Here is how you can fix this error message.
The reason for this is because the "lawyer" participant type on this matter is not a system user of your Actionstep system. Therefore this person should be able to "bill" anything, hence the error message.
To fix this issue head over to the Matter (in this instance its matter 2) Next to the matter name is an "i" icon. Select the "i" icon and select edit.
Verify the assigned to make sure the user is a system user meaning that that user has a login into Actionstep. You can verify that if you are an admin and go to:
Admin > Users & Permissions
Verify the user in the matter has a login and if that user does not have a login then either add that user into Actionstep or if the person is longer at the firm then change the assigned to, to an active user.