Law firm accounts receivable is easy to ignore until cash gets tight. By then, the balances that could have been collected with one polite email are 90 days old. This guide covers what a healthy AR picture looks like, which numbers to watch each month, and when to follow up on each invoice.
What is law firm accounts receivable?
Law firm accounts receivable (AR) is the money clients owe for work the firm has already billed. An AR aging report sorts it by age: current, 1 to 30, 31 to 60, 61 to 90 and over 90 days past due. The older a balance gets, the less likely it is to be paid in full.
How to read a law firm AR aging report
Read an AR aging report by bucket, not by total: a healthy report has most of its balance in the current and 1 to 30 day columns. Every major billing system can produce one. In Clio, QuickBooks Online and LeanLaw it sits under the reports or receivables menu. Run it by client, not just in total. The total tells you how much is owed. The buckets tell you whether you have a problem.
| Bucket | What it usually means | What to do |
|---|---|---|
| Current (not yet due) | Normal billing cycle | Nothing yet. Make sure the invoice reached the client. |
| 1 to 30 days past due | Mostly forgotten or buried invoices | Two friendly email reminders, then a call around day 10 to 14. |
| 31 to 60 days | A cash-flow issue or an unspoken question about the bill | A personal call. Offer an approved payment plan. |
| 61 to 90 days | Real risk of a write-off | Regular, documented contact. Flag to the billing attorney. |
| Over 90 days | Hard to recover | A firm decision: keep working it, write it off, or refer it out. |
What’s normal for law firm accounts receivable?
The average law firm collects about 92 percent of what it invoices, and the median firm has 27 days of revenue tied up in unpaid invoices, according to Clio’s 2026 Legal Trends benchmarks. Practice area, client type and billing model all move these numbers, so treat them as reference points:
- Industry averages. Clio’s benchmarks, drawn from aggregated data across tens of thousands of firms, list a 92 percent average collection rate and a median collection lockup of 27 days for 2026. Clio defines collection lockup as the value of unpaid invoices divided by annual revenue, times 365 (Clio Legal Trends benchmarks).
- Collection rate floor. An ABA GPSolo article suggests checking that your collection rate is at least 90 percent, and taking a hard look at intake and follow-up if it falls below that in any year (ABA, 2022).
- Age and collectability. A 2014 article by practice consultant Edward Poll, archived by the Canadian Bar Association, cites one study in which a bill more than 60 days past due was still collected about 89 percent of the time. That dropped to 67 percent after six months and 45 percent after a year (CBA PracticeLink).
- When to start. A State Bar of Michigan practice guide notes that the weakest link in many firms’ collections is not following up once an account is about 45 days late (State Bar of Michigan).
The most useful benchmark is your own trend. If the share of AR over 60 days grows three months in a row, something in the process has slipped, even if the total looks fine.
Four numbers to track every month
- Collection rate = cash collected in the period divided by the amount billed in the period.
- Share over 60 days = AR more than 60 days past due divided by total AR.
- Average days to collect = the average number of days from invoice date to payment.
- Collection lockup = (unpaid invoices ÷ annual revenue) × 365, the measure Clio uses.
When to follow up on an unpaid invoice
A law firm should follow up on an unpaid invoice the day after it’s due, then again about a week later, then by phone around day 10 to 14. Early contact is gentler, because the first message can be a simple heads-up. The ABA article above suggests a reminder once a payment is a week late and a call at two weeks. A slightly tighter version works well for most firms:
| Timing | Touch | Tone |
|---|---|---|
| Invoice issued | Invoice email with payment link | Routine |
| Day 1 past due | Reminder email with invoice attached | Warm heads-up |
| About day 7 | Second email | Friendly, invites questions |
| Days 10 to 14 | Phone call | Helpful: “Is anything in the way?” |
| Day 30 | Email plus call, payment plan offered | Clear and direct |
| Days 30 to 90 | Steady mix of email, phone and text | Patient, documented |
| Day 90 | Account goes to the billing attorney | Firm decision |
For sample wording at each early step, see our guide on how to collect unpaid legal fees.
Template: Reminder at 30 days past due
Subject: Your [Month] statement, now 30 days past due Hi [First name], We wanted to reach out about your [Month] statement for [amount], which was due on [due date]. We haven’t seen a payment yet and wanted to check in. If paying the full amount right now is hard, we can split it into [number] monthly payments of [amount]. Just reply with a date that works for the first one. You can pay here: [payment link] If you have a question about the charges, reply and we’ll get you an answer from [Attorney]. Thank you, Billing, [Firm name]
A 30-minute monthly AR review
A monthly AR review takes about 30 minutes: run the aging report, compare this month’s numbers with last month’s, and confirm every account over 30 days has a recent, logged contact.
- Run the aging report by client on the first business day of the month.
- Calculate the four numbers above and write them next to last month’s.
- List every client in the 31 to 60 day bucket. Each one should have had a call. If not, schedule it this week.
- List every client over 60 days. Confirm each has a logged contact in the last two weeks.
- Check for disputes that are waiting on the attorney. Those stall quietly.
- Decide on any account over 90 days. Don’t let it roll into next month without a decision.
Signs your AR process needs outside help
The clearest sign is a 31 to 60 day bucket that keeps growing while the firm is busy. These signals usually travel together:
- The 31 to 60 day bucket keeps growing even though the firm is busy.
- Reminders go out only when someone has a spare afternoon.
- Calls get skipped because nobody wants to make them.
- Billing software sends automated emails, but no person ever follows up.
That is the gap ARCounsel fills. ARCounsel is a done-for-you accounts receivable follow-up service for law firms that connects read-only to QuickBooks Online, LeanLaw and Clio. Its AR specialists follow up on past-due invoices in the firm’s name for about 90 days, then hand back anything still open with a full activity log. The firm approves every template and keeps every payment. If your firm bills in Clio, our guide to following up on overdue Clio invoices covers the setup inside Clio. You can also see ARCounsel’s published pricing.
Frequently asked questions
What’s a good collection rate for a law firm?
Clio’s 2026 Legal Trends benchmarks put the average law firm collection rate at 92 percent, and an ABA GPSolo article suggests staying at or above 90 percent. The more useful test is your own trend, and whether the share of AR over 60 days is shrinking or growing.
How often should a law firm check its accounts receivable?
Run the aging report at least monthly, and check the 1 to 30 day bucket weekly. Weekly attention on new past-due invoices is what keeps them from reaching 60 and 90 days.
What is the difference between AR and WIP?
Work in progress (WIP) is time and expenses recorded but not yet billed. Accounts receivable is what has been billed and not yet paid. Both tie up cash, but only AR can be followed up with the client.
A note on ethics rules. Rules on fee collection vary by state, including when a firm may charge interest on a late bill or refer an account to a collection agency. Check your state’s rules of professional conduct and ethics opinions, or ask your ethics counsel, before setting a collection policy. This article is general information, not legal advice.
Hand off the follow-up
ARCounsel’s AR specialists follow up on past-due invoices in your firm’s name, on templates you approve. Flat monthly fee, and clients pay you directly.
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