SOURCE: Kennedy Information, Inc.

March 12, 2007 15:14 ET

Profit Pendulum Returns to Favor Consulting Firms

Consulting Fee Levels to Increase by More Than 5% in 2007

PETERBOROUGH, NH -- (MARKET WIRE) -- March 12, 2007 --The rebound in consulting firm profitability that Kennedy Information projected has been fully realized in 2007, according to "Fees, Utilization and Key Metrics in Consulting 2007," the firm's annual study of profitability in the profession. Focusing on the fees charged by consulting firms for their services and consultant utilization rates, the report finds both key measures of firm profitability on the rise.

While the implications for consulting clients may be less than favorable, these rate increases are welcome news to a profession that saw minor increases in effective rates, rampant fee discounting, and lackluster profitability growth over the last several years.

The study forecasts that "realized" consulting fees (the rates that are actually charged to clients) will grow to 5.2% in 2007. Utilization rates (the percentage of time billed to clients as a proportion of total billable time) will see comparable increases over the course of the year as well.

"As more work and larger engagement sizes begin to stretch already scarce talent resources, even higher fee levels or 'sold out' signs may begin to appear at some consulting firms," says Kennedy's Director of Research, Derek Smith. "Clients are clearly placing greater emphasis on quality rather than on lower fees," he added.

"Fees, Utilization and Key Metrics in Consulting 2007," provides industry wide benchmarking data on such key metrics as:

--  Projected book and realized rates
--  Utilization rates
--  Profitability metrics
--  Distribution of consulting engagements by size, and more
    
In addition, the report segments data by consulting service or practice line specialty including, Strategy, Operations Management (OM), Information Technology (IT), Human Resources (HR), and Business Advisory Services (BAS).

"Fees, Utilization and Key Metrics in Consulting 2007" is a proprietary, 173-page report, supported by 168 tables and charts. For a complimentary Executive Summary, call 800-531-0007, e-mail research@kennedyinfo.com or visit www.ConsultingCentral.com/fees.

About Kennedy Information

Kennedy Information, Inc., the leading research firm on management consulting since 1970. The company annually publishes "The Global Consulting Marketplace, Benchmarks in Management Consulting," and other research reports; the monthly newsletters Consultants News and Management Consultant International as well as Consulting Magazine. Kennedy also produces annual conferences for thought leaders in consulting and powers the Web portal, http://www.ConsultingCentral.com.

Contact Information

  • CONTACT:
    Dan Daly
    Kennedy Information, Inc
    +1.603.924.0900 ext. 628
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