Covid-19 Fallout: Pressure on the hourly rate of the best consultants and lawyers

MUMBAI: Some of the best attorneys and consultants, who charge hourly clients and now work from home due to the Covid-19 pandemic, have seen their fees drop in assignments as clients with cash problems renegotiate and they question the time they actually spend at work.

Many corporate law firms that charge between Rs 20,000 and Rs 75,000 per hour have reduced hourly rates or reduced the number of hours billed under customer pressure, industry trackers said.

The Big Four, Deloitte, PwC, EY and KPMG, which charge from Rs 1,000 per hour for auditing to Rs 12,000 for advisory work, have seen these drop by approximately 20-25% per hour, they said.

“In some of the technology implementation, tax compliance and consulting jobs … there is a lot of pressure from clients as the executive is now doing the same job from home,” said a senior partner at one of the Big Four. signatures on condition of anonymity. .

While rates have been cut or renegotiated almost across service lines, tasks where executives must be present in the customer’s office or factories have been the hardest hit, experts said.

Many companies are asking questions about how they would know if the executive whose hours they are charging was actually working or “watching Netflix,” said a partner at a law firm.

With clients analyzing hourly worksheets maintained and billed by attorneys and consultants, many professional services and law firms are now seeking to introduce technology that tracks the hours an executive actually works on a project. This would be sent to customers as proof of working hours, experts said.

According to industry trackers, while cuts are not negotiated in audits where customers are charged between Rs 1,000 and Rs 1,500 per hour, there have been several negotiations in management consulting. “Therefore, in some cases, customers increasingly opt for a successful rate option and only pay 20-30% up front,” said a senior partner at one of the big four companies.

Tax consulting work, where the hourly fees charged by partners in companies varies from Rs 5,000 to Rs 15,000 depending on the seniority of the partner involved and the complexity of the assignment, has also seen a major correction.

Industry trackers said consulting and advisory work, whether in the M&A, exchange or tax space, has been hit hardest. Many clients are stopping work, switching to the success rate model, or reducing rates by at least 20-25%.

“In these difficult times, you need to work with clients and make sure they do well; that will surely affect consulting and advisory firms over a period of time, ”said Sanjeev Krishan, partner and business leader at PwC India.