Professional services EBIT

Professional services EBIT margins cluster around 8-15% for the listed names. The figure is mostly a people-cost story: revenue is hours times rate, costs are salaries, and the bridge between them is utilisation rate^[Damodaran].

Listed-firm benchmarks

Accenture: ~15% EBIT margin.
Booz Allen: ~10% EBIT margin.
WPP: ~11% headline operating margin (volatile).
Marsh McLennan (broker, but services-shaped): ~22%.

Utilisation drives EBIT

If a firm staffs to 80% utilisation and runs at 70%, EBIT compresses 200-400 bps because the cost base is fixed in the short run. The reverse is true in upturns. Utilisation is the lever the COO watches weekly.

Partner draws in private partnerships

For private partnership financials (Big 4 audit, white-shoe law), partner draws sit in compensation expense, so reported EBIT is effectively post-partner-comp. Comparing a private partnership to a public services firm requires adding partner draws back to get to a comparable-economic EBIT.

See UK / IFRS variant and EBIT margin calculator.