Lock-up is the single number that explains why a profitable law or accountancy firm runs short of cash, and it is the gap most of these firms borrow to bridge. Lock-up is the combined working-capital days tied up in two places: work done but not yet billed (WIP) and bills raised but not yet paid (debtor days). The Law Society's Financial Benchmarking Survey 2025 put average year-end lock-up across firms of all sizes at around 146 days, up from 143 the year before. That is close to five months between doing the work and seeing the cash — and the partners are still drawing monthly throughout.
Why lock-up bites partnerships harder than it looks
A limited company that runs out of cash cuts a dividend. A partnership or LLP can't, in practice, because partner drawings are how the people who own the firm get paid each month, and they expect them on time regardless of when clients settle. So lock-up lands directly on personal income: every extra day in WIP or debtors is a day the partners are, in effect, banking their own clients out of their drawings. Extend lock-up and you are funding the firm's working capital from the partners' pockets.
The split between the two halves matters as much as the total, because they fund differently. The 2025 survey data showed City firms carrying around 35 WIP days against roughly 70 for regional firms — City firms bill faster — but City firms then waited around 101 debtor days to be paid against roughly 70 for regional firms. One firm's cash is stuck in unbilled work; another's is stuck in unpaid bills. The cause dictates the cure.
WIP is a billing-discipline problem before it's a funding one
If your lock-up sits in WIP — work done, not yet billed — the first fix is not finance, it's billing cadence. Time recorded and left unbilled for weeks is cash you have chosen not to ask for. Firms that bill on interim or milestone cycles rather than at the end of a matter, and that write off less by billing while the work is fresh, pull WIP days down without borrowing a penny. A lender will see unbilled WIP and ask why it isn't a bill yet, because to them it's the softest part of the asset — unconverted, sometimes unrecoverable, and worth far less than a delivered invoice.
That said, some WIP genuinely can't be billed yet and still has to be funded. Litigation and contentious work carries disbursements — court fees, counsel's fees, expert and medical reports — that a firm pays out long before it can recover them, and on some matters before it can even raise a bill. Specialist WIP-and-disbursement facilities exist precisely for this: they advance against case costs and disbursements so capital isn't locked into files for a year or more, often as a revolving line drawn per matter. It keeps the firm's own cash free for payroll and growth rather than tied up in cases that will pay out eventually.
One regulatory point that catches mainstream lenders out: the SRA Accounts Rules treat money held for unpaid disbursements as client money in defined circumstances, and govern when a firm can move money from client to office account — generally only after a bill or written notification. A facility structured around a law firm's disbursements has to respect that boundary. Specialist legal-sector lenders build their products around it; a generalist sometimes has to be educated mid-deal, which slows everything down.
When the cash is stuck in debtors
If your lock-up is in debtor days — bills raised, clients slow to pay — you are funding the gap between billing and collection, and that is the textbook job of invoice finance. A facility advances a percentage of each raised invoice as soon as it's issued, so the firm gets most of the cash on billing instead of waiting out the debtor cycle, and the facility grows as fees grow rather than capping at an overdraft limit.
Two cautions specific to professional firms. First, recharged disbursements billed at cost are pass-through, not margin you control, and a financier will often strip them out of the eligible ledger — so the advance is against your fees, not the inflated invoice total. Second, the SRA's handling of client money rules out some invoice-finance structures that work fine for other sectors; client money cannot be commingled, and a facility has to be built around that. None of this rules invoice finance out for a law or accountancy firm — it shapes how the facility is structured and which lender can write it.
The right tool depends on which half of lock-up is heavy
Lock-up is one number, but the funding answer is not. Pull your WIP days and debtor days apart before you talk to a lender, because they point to different products:
- Heavy WIP from slow billing is a process fix first — bill more often, write off less — and only a funding question for the work you genuinely can't bill yet.
- Heavy WIP from disbursements on contentious or long-running matters wants a specialist WIP-and-disbursement facility that advances against case costs without breaching the Accounts Rules on client money.
- Heavy debtor days is an invoice-finance problem — fund the billed-but-unpaid gap and let the facility scale with fee income, with disbursements stripped from the eligible ledger.
- Lumpy lock-up around quarter-ends or seasonal peaks, where the issue is timing rather than a structural gap, often suits a cashflow loan underwritten on the firm's affordability rather than against individual files.
The firm that walks into a funding conversation with a lock-up analysis already split by WIP, debtors and service line gets to terms in the first meeting. The one that brings revenue and partner profit alone gets held while the underwriter works out how the cash actually behaves through a billing cycle. For how working-capital funding sits alongside acquisition and buy-in finance across the sector, see the professional-services sector page.