Professional Services Utilization & Realization
Utilization, realization, and profit per person for agencies, law, and accounting firms, plus the dollar value of closing each gap.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Billable staff (people who log client time)
- 20
- Non-billable staff (admin, sales, ops)
- 5
- Available hours per person per year
- 1,880
- Billable hours logged per person per year
- 1,250
- Average standard billing rate
- 165
- Time written down or not billed
- 12
- Share of invoices collected
- 97
- Average billable staff salary
- 85,000
- Benefits and payroll taxes
- 25
- Annual overhead (rent, software, non-billable payroll)
- 1,000,000
- Target utilization
- 75
- Target realization
- 92
Example results
At 66% utilization and 85% realization the firm earns $16K profit per person; hitting targets adds $725K a year.
- Utilization
- 66.5%
- Realization
- 85.4%
- Profit per person (all staff)
- $15,844
- Effective realized rate
- $141
- Annual fee revenue
- $3,521,100
- Annual operating profit
- $396,100
- Revenue per billable person
- $176,055
- Break-even utilization
- 59%
- Loaded cost per billable hour
- $125
What stands out
Utilization 66.5% vs. 75% target
Each billable person logs 160 fewer hours than target. At your $141 realized rate, closing the gap is worth $450,701 a year.
Realization 85.4%: you bill $141 of every $165 hour
Write-downs and uncollected invoices cost $273,900 a year vs. your 92% target. This is usually scoping and fixed-fee overruns, not rate.
Break-even utilization is 59%
Below this, at current rates and costs, the firm loses money. Each billable hour costs $125 fully loaded vs. $141 realized.
Next actions
- Set individual utilization targets by role, track them weekly, and reassign bench time; 160 more billable hours per person is worth $451K.
- Cut write-offs by moving recurring work to value-based retainers with defined deliverables.
- Review utilization, realization, and profit per person monthly by team and by client.
Model assumptions & limitations
- Utilization = billable hours logged / available hours. Realization = (1 - write-down %) x collection %.
- Revenue is modeled as billable hours x realized rate; fixed-fee and retainer revenue are treated as their equivalent hours.
- Default targets (75% utilization, 92% realization) are common rules of thumb for delivery staff; firms vary by role mix and practice. Set your own.
- Profit gains assume extra billable hours are absorbed by existing demand without new hires.