Realized rate

Fees billed or collected divided by hours worked: the rate per hour the firm actually received, independent of the rate card.

DefinitionFees billed or collected divided by hours worked: the rate per hour the firm actually received, independent of the rate card.

Realized rate is currency per hour: billed or collected fees over hours recorded. It survives a rate card change, which realization does not, so it is the figure to compare across years when the standard rates have moved. A rate rise that changes the card and not the realized rate was not realized on anyone.

How it is computed

Fees billed, or collected, divided by hours worked.

Example

Fees of $8.8 million on 20,000 hours is $440 an hour. After a 10 percent rise in the rate card it was $445: the rise reached almost nobody.

Where it goes wrong

Realization used across a rate card change, which shows a fall that did not happen.

Articles that use this term

Territory, capacity and quota planning · Consulting and advisory

Sold work against the bench: matching pipeline to the people who will deliver it

How a consulting or advisory firm reconciles its sales pipeline to delivery capacity by practice and by month: sold and weighted-pipeline hours against available hours from the roster, the months where sold work exceeds the bench and the months where the bench exceeds sold work, and why the two failures need opposite responses from the same report.

Sep 16, 20262 min read Board and management reporting · Consulting and advisory

Utilization and realization on five consultants: the whole arithmetic on one page

The complete utilization and realization calculation on five consultants, small enough to check by hand: available and chargeable hours from the roster and time entries, utilization, fees billed on each consultant's hours from bills allocated by engagement, chargeable hours at standard rate, realization, the two fixed-fee engagements that have overrun and the share of each consultant's hours on them, the four quadrants, and the identity that hours and fees sum to the firm's, so a reader can reproduce every figure and then run it on their own practice management exports.

Sep 17, 20263 min read Wallet share and penetration · Consulting and advisory

What is a good realization rate? The answer depends on three things you can measure

The honest answer to what realization rate a law, accounting or consulting firm should have: the 85 to 95 percent figures quoted depend on which realization is meant, billing realization against recorded time or collection realization against billed, on the rate card the time was valued at, and on the client and matter mix. This page gives the ranges by firm type, the three measurable things that set the right figure for one firm, and the table to compute before anyone quotes a percentage.

Sep 17, 20263 min read