Law Firm Work in Progress: What WIP Is and How to Track It

Law Firm Work in Progress: What WIP Is and How to Track It

Law firm work in progress, or WIP, is the time your lawyers have recorded and the costs your firm has advanced that have not yet been billed to a client. It is the gap between doing the work and sending the invoice, and it can quietly grow when nobody reviews it.

WIP is where a firm's cash goes to wait. Legal Ease Bookkeeping, a Fort Worth bookkeeper that specializes in law firms, is covered near the end. Legal Ease Bookkeeping is a paid featured member of Sam's List.

What Law Firm Work in Progress Means

The short answer: WIP is unbilled time and costs. Hours a timekeeper has entered but not yet put on an invoice are WIP. So are filing fees, court reporter charges or expert invoices the firm paid for a client that have not yet been billed back.

It is measured by matter, then added up by client, timekeeper and responsible partner. It is not accounts receivable: receivable is billed and not collected, while WIP is not billed at all.

The limitation: WIP is only as accurate as the time entries behind it. Late entries, vague narratives and unrecorded costs mean the number understates the work or buries it.

Is Law Firm Work in Progress on the Books? It Depends on the Method

For most firms, WIP is a management measure first. Whether it also shows up on the financial statements depends on the accounting method.

A firm on the cash method generally records revenue when payment arrives, so unbilled WIP is generally not on the books as revenue. Your billing software tracks it, and the general ledger does not.

A firm on the accrual method may or may not book it. That depends on the firm's policy and what its CPA advises, so confirm the treatment with your CPA.

The limitation: advanced costs may sit in the ledger as a receivable or an expense, so the billing system and the ledger will not tie out unless someone reconciles them.

Unbilled Time and Costs: What Counts and What Does Not

Two kinds of items belong in WIP.

Unbilled time. Recorded hours, valued at the matter's rate. On flat-fee work, hours may be tracked internally but never billed hourly.

Unbilled costs. Costs advanced for a matter that have not been invoiced. Here they simply count toward WIP.

One thing never counts: client trust money. Funds held in a trust account for a client are not WIP and are not the firm's money until they are earned and billed under your state's rules. Moving money out of trust follows your state bar's rules, not your WIP report.

The limitation: a WIP report can make trust funds look like cash available against unbilled work. They are not, so keep the two reports separate.

How WIP Ages and Why Old WIP Gets Written Down

WIP gets harder to bill the longer it sits. The client has forgotten the context, and a surprise invoice for work done six months ago starts a conversation nobody wanted.

A WIP aging report sorts unbilled amounts by how long ago they were recorded. The example below is illustrative, with round numbers that are not a benchmark.

Age of WIP (illustrative)	Amount	Share of total
0 to 30 days	$48,000	40.0%
31 to 60 days	$31,000	25.8%
61 to 90 days	$19,000	15.8%
91 to 180 days	$14,000	11.7%
Over 180 days	$8,000	6.7%
Total	$120,000	100.0%

In this example, $22,000 is more than 90 days old, so look there first. Some may be billable after a call to the client. Some may need a write-down, meaning the firm decides not to bill it and records that decision. Write-downs are a partner's call, made with the fee agreement in front of them.

The limitation: aging is a warning, not a verdict. Some old WIP is legitimate, such as work on a matter that bills on a milestone or at the end of a case. Check the matter terms before assuming old WIP is a collection problem.

What a WIP Aging Report Should Show Partner by Partner

A firm-wide total hides what matters. A good report lets each partner act.

• By responsible partner and matter, with the age buckets above.
• Unbilled time and unbilled costs, separately, since they clear differently.
• Last bill date. A matter not invoiced in four months stands out.
• Write-downs. What was cut, by whom and why.

Realization, the share of recorded time that ends up billed and collected, is the natural companion measure. High WIP with falling realization means work is being recorded that does not get paid for.

The limitation: more columns do not make a better report. If partners will not read ten fields, give them four.

Who Tracks Law Firm Work in Progress: Bookkeeper, Billing System, Partners

Three groups touch WIP, and each controls something different.

The billing system holds the time entries and costs. That is where WIP lives.

The bookkeeper reconciles the billing system to the general ledger and pulls reports into the monthly financials, including WIP totals and aging by partner.

The partners decide what gets billed, written down or held. A bookkeeper should not make that call.

The limitation: a bookkeeper tracks WIP, but the firm's billing system and its partners control it. If time is entered late, or bills sit on a partner's desk, no monthly report fixes that.

Where Legal Ease Bookkeeping Fits

Legal Ease Bookkeeping is based in Fort Worth, Texas, was founded in 2016 and has 12 employees. It serves clients nationwide, lists a minimum of $500,000 in revenue, and lists law firm bookkeeping as its specialty.

We are not saying Legal Ease offers a WIP product or report. The reason to name it is the specialty: ask a law firm bookkeeper whether monthly reporting can include WIP, aging and trust account reconciliation, and how it would get data from your billing system.

Legal Ease has 9 verified client reviews on Sam's List as of 2026-10-02. Each review is submitted by an individual who identifies as a client of the firm and rates it on communication, subject-matter knowledge, and overall satisfaction. Reviews reflect those individual experiences and do not represent an endorsement by Sam's List. Legal Ease is a paid featured member of Sam's List. Ratings and rankings are not indicative of future performance or results.

The limitation, plainly: the $500,000 minimum puts smaller practices outside its range, and what is in scope for any engagement is something to confirm with the firm directly. You can browse bookkeepers on Sam's List to compare other options.

Frequently Asked Questions

What is work in progress in a law firm?

Work in progress is the time your timekeepers have recorded and the costs your firm has advanced that have not yet been billed. It is unbilled work, not a receivable. Firms track it by matter, client and responsible partner.

Is WIP an asset on a law firm's balance sheet?

It depends on the accounting method. A cash-basis firm generally does not record unbilled WIP as revenue, so it usually is not on the books. An accrual firm may or may not record it, depending on its policy. Ask the firm's CPA how your firm treats it.

What is a WIP aging report?

A WIP aging report groups unbilled time and costs by how long ago they were recorded, such as 0 to 30 days or over 180 days. It shows which work is getting stale and may need to be billed, reviewed or written down.

Is client trust money part of WIP?

No. Money held in a client trust account is not WIP, and it is not firm money until it is earned and billed under your state's rules. A WIP report should never be used to decide when to move funds out of trust. Follow your state bar's rules.

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About the author: Kimberly Green is cofounder of Sam’s List, a directory and matching platform for financial professionals.