How to Estimate Your Company's Consulting Spend

TL;DR: Companies don't report "consulting spend" as a line item. But you can back into it by stripping out identifiable costs (compensation, occupancy, technology, legal) from operating expenses and examining what's left. This article walks through the method with worked examples from JPMorgan, Pfizer, Barclays, and Deutsche Bank. The consistent finding: most companies spend significantly more on consulting than they think.

By Ulrik Soeraas, Managing Director and Co-founder of Scopecreeper

Where does consulting spend appear in financial statements?

It doesn't. Not as a single, clear line item.

Banks bury consulting in "noninterest expense — other." Pharma companies spread it across SG&A and R&D. Technology companies allocate it across "cost of revenue" and "operating expenses." In every case, consulting is aggregated with other external costs and labelled something generic like "professional fees" or "other operating expenses."

This isn't an accident. Accounting standards don't require companies to break out consulting as a separate category. The result: even the company's own finance team often can't produce a precise number without significant manual work.

How do you back into consulting spend from operating expenses?

The method is straightforward: identify and subtract every cost category you can, then look at what's left. The residual will contain consulting, along with other professional services.

Step 1: Start with total operating expenses. For a bank, this is "noninterest expense." For a manufacturer, it's SG&A plus R&D. For a services company, it's total operating costs minus direct revenue costs.

Step 2: Subtract compensation. Employee costs are usually the largest single item. In banking, compensation typically represents 50–55% of noninterest expense. In pharma, it's lower as a percentage of total opex because R&D outsourcing is large. Most companies disclose headcount and you can estimate loaded cost per employee (salary, benefits, taxes).

Step 3: Subtract occupancy and equipment. Rent, utilities, depreciation on physical assets. Usually 5–8% of total operating expenses for services companies, higher for asset-heavy industries.

Step 4: Subtract known line items. Legal costs, FDIC assessments (for banks), marketing (if broken out), travel (if broken out), and any other category the company discloses separately.

Step 5: Examine the residual. What's left is the bucket that contains consulting, IT services, data and market services, outsourced business processes, and other professional fees. For most large companies, this residual is 25–40% of total operating expenses.

Step 6: Estimate the consulting-relevant portion. Industry benchmarks and supplier analysis help here. In financial services, 40–50% of the technology budget goes to external vendors. Major IT consulting and outsourcing firms (Accenture, Infosys, TCS, Cognizant) are top suppliers to most large banks.

Worked example: JPMorgan Chase (FY2024)

JPMorgan is the most transparent large bank, which makes it a useful benchmark.

Total noninterest expense was approximately $92 billion on a full-year managed basis. The bank had 317,233 employees and a $17 billion technology budget. The technology function included 63,000+ internal employees.

Working through the subtraction:

That $34 billion residual contains technology costs (hardware, software, cloud), marketing, professional fees, travel, data services, brokerage fees, and consulting.

Zooming into the technology budget specifically: $17 billion total, minus approximately $9.5 billion in internal employee costs (63,000 × ~$150K loaded), leaves roughly $7.5 billion in external technology spend — licences, cloud, hardware, and external consulting and staff augmentation.

Conservative estimate of consulting-relevant spend at JPMorgan:

That's 5–8% of total noninterest expense. Consistent with the 15–23% of external procurement estimate for financial services.

Worked example: Pfizer (FY2024)

Pfizer's cost structure is very different from a bank's. Revenue was approximately $59 billion, with $14.7 billion in SG&A and approximately $11 billion in adjusted R&D expense. The company had approximately 83,000 employees.

Working through the subtraction:

That $8.7 billion residual contains CRO costs (contract research organisations like IQVIA and PPD), IT services, regulatory consulting, market access advisory, commercial strategy, and other professional fees.

An important distinction: CROs are outsourced R&D execution, not consulting. They run clinical trials under standardised, regulated processes. It's a major external cost, but it's procured and managed differently from advisory and consulting services. For the purposes of estimating consulting spend, we separate them.

Estimating the consulting-relevant portion (excluding CROs):

Including CRO spend ($3–5B) would push the total external services figure to $4–7B, but CRO is a different category with different procurement channels and management requirements. The $1.2–2.3B in consulting is the spend that's typically unmanaged — bought across SG&A and R&D budgets by different teams, with no portfolio-level visibility.

Worked example: Barclays PLC (FY2024) — UK

Barclays is a useful UK comparison because its half-year accounts break out "consultancy, legal and professional fees" as a separate line item — something most banks don't do.

Barclays PLC reported total operating expenses of £16.7 billion for FY2024, with approximately 90,000 employees. The disclosed half-year figure for "consultancy, legal and professional fees" was £388 million, implying roughly £750–800 million annualised.

Working through the subtraction:

That £2.7 billion contains consultancy, legal fees, professional fees, marketing (~£600M annualised), and other administration costs. The disclosed "consultancy, legal and professional fees" line of ~£776M sits within this — but it combines consulting with legal and understates the total because technology consulting sits elsewhere.

Estimating the consulting-relevant portion:

That's roughly 5–7% of total operating expenses — consistent with the JPMorgan analysis and with the 2–4% of revenue benchmark for banking. The Barclays example shows that even when a bank discloses "consultancy fees" directly, the number understates total consulting spend. Technology consulting sits in infrastructure. Strategy work gets coded as project costs. The disclosed line is a floor, not a ceiling.

Worked example: Deutsche Bank (FY2024) — Germany

Deutsche Bank is useful because its earnings commentary explicitly references "professional services fees" and "technology costs" as cost drivers — giving us more to work with than most European banks.

Deutsche Bank reported noninterest expenses of €23.0 billion for FY2024, with approximately 90,236 employees. Adjusted costs (excluding litigation and restructuring) were €20.4 billion. The bank hired 1,300 technology specialists in 2024 and reported that "higher compensation and benefit expenses were largely offset by lower technology and professional services costs."

Working through the subtraction:

That €6.4 billion residual contains technology platform costs (internal and external), professional services fees, data and market services, and consulting. Deutsche Bank specifically called out "lower technology costs, reflecting the bank's efforts to streamline its technology platform, and reductions in professional services fees" — confirming both categories are material.

Estimating the consulting-relevant portion:

That's roughly 13–21% of adjusted costs — high, but consistent with a bank undergoing significant strategic restructuring and investing heavily in technology transformation. It places Deutsche Bank squarely in the tier 1 category alongside JPMorgan and Barclays.

Try it for your organisation

The examples above cover two US companies and two European companies across two industries. The method works for any organisation with operating cost data — whether from public filings or internal management accounts. The steps are the same:

• Start with total operating expenses
• Subtract what you can identify: compensation, occupancy, legal, regulatory, marketing
• Examine the residual for consulting, professional services, and technology services
• Estimate the consulting-relevant portion using industry benchmarks

If you're working from internal data, you have a significant advantage: you can see actual cost codes and supplier payments, not just aggregated line items. The most common finding when companies do this exercise is that the number is higher than expected. Finance teams routinely underestimate total consulting spend by 20–40% because the spend is distributed across dozens of cost centres, each with its own coding conventions.

Is there a faster way to find out?

Analysing financial statements gives you a directional estimate. It tells you the order of magnitude and whether you're a $10M, $50M, or $200M consulting buyer. That's useful for benchmarking and strategic planning.

But if you want the actual number — engagement by engagement, supplier by supplier — you need to look at the source data: invoices.

Scopecreeper's discovery engine analyses invoices and contracts across all systems, budgets, and labels. It uses AI to classify and group transactions into consulting engagements, even when they're labelled as "professional fees," "technology services," or "outsourced services" across different departments. The result is a complete, accurate map of every consulting engagement in the organisation.

Most organisations complete this discovery in days, not months. The data already exists in your finance systems — it just hasn't been assembled into a coherent picture before.

The estimation method above gives you an order of magnitude. Scopecreeper gives you the actual number, engagement by engagement, from your invoice data. Book a discovery call →