What it means in practice
A growing professional services firm accumulates measurement without necessarily accumulating insight. Utilisation is visible, comparable across people, and easy to report to a management committee. The unbillable activities that sustain the firm over a longer horizon — pipeline development, capability building, informal knowledge transfer between senior and junior staff — are harder to measure and therefore harder to defend when a target is raised. The firm does not decide to deprioritise them. The measurement system decides for it.
The question this raises for growing firms is not whether utilisation matters — it plainly does — but what a given target displaces. That is rarely asked directly. It is easier to ask “is utilisation on target” than “what is not happening because utilisation is on target,” even though the second question is the one that predicts the firm’s trajectory two years out.
This connects to a second, closely related body of research. Steven Kerr’s work on reward systems describes organisations that reward one behaviour while explicitly hoping for a different one — and people respond, reliably, to what is rewarded rather than what is merely hoped for. A firm’s stated hope is almost always that senior staff will keep developing new business alongside their billable work; what it actually rewards, through utilisation targets, bonus structures and partner scorecards, is billable output specifically. Kerr’s research suggests this is not a failure of communication or culture — restating the hope more forcefully rarely changes the underlying calculation an individual makes when deciding how to spend an unstructured hour. The reward system is doing the deciding, and it is consistent, even when the firm’s stated priorities are not reflected in it.
In practice, this shows up as a specific and recognisable pattern at the associate-to-partner transition. A newly promoted partner is typically still measured, in their first year or two, almost entirely on the same billable metrics that earned them the promotion, even though the role now formally includes origination responsibility. The firm has changed the job description without yet changing the measurement, and the new partner — rationally, and usually without any conscious decision to deprioritise business development — continues behaving like a highly billable senior associate, because that is what is still being counted.
Why it happens
Growing firms tend to inherit their measurement systems from an earlier, smaller stage, when informal oversight compensated for what formal metrics missed. A founder or small partner group could notice, without any dashboard, that a promising piece of business development had quietly stopped happening. At fifteen people this noticing is nearly automatic. At eighty or a hundred and fifty, it depends on a measurement system doing the noticing instead — and most firms’ systems were never built for that job. They were built to track billable output, because that is what clients pay for and what the partnership distributes against.
The deeper issue is that unbillable time and billable time draw on the same finite pool of hours, and only one side of that competition is instrumented. A person under a utilisation target does not need to be told to prioritise billable work; the incentive is doing that work for them, silently and continuously, every week.
Where this varies
The effect is sharper in fee structures with hard utilisation floors than in firms where partners set their own mix with more discretion. It is also sharper in firms scaling quickly, where the ratio of billable pressure to available senior time rises faster than the firm’s capacity to protect unbillable activity deliberately. Firms that have made a specific, named allowance for non-billable development time — rather than leaving it to whatever is left over — tend to see the displacement less severely, though the underlying tension between the two forms of time never fully disappears.
It also varies by seniority. Partners and senior staff, who typically carry the firm’s most important client relationships and the most business-development responsibility, often have the least protected time for exactly that activity, because their utilisation targets are frequently the highest in the firm. Junior staff, whose time is easier to schedule and less commercially urgent in the moment, are sometimes the ones with the most slack — even though they are the least positioned to bring in new work. The firm’s growth capacity and its measurement pressure can end up inversely related, concentrated in different people.
A useful, low-cost habit some firms adopt is treating unbillable, growth-oriented time as its own line in planning conversations — not to formalise it into a rigid process, but simply to make its existence visible in the same conversations where utilisation is discussed, so that a decision to trade it away is at least a decision rather than a byproduct.
Where this shows up
People working in professional services firms will probably recognise this pattern first. The wider Professional and Knowledge-Based grouping and the other sectors page show how it presents elsewhere.
Questions worth considering
- What unbillable activity in this firm has quietly declined since the last time a utilisation or productivity target was raised?
- If nobody is measuring an activity, who would actually notice if it stopped?
- Does the firm’s growth plan depend on any activity that competes with billable time for the same hours?
Your team is facing similar challenges?
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