New to consulting, but it seems like utilization targets really only function to incentivize folks to avoid the bench. In terms of billing actuals, isn’t everybody better off if you just bill 40/45/whatever your target is? Better forecasting and budgeting (good for project lead), client paid for hours so we charge for them (good for partner), peace of mind for hitting utilization target (good for consultant who doesn’t have to worry as much about hitting target). Am I missing something here?

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Federal law lmao. It’s a violation and considered contract fraud to not bill actuals, so a firm cannot legally sit there and tell you to do that because they’d get their asses handed to them in lawsuits, among other consequences.

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Only if you’re non-exempt. Most consultants are exempt. And even if you’re non-exempt, there’s no “contract fraud” (which isn’t even a term). I think you were trying to refer to breach of contract. There’s certainly no obligation for your firm to bill any actual hours to a client. And asking you to not record all your hours wouldn’t likely violate your employment agreement (though it could if that was in there), but it would violate labor laws if you’re non-exempt.

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Utilisation metrics serve as a quantitative point of comparison of productivity vs peer group.

Bill what you work, work what you bill: it’s the most accurate and honest all around.

You missed managing the “budget”. If the partner sells work at 45 hours per person but it actually takes 60 hours, the realization rate (how much you work vs how much you bill) could be wrong. Not all projects are created equal.

Also depends on the firm. Everything people on one project do at MBB is by the day, not the hour (and often rounded up, so a BCG project is billed for a week of a consultant’s time if the consultant works at least three days that week on a project). Clients are also effectively billed by the day, though almost all cases are either fixed fee or fixed fee plus a success fee. Some government or bankruptcy projects can be hourly or time & materials.

Avoiding the bench is key. If you’re on the bench, you aren’t making money for the company. You should never bill to a target … incents the wrong behavior. Consultant firms have to track bench time to ensure their overall costs are where they should be. If you aren’t worried about being utilized, that worries me…

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