days could release approximately £800,000 in cash (opens in a new tab). The article's point is that the improvement does not depend on increasing fees, cutting staff or reducing investment. It comes from converting work already undertaken into cash more efficiently.

That example is lock-up, which includes debtors, so only part of the release comes from unbilled WIP. The split differs by firm, which is why the first step is to measure the two halves separately. Our guide to lock-up days shows how.

Why does work stay unbilled?

The ILFM article names the causes. Late or incomplete time recording can delay billing and distort the value of WIP (opens in a new tab). Work may then remain unbilled because billing decisions are postponed, matters are not reviewed regularly, or firms wait until completion rather than billing at appropriate milestones. It adds that these issues are rarely the responsibility of the finance team alone, and that fee earners, partners, management and finance need shared expectations.

Our reading of that: the cause is almost always a missing owner and a missing date. Nobody is named as responsible for each aged matter, and no date is set on which it will be billed or written down. A WIP review that ends without an owner and a date per matter has produced a report and no cash.

How fast can a solicitor recover unpaid costs?

Two statutes shape how quickly a solicitor can recover unpaid costs. Neither is a reason to delay billing. Both are reasons to bill correctly the first time.

Section 69 of the Solicitors Act 1974 (opens in a new tab) says that, subject to the Act, no action shall be brought to recover costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the section's requirements. The bill must be signed by the solicitor, or on their behalf by an authorised employee, or be enclosed in or accompanied by a letter that is signed and refers to the bill. It must also be delivered personally, sent by post to or left at the paying party's place of business, dwelling-house or last known place of abode, or delivered electronically where that party has indicated willingness to accept a bill in that form. A bill delivered electronically is treated as delivered on the first working day after the day it was sent, unless the contrary is proved.

The same section allows the High Court to let a solicitor start an action before the month has passed where there is probable cause for believing that the party chargeable is about to quit England and Wales, become bankrupt or compound with creditors, or do any other act that would tend to prevent or delay payment.

The practical consequence is ours, not the statute's wording: the one-month wait cannot begin until a compliant bill has been delivered. Unbilled WIP is therefore not only uncollected cash. It is cash whose recovery timetable has not started. A bill that is unsigned, or sent to an address the client never accepted for delivery, can add a month to a dispute without anyone noticing.

The second statute is the Limitation Act 1980, section 5 (opens in a new tab): an action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued. Six years is long enough that few firms will ever test it, which is the danger. WIP that has been ignored for years can drift towards a point where a claim is time-barred. When a cause of action accrued on a particular retainer is a question for your own legal adviser, and we are not giving legal advice here.

Firms that handle client money also work under the SRA Accounts Rules (opens in a new tab), which require systems and controls appropriate to the nature and volumes of client transactions. If a billing clean-up involves moving money between client and office accounts, keep it with whoever owns accounts compliance in your firm and follow those rules to the letter.

How do you run a WIP review in one afternoon?

This is the method we use as a starting point. It needs one export from your practice management or time-recording system and one person with authority to decide.

1. Export unbilled WIP by matter, with fee earner, client, value, date of last time entry and date of last bill.
2. Band each matter by days since the last time entry: up to 30, 31 to 60, 61 to 90, 91 to 180, and over 180. The bands are ours; change them to suit your matter lengths.
3. For every matter over 60 days, record one of four decisions: bill now, bill at a named milestone on a named date, write down with partner sign-off, or query because the file and the time record do not agree.
4. Check the queried matters against file activity. Emails sent, documents created and hearings attended with no matching time entry point to unrecorded time, which understates WIP rather than overstating it.
5. Name an owner for each matter. Put the next review date in the diary, no more than 30 days out.
6. Repeat monthly and chart WIP days against the same fee-income basis. A falling line is the only proof the review is working.

The ILFM's list of practical controls (time recording, WIP and debtors, early intervention, KPIs and management information) matches this shape. The difference we add is the owner and the date on every aged matter.

What does milestone billing do to the amount you carry?

The ILFM lists waiting for completion, instead of billing at appropriate milestones, as a reason work stays unbilled. Our arithmetic on invented figures shows the size of the effect. Suppose a matter earns £5,000 of recorded work in each of six months.

• Billed once on completion at the end of month 6: the work from month 1 waits five months for a bill, month 2 waits four, then three, two, one and none. That is 15 months of £5,000, or £75,000 pound-months. Divided by six, the firm carries an average of £12,500 of unbilled work on this matter.
• Billed at two milestones, the end of month 3 and the end of month 6: the waits are 2, 1 and 0, twice. That is 6 months of £5,000, or £30,000 pound-months, and an average of £5,000 carried.

Same fee, same work, same client. The only change is the bill date, and the average balance the firm funds on that matter falls by 60%. Agree the milestones in the engagement letter so the client expects the bill when it arrives.

What should a monthly WIP report show?

The ILFM names time recording, WIP and debtors, early intervention, and KPIs with management information as practical controls. A one-page monthly WIP report built on those four headings is enough for most small firms. Ours would carry:

1. Total unbilled WIP and WIP days, on the same fee-income basis every month.
2. The five age bands from the afternoon review, with value and number of matters in each.
3. The ten largest unbilled matters, each with a named owner and a next billing date.
4. Matters with time recorded and no bill in the last 90 days, listed by fee earner.
5. Matters where file activity and time entries disagree, which usually means unrecorded time.
6. The trailing twelve-month line of WIP days, so a partner can see direction at a glance.

If a partner cannot read that report in five minutes and name the three matters to bill this week, it is too long. Cut rows until they can.

What should you automate, and what stays with a person?

Steps 1 and 2 are mechanical and suit automation: pulling the export, banding by age and listing matters with time recorded and no bill. Steps 3 and 5 are judgement and stay with a partner. The reasons are set out in our guide to AI-assisted billing review: the evidence says AI helps on routine, well-defined tasks and makes errors on judgement-heavy ones, and the SRA is explicit that accountability cannot be delegated.

Where should a firm start?

Run the afternoon review once on your own data before you buy anything. If the result is a list of matters with owners and dates, you have a plan. If it shows that time is not being recorded at all, the fix sits earlier in the chain and our Leak Scan is built to find it: it is free, and it flags where cash leaves the process between the work and the bank. For firms that want the work done for them, the AI Readiness Audit starts at £1,500, and all our prices are on the pricing page. The page for UK law firms shows how we apply this to the sector.

WIP questions firms ask

What is unbilled WIP in a law firm?

Unbilled work in progress is work a firm has done and not yet invoiced. It shows on the management accounts as an asset while the bank balance shows nothing for it.

How do you measure WIP in days?

Divide unbilled WIP by average daily fee income, where daily fee income is annual fee income divided by 365. The ILFM does not prescribe a formula, so this is our working convention. Pick one basis and keep it every month.

How long must a solicitor wait before suing on an unpaid bill?

Under section 69 of the Solicitors Act 1974, and subject to the Act, no action may be brought to recover costs before one month has passed from delivery of a bill that meets the section's requirements. The High Court can allow an earlier action where there is probable cause to believe the paying party is about to leave England and Wales, become bankrupt, compound with creditors or do something else that would prevent or delay payment.

Who should own aged WIP?

The ILFM says these issues are rarely the finance team's responsibility alone and that fee earners, partners, management and finance need shared expectations. Our practical rule is one named person and one date per aged matter.

How often should a WIP review run?

Monthly, on the same basis, with the next review date for each aged matter no more than 30 days out. A falling WIP-days line over several months is the evidence that the review is working.