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Consulting fees are a funny phenomenon. We’re routinely asked by a variety of constituents to conduct benchmarking on fees for all types of consulting and advisory services — from global or specialist firms wishing to compare their rates among competitive sets, to clients wondering if their negotiated rates are truly “market competitive,” to outside investment companies that offer advisory services to their portfolio companies and must demonstrate compliance to prevailing rates.

In every case, we’re confronted with answering questions that should seem rather definitive. After all, we’re talking about data based off “book rates” that firms routinely provide to their clients. Unfortunately, rate cards are like playing Texas hold ‘em … you show me yours and I’ll show you mine, but only after we place our wagers.

We’ve normalized eight staffing levels that apply to virtually any type of consultancy. And we still look at hourly rates against those levels, by multiple services, industries, and geographies. And the more often we’re sifting through this data, the more conflicting the results, sometimes to a point that defies logic as to why firms charge what they charge.

When consulting was actually time-based many decades ago, fees stayed within the privacy of the client. And when fixed-fee pricing became the norm, actual staff-level rates were pushed further behind the screen and became an internal accounting function. Yes, clients received breakdowns of hours and could triangulate costs. But leverage, not time, became the driver — how else does one account for 20% utilization rates amongst partners against 100% for the analysts being managed.

It’s no wonder that many people perceive consulting fees like that singular dusty mechanic’s shop you’re forced to employ when your car sputters in the middle of the Mojave Desert — “how much money you got in your wallet, boy?”