Expert: Dr. Abdulaziz Jarkas - 11/5/2006

Question
how does a consulting firm profits? can i have the whole structure of a consulting firm (like how does it works?)

Answer
Dear Jan,

Well, it is different in different countries and regions. Nonetheless, consulting firms usually charges about 2 to 3% of the estimated construction cost of the project for the Design phase. They also charge approximately similar amount for the Construction Supervision or Contract Management. Typically, such firms control their expenses to achieve a minimum of 10-15% as a net profit. However, that the stated rates are dependent upon the economy; it goes up as the economy booms, and take a nose dive as the cycle descends. It all depends on the construction market.

A typical structure of a consulting firm comprises a Managing Director, Design Principal, Chief Architect with his team, Chief Structural Engineer also with his team, and services Engineers, i.e. Mechanical, Electrical, etc.

In addition, a team of Draftsmen are also included within the team of each design discipline. Furthermore, a group of Project Managers, Project Engineers, Site Engineers, Foreman, or Superintendents are usually in charge of the Contract Management (Construction Supervision). It all depends on the size of the firm. However, this should give you an idea.

Hope this helps!

Dr. A. Jarkas