Sublime

Profits also come, in large part, from the firm’s ability, through its project team structure, to leverage the professional skills of the seniors with the efforts of juniors.

The market for the firm’s services will determine the fees it can command for a given project; its costs will be determined by the firm’s abilities to deliver the service with a cost-effective mix of junior, manager, and senior time. If the firm can find a way to deliver its services with a higher proportion of juniors

this latter variable is a significant force in influencing the economics of the firm, its organizational structure, and its positioning in the client and people markets.

If we know the salaries of the staff members and their billing rates, we can construct the pro forma income statement of this firm at full utilization.