FINANCE LEADERS
July 2026: Matter management
Visible link: fee earners in the driving seat, but does finance have the right view of costs creeping up?
Fifth of finance leaders say 10% could be written off average matter as costs change
This Briefing Finance Leaders research series has already found most couldn’t say how much might be written off an average matter owing to the onboarding process — almost a third (31%) don’t believe they even have the data to begin a calculation. But there’s recognition that a process that must be clearly robust to meet risk management requirements could be improved — potentially automating more elements, including collection of client details, and managing all the data involved more consistently. And, as so often, it’s where people meet the planned process, supported by technology, that there are some immediate opportunities for change. Is the formal documentation complete? Has billable time assigned to any temporary matters been correctly reallocated as the work officially starts? And while both client and fee earner alike will have good reason to want to progress business quickly, is the correspondence and communication to enable this optimal? Challenges are compounded where the points of connection continue to be manual. As it’s a law firm, of course, none of this is necessarily consistent across the firm’s efforts.
The majority of finance leaders in this round of research say that there is usually a Letter of Engagement (LoE) for work in place before it begins — two-fifths say at least 70% of the time, two-fifths again that it is more like 90%. So, why do almost three-quarters (74%) believe anywhere from 3-10% is likely be written off a matter somewhere through uncaptured costs? Unlike in the onboarding journey, only a fifth feel that they couldn’t estimate revenue leakage at this point in the cycle (just one in 10 this time owing to an absence of data).
PARTNER PERSPECTIVE
The simple process that isn’t so simple
Paul Foster, head of product, sa.global
Changes can happen, plans flex and new issues may arise. The problem comes when these scope changes aren’t formally documented. The key to improving this situation should be centred around structural and behaviour change, alongside deployment of the correct technology platform, using proactive agentic workflows with an incentive to move in this direction.
Seeing is believing
The answer is evidently management of ‘scope creep’ once a matter is active — changes in direction or scale that might have been agreed verbally as best-laid plans rub up against the business reality, but which don’t then make it into the documentation and so go unaccounted. This is the factor finance leaders are most likely to say they see as a cause of drift (58%), and it is followed by generally poor client communication as matters progress (53%). More than a third (37%) also specifically see fee earners who are operating outside of agreed parameters.
Ian Rands, pricing director at Freeths, says: “You can get the price right at the outset, but if you don’t then manage the process to that price the margin starts to erode. Matter management is a real challenge — partners need to be comfortable and effective in conversations with clients about the evolving scope to avoid unplanned write-offs.”
He adds that changes can also flow from an internal factor: “You can get variance where there’s an unanticipated resourcing change, for example — somebody on the team takes more hours, not all of which can ultimately be billed.”
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As indicated above, only a minority (16%) believe the LoE is not sufficiently tailored when it’s first produced — and similarly few find fault with either official ownership of the record-keeping or the technology linking letter and live matter. In short, the failure to account for scope changes is more likely to be viewed as a challenge with ensuring that individuals complete required steps consistently than indicative of a truly missing part of the process expected.
One chief financial officer, who preferred not to be named, says: “A lack of consistency and discipline around overruns in a firm will result in unnecessary profit leakage. Scope creep should be tracked — which assumes the client team have been briefed on scope — and discussed promptly with clients. Such continuous, and often informal, updating makes it easier for the partner to recover these overruns from clients. It is easier for a client to approve small amounts incrementally, which allows them to manage their own stakeholder expectations, than trying to provide or secure approval for a significant overrun presented when the matter is complete.”
But is the finance department at least able to see such diversions from what’s expected in order to factor them into its own work? It is far from being a given. Although most leaders can say there is consistent visibility of at least one of either the LoE (26%) or agreed budget limits (21%), under a fifth (16%) say they have visibility of both. Over a third (37%) suggest that these matter records are incomplete more often than not, with 16% apparently receiving no information at all.
It’s eye-opening, but nonetheless follows therefore, that the majority of leaders are less than confident there is sufficient visibility of the firm’s matter management in the round from a financial risk perspective. A third say the visibility level varies, perhaps dependent on following manual process, and over a quarter (28%) that they must wait for invoice review to assess the situation.
Rands says: “Add the increasing use of technology in delivery, with client demand for efficiency and cost certainty, and this becomes a clear business case for attention and perhaps acceleration.”
He suggests that some law firms will have invested more than others in systems and “the power of data”, clearly opening up something of a competitive advantage if it translates into less lost revenue. This could include pulling more value from existing technology — both effective data capture and deeper analysis. “It supports the business with more informed decisions about strategy, client base, work types, and indeed the reasons for write-offs,” he says.
“We also stress the importance of collecting that information in the first place so it can be fed back in more useful ways — that people respect the process with data and forms rather than following the path of least resistance.”
17%
of finance leaders express confidence that visibility/control of matter management is 'reasonable' at best
Alert to the situation?
Half of firms have a form of system of automatic alerts to act as a matter approaches a fee threshold — but in more than half of these cases they’re only directed to the fee earner or their supervisor. Nor can leaders say that the finance team receives any regular reports. At the other half of firms represented fee earners control what happens entirely independently, if there is a process at all. Indeed, even if the client receives word in some auditable fashion, not a single leader can say that their finance team is consistently informed following a defined process when the cost of a matter changes.
The aforementioned chief financial officer interviewed says: “Process changes tend to require structure changes and bring complexity to matter codes, or additional data inputs from more senior resources — both of which do not fare well in law firms.
“What would go a long way quite quickly from the perspective of behavioural change and a willingness to invest time — not necessarily a partner’s — to improve discipline in this area would be a greater understanding of the strong correlation between faster billing and improved overrun recovery with increased cash earnings for partners.”
PARTNER PERSPECTIVE
The simple process that isn’t so simple
Paul Foster, head of product, sa.global
Every client matter roughly follows the same structure — you have a client with a problem, you provide a quotation based on the explanation of the issue, and both parties agree a price. Then you open a matter, record time and expenses, raise an invoice and finally, you collect the money. Sounds simple — so why do only 17% of finance leaders in the legal space express confidence that matter management is ‘reasonable’ at best?
While it is encouraging that 84% of firms confirmed a letter of engagement is present at the start of the matter, this is only a starting point, not a control. Having the document is the easy part: the question is what happens to the terms inside it once a matter is live and moving fast.
Where the terms actually drift
The usual suspect is ‘scope creep’ — the point when an active matter starts drifting and complicates what should be a simple process.
Changes can happen, plans flex and new issues may arise. The problem comes when these scope changes aren’t formally documented — an issue flagged by 58% of finance leaders — or if there’s poor or a complete lack of client communication as matters progress (cited by 53% of leaders).
The instinctive response to fix this issue is to throw money at it — step up the technology investment, and deploy a couple of agents to flag issues as they arise. It is a technology and data problem, but it’s also a behaviour and firm-wide policy issue. And, as this research makes clear, fee earners are firmly in the driving seat. Isolated, reactive technology on its own won’t fix that.
The key to improving this situation should be centred around structural and behaviour change, alongside deployment of the correct technology platform, using proactive agentic workflows with an incentive to move in this direction.
Changing the control dynamic
I have always said: if you want to eradicate dissent towards referees in football, send off every player who shows it. It would be chaos for six weeks, but eventually the behaviour and control dynamic would change for the good.
The chaotic period of evolving the structure and behaviour of a legal firm would take considerably longer than six weeks, but the control dynamic would change to the benefit of the firm. The reward to fee earners? Less of the up to 10% in fees written off, and improved cashflow all round.