What is the difference between WIP and accounts receivable?

WIP hasn't been billed yet. Accounts receivable has been billed but not paid.

How do you calculate WIP days?

Divide your WIP balance by annual fees billed and multiply by 365.

What is a good WIP number for a law firm?

There's no official benchmark. Firms that bill monthly should see most WIP under 30 days old. Watch your own trend and compare by practice area.

Can I pay WIP from a client's trust account?

No. The work has to be billed first, and the transfer has to follow your engagement terms and trust rules.

How often should a law firm review its WIP report?

At least monthly, before invoices go out.

Is WIP taxable in Canada?

Yes. Since the 2017 federal budget, Canadian lawyers have had to include WIP in income, after a five-year phase-in.

What Is WIP at a Law Firm? Work in Progress Explained

Q: What is WIP at a law firm?

WIP is the value of time and expenses that have been recorded but not yet billed.

WIP at a law firm is work done but not yet billed. Learn how to calculate WIP days and lockup, read a WIP report, record WIP, and handle flat fees and contingency.