Sector
Professional practices carrying WIP
Law firms, patent attorneys, surveyors and consulting engineers pay their people to do chargeable work long before they can bill for it. Until a bill goes out, that work is work in progress: real value, often already counted in the accounts, but not cash and not yet a debt anyone owes. This page is about financing the practice's own cash cycle, not about funding a client's legal claim.
How money moves
The work is done long before there's a bill to pay
A practice doesn't usually bill as the hours are worked. It bills at the points its engagement terms allow: monthly on some matters, at a stage or on completion on others. Everything done between those points is work in progress, paid for in salaries but not yet billed.
Chargeable workWork in progress
- Time recorded against a matter or project
- Unbilled work builds up
- Billing point reached
Billing and collectionIncome
- Bill delivered to the client
- Client's payment terms
- Practice paid
Running the practiceCosts
- Fee earner salaries
- Support staff
- Premises and insurance
The practice carries two waits back to back: the time from doing the work to billing it, then the time from billing to being paid.
Some matters make the first wait very long. On a UK patent application, for example, GOV.UK says getting a patent can take several years, and the examination itself could take place several years after the application, and the applicant may have to amend it in response (GOV.UK: patent your invention).
Where the sector gets misread
What a generalist lender sees, and what's actually happening
A profitable year that should have produced cash
Under FRS 102, a service contract in progress at the year end is generally recognised as revenue in proportion to how complete it is, so reported profit can include work that hasn't been billed, let alone paid.
A practice holding plenty of money
Some of it may be client money, under rules that differ by profession. For solicitors, the SRA Accounts Rules put money a client pays on account of costs, with no bill delivered, into client account, and the firm can only use it for its own costs after giving a bill or other written notification of the costs incurred. That rule is the SRA's and applies to solicitors only. A RICS-regulated surveying firm that holds client money follows RICS's own client money standard instead.
A practice with debtors, so invoice finance should work
Work in progress isn't a debtor. Until a bill is raised there is no invoice for a lender to advance against.
The measure that matters
Lock-up, not fee income
Lock-up is the time between doing chargeable work and being paid for it: unbilled work in progress plus bills still unpaid. Two practices with the same fee income can need very different amounts of working capital if one bills monthly and the other waits for completion.
The useful questions are how much work in progress is unbilled and for how long, how much of it sits on a few large matters, and how quickly bills are paid once delivered. Year-end accounts are a single snapshot and won't show how long work sat unbilled.
Where finance fits
A credit line while the work is unbilled, invoice finance once it isn't
A facility can carry the time between doing the work and billing it. It can't turn work a client won't pay for into something worth lending against.
Litigation funding, where a third party backs a party's legal costs, is a separate market with its own funders. For England and Wales, the Civil Justice Council's June 2025 final report recommended replacing that market's self-regulatory approach with statutory regulation. We don't work in that market.
Sources
Where these points come from
- SolicitorsSolicitors Regulation Authority: taking money for your firm's costs
- SurveyorsRICS: client money, requirements for RICS-regulated firms
- WIP in accountsHMRC Business Income Manual BIM33020: meaning of work in progress
- WIP valuationHMRC Business Income Manual BIM33165: professional work in progress
- Patent timingGOV.UK: patent your invention
- Litigation fundingCivil Justice Council: review of litigation funding, final report (June 2025)
Talk it through
Need another perspective?
Describe where things stand in a sentence or two: who pays, how, and where the gap sits. We'll tell you whether it's something we can help with. There's no charge for this.
Thank you. It's with our team now.
A person reads every enquiry and we'll come back to you with what we think the right next step is. No obligation at any point.
What happens next
- A person on our team reads it against how businesses in this sector are actually paid.
- If we can help, we introduce you to a specialist partner we have vetted and tell you who they are.
- No charge and no obligation at any point. You decide whether to go further.
Adam Parker
Founder of Muswell Rose Consulting Ltd, which trades as Established Finance · former Managing Director of Penny, an invoice finance business, with 15+ years across mortgages, commercial finance and fintech lending.
Last updated:
Practical questions
Before you get in touch
What information do I need?
To start, just a description of what’s actually happening in the business. If it progresses, the specialist partner will ask for the usual things: recent accounts, a sense of turnover and trading history, and details of the specific need.