The 93-Day Lockup Crisis: How Nearly Three Months of Trapped Revenue Is Strangling Law Firm Cash Flow
CollBox Team
How the 2025 Legal Trends Report reveals a troubling reality for law firms—and what leading practices are doing to break free
The 2025 Legal Trends Report has confirmed what many law firm leaders already suspected: the average law firm is carrying approximately 93 days worth of work that is either unbilled or unpaid at any given time. This staggering lockup statistic represents nearly three months of trapped revenue—work that has been completed, value that has been delivered, but cash that remains frustratingly out of reach.
At CollBox, where we’ve recovered over $100 million for law firms struggling with accounts receivable challenges, this 93-day lockup figure isn’t just an abstract benchmark. It’s a daily reality that impacts every aspect of firm operations, from strategic planning to staff morale. More importantly, it represents a solvable problem that separates thriving practices from those barely keeping their heads above water.
Check out this short video explaining what we’ve learned
Understanding the Lockup Reality: More Than Just Delayed Payments
The lockup metric consists of three interconnected components that together paint a comprehensive picture of a law firm’s revenue cycle health:
Realization lockup measures the amount of revenue that remains unbilled at any given time—also known as “work-in-progress lockup.” This represents completed work that hasn’t yet been converted into client invoices. According to the Legal Trends Report, this metric has been trending downward, suggesting that firms are becoming more efficient at billing their work to clients.
Collection lockup tracks revenue that has been billed but remains uncollected—the “debtor lockup” that keeps financial managers awake at night. The troubling news from the report is that collection lockup has been creeping upward, meaning that while firms are getting better at generating invoices, clients are taking longer to pay them.
Total lockup combines both metrics to reveal the complete picture. At 93 days, the average firm is operating with nearly a quarter of its annual revenue frozen in various stages of the billing cycle. This isn’t just an accounting curiosity—it’s a cash flow crisis that impacts every strategic decision a firm makes.
The Hidden Costs of Extended Lockup
The 93-day lockup figure might seem like just another KPI to track, but its ripple effects extend throughout every corner of law firm operations. Understanding these cascading consequences is essential to appreciating why lockup management deserves immediate strategic attention.
Cash Flow Volatility Prevents Strategic Investment
When nearly three months of revenue is perpetually tied up in unbilled work and uncollected receivables, law firms face cash flow volatility that makes planning nearly impossible. Can the firm afford to hire that talented associate? Is now the right time to invest in new technology? Should the firm pursue an aggressive marketing campaign?
These questions become exponentially more difficult to answer when cash flow is unpredictable. Firms with extended lockup periods can’t confidently make the strategic investments that drive growth because they can’t reliably predict when revenue will actually arrive. This creates a self-perpetuating cycle: firms with poor lockup metrics miss growth opportunities, which puts them further behind competitors who have optimized their revenue cycles.
Our data at CollBox shows that firms which reduce their lockup period by even 20-30 days experience dramatically improved cash flow predictability. This predictability enables confident strategic planning and investment in the growth initiatives that compound over time.
The Opportunity Cost of Trapped Capital
Perhaps the most insidious aspect of extended lockup is the opportunity cost. That 93 days of trapped revenue represents capital that could be deployed for strategic purposes. Consider a firm with $2 million in annual revenue—93 days of lockup represents approximately $510,000 in frozen capital at any given time.
What could a firm do with an additional $510,000 in available cash? Hire experienced attorneys to expand practice areas. Invest in AI and practice management technology. Launch marketing initiatives to attract higher-value clients. Build financial reserves for economic downturns. The opportunities are endless—but only for firms that can free their capital from extended lockup periods.
Staff Morale and Administrative Burden
The Legal Trends Report’s lockup statistics also hint at a human cost that doesn’t appear in financial statements. Extended lockup periods require constant administrative attention: following up on unbilled work, chasing overdue invoices, managing client payment arrangements, and dealing with the emotional exhaustion of perpetual collection efforts.
Partners and staff who should be focused on client service and business development find themselves mired in administrative collections work. This misallocation of high-value resources doesn’t just impact current productivity—it affects recruitment, retention, and overall firm culture. Talented professionals don’t join law firms to chase down past-due invoices.
The Collection Lockup Trend: A Warning Sign
The most concerning insight from the 2025 Legal Trends Report isn’t the 93-day total lockup figure itself—it’s the trend within that number. While realization lockup has been declining (firms are getting better at billing their work promptly), collection lockup has been increasing. This divergence reveals a troubling dynamic: firms are creating more invoices, but clients are taking longer to pay them.
This trend suggests several potential factors at play. Economic pressures may be causing clients to delay payments as they manage their own cash flow challenges. The proliferation of invoices from improved billing practices may be overwhelming clients who receive bills more frequently. Or firms may be so focused on getting bills out the door that they’re neglecting the follow-through required to ensure prompt payment.
Whatever the underlying causes, the increasing collection lockup trend represents a clear warning sign. Firms that focus exclusively on improving their realization metrics (getting work billed faster) without addressing collection efficiency (getting invoiced amounts paid promptly) are only solving half the problem. In fact, they may be exacerbating it by flooding clients with invoices without adequate follow-up processes to ensure timely payment.
Breaking Free: How Leading Firms Are Reducing Lockup
The firms that are successfully reducing their lockup periods share several common characteristics that distinguish them from practices struggling with extended revenue cycles.
Systematic Billing Processes
Leading firms have eliminated ad hoc billing in favor of systematic, predictable invoicing schedules. They bill at regular intervals that clients expect and understand. They’ve invested in time-tracking disciplines that ensure billable work is captured and billed promptly. They’ve eliminated the “bill whenever we get around to it” mentality that extends realization lockup unnecessarily.
The impact is measurable. According to the Legal Trends Report’s broader KPI analysis, firms have improved their realization rates to 88%, meaning they’re invoicing nearly nine-tenths of their billable work to clients. This improvement directly contributes to reduced realization lockup periods.
Professional Collection Management
The increasing collection lockup trend revealed in the report underscores the critical importance of professional collection processes. Leading firms recognize that generating invoices is only half the battle—ensuring prompt payment requires systematic follow-up, professional communication, and strategic persistence.
At CollBox, we’ve seen firms reduce their collection lockup by 35-50% through the implementation of professional collection management processes. These processes don’t involve aggressive collection tactics that strain client relationships. Instead, they employ respectful, systematic communication that maintains positive relationships while ensuring prompt payment.
The key is consistency and professionalism. Automated payment reminders that go out at strategic intervals. Personalized follow-up that addresses client concerns before they become payment obstacles. Flexible payment arrangements that keep revenue flowing even when clients face temporary cash flow challenges.
Technology-Enabled Visibility
Firms that successfully manage lockup leverage technology that provides real-time visibility into their revenue cycle. They can see at a glance which matters have unbilled work accumulating. They can identify which clients consistently pay promptly and which require additional attention. They can track key metrics that reveal whether their lockup is improving or deteriorating.
This visibility enables proactive management rather than reactive crisis response. Instead of discovering at month-end that lockup has ballooned, firms with integrated technology systems can address emerging issues immediately. They can intervene when unbilled work starts accumulating on a matter. They can follow up with clients whose payment patterns are changing. They can optimize their processes based on actual performance data rather than gut instinct.
The Strategic Imperative: Why Lockup Management Can’t Wait
The 93-day lockup revealed in the 2025 Legal Trends Report isn’t just an industry benchmark—it’s a competitive dividing line. Firms above this average face chronic cash flow challenges that constrain their strategic options. Firms significantly below it enjoy financial flexibility that enables confident growth investments.
The gap between these two groups is widening. Firms that optimize their lockup through systematic billing, professional collection management, and integrated technology are building sustainable competitive advantages. They’re making strategic investments that compound over time. They’re attracting better talent with more stable work environments. They’re delivering better client experiences because their staff isn’t distracted by constant collections crises.
Meanwhile, firms that view lockup management as a back-office concern rather than a strategic imperative are falling further behind. Every month they delay addressing their revenue cycle inefficiencies represents lost opportunities that competitors are capturing.
The Path Forward: Turning Insight Into Action
The 2025 Legal Trends Report provides invaluable benchmarks that help firms understand where they stand. But benchmarks alone don’t improve performance. The question for every law firm leader is: what will you do with this knowledge?
For firms serious about reducing lockup and improving cash flow, the path forward requires three commitments:
First, recognize lockup management as a strategic priority rather than an administrative task. The 93-day industry average isn’t inevitable—it’s a challenge to overcome. Firms that view lockup reduction as a competitive differentiator will approach the problem with the urgency and resources it deserves.
Second, invest in the systems and processes that enable efficient revenue cycle management. This includes practice management technology that provides real-time lockup visibility, systematic billing processes that reduce realization delays, and professional collection management that minimizes collection lockup. These investments pay for themselves many times over through improved cash flow and reduced administrative burden.
Third, measure progress relentlessly and adjust accordingly. Lockup management isn’t a one-time project—it’s an ongoing commitment to operational excellence. Firms that regularly track their realization and collection lockup, benchmark against industry standards, and continuously refine their processes will achieve sustained improvements that compound over time.
Conclusion: The Opportunity in the Crisis
The 93-day lockup statistic from the 2025 Legal Trends Report represents both a crisis and an opportunity. It’s a crisis because it reveals just how much revenue the average law firm has trapped in its billing cycle at any given time—nearly three months of frozen capital that could be deployed strategically.
But it’s also an opportunity because it shows just how much potential exists for improvement. Firms that reduce their lockup from 93 days to 60 days effectively inject 33 days of additional cash flow into their operations. For most firms, this represents hundreds of thousands of dollars in freed capital—money that can fund growth, provide financial stability, and enable confident strategic planning.
At CollBox, we’ve helped hundreds of firms break free from the lockup crisis through professional collection management that reduces collection delays while maintaining positive client relationships. The results speak for themselves: over $100 million recovered, dramatically improved cash flow predictability, and firms that can finally focus on growth rather than just survival.
The 2025 Legal Trends Report has provided the data. The question now is: will your firm be among those that use this insight to transform their revenue cycle and unlock their full potential? The competitive landscape won’t wait for firms to figure this out on their own timeline. The firms that act now will be the ones that thrive in the years ahead.
