Margin for Management Consulting.

The boutique consulting pricing problem

Boutique consulting prices differently than the big-three firms (McKinsey, Bain, BCG). Those firms have rate cards by partner, principal, manager, and associate that everyone enforces. Boutiques run on partner-discretion pricing: every partner discounts their own way, deals get done over coffee, and the firm-level realized rate drifts 15–20% below the published rate without anyone noticing.

The pitch sells the partner's brain. The delivery is mostly an associate on decks and models. If the proposal assumes 60% partner time and the engagement runs 20%, the firm is wildly under-billing associate hours — or wildly over-billing partner hours. Either way, the margin number on the proposal is fiction.

Common pricing challenges

• Partner-discretion drift. Every partner negotiates their own discount. Across the firm, the average realized rate is 15–20% below the rate card and nobody can name a number.
• Partner pitch, associate delivery. Pricing assumes partner-led. The work runs associate-led. The role mix on the proposal rarely matches the mix on the timesheet.
• Retainer-to-project leakage. Multi-month retainers absorb every "while we're here" request. The client sees one engagement. The team delivers four.
• Blended rates that hide the math. A single blended rate hides which roles are profitable and which are subsidizing. Reset rates per role and the picture changes.

Role-level rate cards that survive partner discretion

Set up partner, principal, manager, and associate rates with fully loaded cost — salary, overhead, target utilization. When a partner discounts an engagement, Margin shows the floor before the discount drops below cost. The rate card stays honest because the math is in front of you.

Engagement estimates that price the real role mix

Build the engagement on the role mix you'll actually staff — not the mix the pitch implied. If the work runs 20% partner and 80% associate, price it that way. If the proposal needs to lead with partner time, you see what that costs. The mix is no longer a guess.

Fixed-fee engagements with a margin floor

Most boutique work is fixed-fee. Margin shows the floor at which a fixed fee stops being profitable, given the staffing plan and the firm's overhead. Quote above the floor and you're in business. Quote below it and you'll know — before the engagement letter goes out.

Across the practice, every engagement carries its own realized rate and margin score. The partners can see which retainers are bleeding associate hours and which are pulling above the rate card.