My wife is currently on an L1B and has an offer to change to a H1B visa. She is being asked to resign her current position as soon as the H1B is filed, since the client has an immediate requirement.

My questions are
1. Is the H1B filing receipt sufficient for her to start working or do we need to wait for approval?
2. If the petition is eventually rejected, would she be able to do a change of status to a H4 (based on my H1)? Will there be any potential issues later on?

3 What are the chances for rejection? The H1B is through a IT consulting firm - 2 levels removed from the final employer. Also, my wife only has a 3 year BSC Computer Science degree, though she has 5+ years of relevant experience. (She also has completed her MBA and has a provisional degree.)

Please advice.