Industries · Professional services
Professional services: consulting, audit, law and IT services
How consulting, audit, law and IT services firms make money from their people's time; the pyramid, utilization, billing rates, realization and pricing models; how AI is changing the model; and why the economics of a consulting firm shape the way a case interview is run.
Key takeaways
- A professional services firm sells the time and judgment of its people.
- Revenue from one person equals available hours times utilization times billing rate times realization.
- Professional services cases usually ask how a firm can grow, why its profit is falling, whether to enter a new market or service, or how to price.
- Explain what strategy, operations and technology consultants, the Big Four, law firms and IT services firms sell, and how each charges
- Calculate utilization, realization, a blended billing rate and the yearly contribution of one consultant
- Compare time and materials, fixed fee and value based pricing, and say who carries the risk in each
- Describe how AI, Indian IT services and Gulf demand are changing the industry from 2024 to 2026
- Link the way consulting firms earn money to the way case interviews are run, and crack typical professional services cases
Lessons
How professional services firms work, and who does what
Consulting, audit, law and IT services; the pyramid of partners, managers and juniors; and the numbers every firm watches.
The economics of a consulting firm: hours, rates, realization and pricing
How one consultant earns money for the firm, why a few points of utilization matter so much, how pricing models share risk, and why this shapes how cases are run.
Professional services players, trends 2024 to 2026, and how to crack the cases
Who the players are by region, their size, what changed from 2024 to 2026 (AI, Indian IT services, the Gulf), typical prompts, traps and drills.
Worked cases in this module
Look it up
Key terms