Realisation

Billed fees over the value of time worked at standard rates, per client or per partner. Write-downs reduce it before billing; write-offs after. Drift is realisation that fell without a rate agreement changing.

DefinitionBilled fees over the value of time worked at standard rates, per client or per partner. Write-downs reduce it before billing; write-offs after. Drift is realisation that fell without a rate agreement changing.

Against the agreement

A client on an agreed 30 percent discount at 70 percent realisation is on plan. One with an agreed 8 percent at 74 percent is leaking.

Per client, not per matter

Forty small write-downs on one client, each too small to notice, are one pricing relationship that drifted.

How it is computed

Fees billed divided by the value of time worked at standard rates, per client, matter or partner, at a fixed rate card when compared over time.

Example

A client's matters recorded $520,000 at standard and were billed at $405,000: 78 percent, down from 91 three years ago.

Where it goes wrong

Read at firm level, where one client's slide is lost in the average.

Articles that use this term

Board and management reporting

Discount approval thresholds from price realisation data, not from a round number

How a commercial team sets the discount level at which a rep needs approval from what its own invoice lines show: the distribution of discounts given, the discount at which win rate stops improving, the reps and product lines where discounts cluster just under the current threshold, the revenue given away between the effective and the agreed discount, and the threshold per product line that follows, with the approval volume it will generate.

16 Sept 20263 min read How-to guides

How often should sales data be refreshed? A cadence per measure, not one for the tool

Why 'real-time' is the wrong answer to how often sales data should be refreshed, the cadence each measure actually needs, weekly for coverage and pipeline, monthly for share of wallet and concentration, quarterly for norms and segments, annually for definitions, what a refresh more frequent than the measure's cadence does to the reader, and the export schedule that follows.

16 Sept 20262 min read Board and management reporting · Law firms

Leverage delivered against leverage priced: matter profitability by fee-earner mix

How a law firm measures whether matters are staffed as they were priced, from time entries and the engagement terms: the fee-earner mix a matter was priced on, the mix actually recorded, the cost of the difference at cost rates, the matters and clients where partners do associate work, the practices where the mix drifts most, and the identity that matter costs sum to the practice's cost base.

16 Sept 20262 min read Board and management reporting · Law firms

Lock-up by client: the cash a matter ties up, and the clients that tie up most

How a law firm measures lock-up per client from time entries, bills and receipts: work in progress days and debtor days, the total days between work done and cash received, the norm per practice from the firm's own book, the clients whose lock-up is well above it, the partners whose books carry the most, and the two levers, billing cadence and collection, that the split points to.

16 Sept 20262 min read Board and management reporting

Price realisation by customer: invoiced price against list, and the discounts nobody approved

How a manufacturer or distributor measures the discount each customer actually receives from invoice lines against the list price at the time: realisation per customer per product line, the approved discount from the price agreement, the unapproved discount that is the difference, the customers whose effective price has drifted down through overrides, and the identity that ties realisation to the ledger.

16 Sept 20262 min read Data quality and reconciliation

Product taxonomy for analytics: lines, families and SKUs, and which level each measure uses

Why a product list with four hundred SKUs produces whitespace everywhere and a concentration figure that means nothing, the three levels a product taxonomy needs, line, family and SKU, which measure is computed at which level, the rule that a SKU belongs to exactly one family and a family to exactly one line, the dated mapping that survives a range change, and the identity that revenue sums identically at every product level.

16 Sept 20263 min read