Utilisation and realisation: hours to fee revenue
Available hours, billed hours, rates and realisation.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: utilisation and realisation: hours to fee revenue.Updated 30 October 2026
What it does
The revenue build of a firm that bills by the hour or the day. Working days times hours a day is the time a person has; utilisation is the share of it billed, planned by grade and then achieved or not; heads times hours times utilisation is billed hours, an identity a model should rebuild. Each hour has a standard value at the grade’s bill rate, and realisation is the share of that value the client actually pays. Fee revenue is billed hours at the standard rate times realisation, so a fall in demand and a fall in price show up in different lines.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, rows 32–42: Working days a year, Hours a working day, Partners: target utilisation, Principals: target utilisation…
- Assumptions, rows 45–59: Partners: standard bill rate, FY1E, Principals: standard bill rate, FY1E, Managers: standard bill rate, FY1E, Consultants: standard bill rate, FY1E…
- Hours and Revenue, rows 6–25: Available hours per head, Partners: realised utilisation, Principals: realised utilisation, Managers: realised utilisation…
- Hours and Revenue, rows 28–51: Partners: standard bill rate, Principals: standard bill rate, Managers: standard bill rate, Consultants: standard bill rate…
What a reviewer looks for
- Revenue at the standard rate with no realisation.
- One utilisation rate for every grade, as if partners billed like analysts.
- Utilisation on closing headcount, so new joiners bill a full year.
Learn it, then build it
Read · Guide · 11 min
Financial Modelling Best Practices: The Conventions That Make a Model Auditable
Vocabulary: Utilisation.