Work in progress and debtors in law firms are worth nothing until turned into cash. PricewaterhouseCoopers’ 10th annual survey of financial management in law firms shows a ‘marked deterioration’ in cash management and reveals a serious problem among the law firms that took part, with 65% reporting unbilled work in progress or unpaid bills more than 150 days old, a figure up 20% on the previous year’s survey.
But work in progress does not get billed and bills do not get collected by themselves. As many managing partners have often had to say to their partners: “If each of you was a sole practitioner, you would all be bankrupt by now.”
