Standard rate

The rate card value at which time is recorded before any discount, fixed fee or write-off.

DefinitionThe rate card value at which time is recorded before any discount, fixed fee or write-off.

Standard rate is the list price of an hour of a fee earner's time, and the value at which recorded time is first measured. Realization is computed against it, which means every change to the card changes realization with no change in what clients pay. Comparisons across periods are made at one fixed card, or on the realized rate in currency.

How it is used

The rate card value at which time is first recorded. Realization is measured against it, so comparisons over time use one fixed card.

Example

An associate's standard rate rose from $500 to $550. Clients on agreed rates paid the same, so realization fell by the amount of the rise.

Where it goes wrong

A rate card change read as partners giving more away.

Articles that use this term

Finance metrics and formulas · Manufacturing

Overall line efficiency: formula and production example

Measure good production against the approved line standard and planned production time. Work through two shifts, reconcile line losses and distinguish the result from labor line balancing.

Oct 25, 20266 min read Finance metrics and formulas

Self storage financial model: occupancy, revenue and cash

Build a self-storage operating workbook from occupied units, rental rates and site costs. Compare actuals with plan and reconcile rental revenue, collections and closing cash.

Oct 23, 20265 min read Finance metrics and formulas · Manufacturing

Labor efficiency variance: formula and example

Labor efficiency variance values extra or saved production hours at the standard labor rate. Learn the formula, build standard hours from actual output and reconcile a worked manufacturing example to total labor cost.

Sep 19, 20266 min read Finance metrics and formulas · Professional services

Professional services financial analysis: engagement to firm

Connect engagement revenue, utilization, realization and delivery costs to the firm's financial result. Use a worked practice review and spreadsheet formulas to reconcile profitability and identify the working capital questions behind it.

Sep 4, 20265 min read Wallet share and penetration · Professional services

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.

Aug 27, 20263 min read Board and management reporting · Professional services

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.

Aug 25, 20263 min read