Which consulting firms pay the best?

ITguy1957

Does anybody know which IT consulting firm pays its consultants the most? What percentage of bill rate do they pay?

MiikeB

I think looking at the percentage of bill rate is the wrong way to do things. A smaller consulting firm might charge less and pay a higher percentage but a larger firm might charge to the moon and only give you half. Also, companies that give you a higher percentage probably offer less benefits.

It also largely depends on the area and type of position. What kind of work are you looking to do and in what area?

snokerpoker

As MiikeB said, it really depends on the area you live in. I work for a small consulting firm and I can tell you I don't make half of the hourly rate we bill to our clients.

ITguy1957

Thanks for the input MiikeB. I'm getting a lot of similar responses. Hoping to find someone who's worked for a company that can stand out. Anybody in the forum who has worked for a firm and earned over half?

Vik210

MiikeB wrote: »

I think looking at the percentage of bill rate is the wrong way to do things. A smaller consulting firm might charge less and pay a higher percentage but a larger firm might charge to the moon and only give you half. Also, companies that give you a higher percentage probably offer less benefits.

This is how it works.. Big firms have a lot of over heads. I will be really surprised if they can manage to pay anywhere near half. That is just too much for them but their clients are fortune 500 companies, which makes anything near 30% a lot of money.
With small firms, you can even be partners and take share in profits.

Keener

Other aspects you have to look at are the "perks" you receive. If a company is wiling to pay you on a 1099 then they have less overhead. If you are on a W-2 you bring more overhead expenses to them. There are other taxes that a company has to pay for you that reduce the amount they can pay you. Factor in vacation, sick time, insurance, etc, and that number is reduced even further. Some also throw in a training allowance and this is probably taken out of how much they can pay you. Then they have their profits, their general employee overhead and the commission/residual they owe the recruiter/headhunter (if used).

Depending on the pay rate and perks you alot, and they can reduce your income up to %50. You just don't see a lot of that expense coming out.

Claymoore

If it's a good consulting firm and not a contracting body shop, you won't need to care about the rate at all. Perhaps the best way to explain it is to remember the work or the deliverables have a price, not the consultant. Ignoring regional price differences, I may price out an Exchange migration at $175 an hour. I may bill the travel back to the client or I may include the travel expenses in the rate depending on our service agreement with the client. Then I look to staff the project. If I have a junior-type consultant who is cheaper that can still deliver the project, I can make a higher margin. If I have to use a higher level consultant - either due to availability or complexity of the deliverable - I make less. As long as the work is done on time and on budget, the client doesn't care how much money we are making.

You may be bonused on utilization, profitability, or some other such metric and then care about your bill rate. But you have very little control over your bill rate, so a bonus based solely on profitability is a bonus you won't likely see. The VP or account executive may decide to place a senior consultant in a role at a drastically reduced rate as a way to introduce the firm and earn more business from that client down the road. You may be deliver a packaged services engagement from a vendor that has a fixed rate. One week of bench time due to a client reschedule can kill an opportunity at a profitability bonus. You may be placed on an engagement as non-billable so that you can get some experience on a new product, but that free week (or weeks) can put a serious dent in your profitability. Then there is training, travel time, bench time - none of which earns money.

I care about successful projects and happy clients. Making money is something for the account execs, delivery managers, and VPs to worry about.

Mrock4

Claymoore wrote: »

I care about successful projects and happy clients. Making money is something for the account execs, delivery managers, and VPs to worry about.

I agree with pretty much 100% of everything you said, except this. If you truly don't care about the money, you can always volunteer your time.

I DO care about successful projects and clients, but I'm not going to pretend I don't care about money. I do- it's how I take care of my family.

Claymoore

Mrock4 wrote: »

I agree with pretty much 100% of everything you said, except this. If you truly don't care about the money, you can always volunteer your time.

If you're good at something, never do it for free.

I care very much about what's in my check every couple of weeks. I just don't care what is on the net 30 client invoice.

As you move up the consulting career ladder, you should spend less time in the field billing hours and more time in the office or at home on other tasks. It's been my experience that the utilization targets go down as you move up. Sales calls, project scoping, RFP responses, plus supporting multiple projects as a technical resource, which may or may not be billable. You don't need an Exchange Master, or even an MCITP, to babysit mailbox moves which chew up tons of billable hours.