Thomas Lünendonk

Fees on the consultancy market

For a craftsman or his assistant, the basis for the title and qualification is regulated more or less uniformly throughout Germany. Correspondingly, different hourly rates are charged for the two skill grades. The situation is rather more multi-layered on the consultancy market. While there are skill grades here too, they are, however, filled differently from one firm to another. What may be a Senior Consultant in one consultancy will be called Partner in another. And whether both senior levels have the same training, qualifications and experience is not attested uniformly by the title. Things are correspondingly harder and less transparent with setting prices in the fee rates for management consultancy. Whereas some clients pay comparatively high daily rates for consultancy, others pay much more favourable ones.

This is the finding of the “Price /Skill Level Matrix Management Consultancy” by Lünendonk GmbH, Kaufbeuren, assessing and analysing the daily fees actually collected by management consultants in thirteen big firms and groups in Germany. All the client firms looked at pay fees in the double or triple digits of millions for outside management consultancy. Additionally, they have largely centralized and professionalized their consultancy procurement. The daily fees analysed by Lünendonk refer exclusively to the consultancy areas of “strategy consultancy” and “organizational and process consultancy”.

Since the client firms studied have differently structured procurement processes and volumes, the daily fees negotiated are in part considerably divergent. The daily fees actually paid result from the list price or offer price less negotiated rebates. Thus, there are clients who on a statistical average pay €1,300 per day for consultancy by a senior consultant, while other clients pay an average of €3,820 per day’s consultancy for the same seniority. Already at 30 commissioned consultancy days by a senior consultant, there are resulting opportunity costs amounting to €75,600 for a project. This of course also makes clear the differing meanings underline this kind of skill designation.

Thomas Lünendonk, Lünendonk GmbH*

*The detailed Lünendonk® Benchmark “Price / Skill Level Matrix Management Consultancy”, covering 13 big firms and groups, is obtainable from Lünendonk GmbH at a price of €950 (plus VAT, including delivery as a PDF file).