Services not chargeable to client (spread over all clients as

overhead)
General management & administration
Marketing & promotion
Staff training
Recruitment
Chargeable time is calculated as:
Total available time (less leave, sickness, publicH) Less
(training, marketing, research, meetings) = chargeable time
Annual utilization rate: Chargeable time/Total time (70-80%)
2nd Differential Ratio: Chargeable time/Days available (8090%) can be used for differential rates for consultants (Lower
as we move to senior consultants to principals)
Costing
Every fee earning day has to earn a portion of the total
budgeted income
Total income (budgeted forecast)/Fee-earning days = ~80%
(average daily fee rate)
Cannot charge same daily rate for all clients as clients could
opt for senior & principals for all their projects
Less experience consultants doing projects would turn costly
too
Differential fee rates applied according to available time ratio
(chargeable days)
Multiple ratio (fee salary factor): Total fees earnt/wages =
factor (2.5-4); goes up with overhead
Types of Fees
Per unit of time
Flat lump-sum
Fee plus royalty (where new IP is created)
Fees contingent on results (contingency fees): risk involved
Equity participation
Percentage fee (type of contingency fee): transaction related
Retainer
Table 1: Lehman Formula; Can be applied in bands

$1--$1M
$1M--$2M
$2M--$3M
$3M--$4M
$4N--UP

5%
4%
3%
2%
1%

Assignment Management
Top-down (Available weeks & activity allocation)
Bottom-up (Activity based time requirement)

Financial & Operational Control

Operating workplan & operating budget (prepared annually,
represented monthly & quarterly)
Volumes of consulting services sold, work portfolio,
recruitment & training, volume of marketing activities....
Projected income, expenses, reveals fixed vs. variable costs...
Improving Profitability = Appropriate use of staff as per
competence, Higher utilization rates, Efficient execution of
assignments, Save on overhead items, Prompt fee collection,
Cross-sell, Sell more profitable work, Cut unprofitable services
Expenses billed to clients are not part of income
Profit: Fees earnt less expenses paid (gross income) = for use
as profit share to owners, security reserves, working capital,
capital expenses.

Controls
Forward workload (backlog) 1.5-3 months
Client visits to assignments negotiated (strike rate for
marketing)
Actual vs budgeted utilization of total time
Actual vs planned fee earning days
Actual vs budgeted fee rates
Fees earnt vs budgeted fees (monthly & YTD)
Fees earnt vs expenses (monthly & YTD)
Expenses incurred vs budgeted (by lines & total)
Monthly billing vs fees earnt
No. of months of outstanding fees

Performance Indicators (Firm performance)

growth rate
profit vs total income
profit per consultant
volume sold per consultant involved in marketing
staff turnover
utilisation rates & time allocation to various services
expense & cost structure
marketing & bd costs
fee rates
performance per team/department/practice area

Fee structures (flat fee, hourly, contingency, pro-bono)

Collection realisation rates (60-99%)
A/R: Accounts Receivable as per days due; how much written
off

Behavioural Q&A
What do you think takes to be successful in this role:
Collaborate & an open-mind prepared to work collaborative as
part of one team; in addition to left & right brain analytical
insight, drive to exceed KPI targets
How do you determine or evaluate success: Having key
milestones on a timeline with progressive quantitative
indicators that visualise the realisation of goals
Success in previous role/Why hire you/Trackrecord/Proud achievement: Successfully fulfilling multiples

roles while working in the capacity of an analyst in a microconsultancy environment

Root cause analysis is an approach for identifying the underlying
causes of why an incident occurred so that the most effective
solutions can be identified and implemented. It's typically used
when something goes badly, but can also be used when something
goes well. Within an organization, problem solving, incident
investigation and root cause analysis are all fundamentally
connected by three basic questions: What's the problem? Why did it
happen? and What will be done to prevent it?
3 Stages:
1. Define issue & its impact to overall goals
2. Analyse causes in a visual map
3. Prevent or mitigate negative impacts to goals
Root cause analysis is an approach for identifying the underlying
causes of why an incident occurred so that the most effective
solutions can be identified and implemented. It's typically used
when something goes badly, but can also be used when something
goes well. Within an organization, problem solving, incident
investigation and root cause analysis are all fundamentally
connected by three basic questions: What's the problem? Why did it
happen? and What will be done to prevent it?