Realization rate

Definition

What a practice actually collects against the standard rate for the hours it worked.

Why It Matters

Two practices with identical billings can be very different businesses, because one writes off a fifth of its time before the invoice goes out and calls it client service. The write-down usually sits with a small number of long-standing clients the owner will not reprice. Ask for realization by client and by partner, and treat the worst decile as the first thing a new owner has to decide about.