What was the year-to-date utilization rate reported for the firm in the example?

• A. 41%
• B. 50%
• C. 68%
• D. 75%

Answer: (A)

Utilization rate measures the portion of the firm’s available hours that are billed to clients. Year-to-date reflects the portion of the year that has passed, so you’re looking at all billed hours divided by all hours the firm could have worked up to this point in the year.

In the example, the reported figure is 41%, which means about 41% of the available hours were billed to clients. To visualize, if the period had 1,000 potential working hours and 410 of those were billed, the utilization would be 41%. This, in turn, suggests a lower-than-typical level of billable activity, since firms often target higher utilization (around 70–80% in many practices). The other percentages would require more or fewer billed hours relative to available hours than what the example shows, so they don’t align with the reported value.