If you lead operations or finance in a GRC or TIC firm, the pattern is probably already on your P&L. Revenue is moving in the right direction. Project margins, when you look at them at engagement level, look healthy enough. And yet the firm-level margin keeps drifting the wrong way. Each quarter the gap widens a little further, and the usual explanations (mix shift, a soft month, one-off costs) stop being convincing.
That gap could actually be your most useful diagnostic signal on the P&L of an expert-led firm, and once you know where to look, it points consistently to the same structural cause. The operating model is absorbing the margin before it ever reaches EBITDA. You can read more about why growth breaks and GRC and TIC firms in our earlier article.
At Reinvigoration, we’ve spent decades helping GRC and TIC firms sharpen their margins. Our partner, Ryan King, explores what you can do to improve margins without heavy cost-cutting exercises.
The most informative number for a GRC or TIC COO right now is not project margin and it is not EBITDA. Instead, you should be looking at the gap between them.
The 2025 Deltek SPI Professional Services Maturity Benchmark, which surveyed 403 firms, recorded billable utilisation at 68.9 per cent and project margins holding at roughly 35 per cent. Over the same period, professional services EBITDA fell to 9.8 per cent, the lowest in five years and down from 16.1 per cent in 2022.
When project economics are healthy and firm-level margin is falling, the answer is not on the engagement itself, but rather everything that surrounds the engagement. The drag has moved out of the work and into the system the work runs through, which is precisely why the usual project-by-project margin reviews so rarely surface it.
In an expert-led firm, the largest cost on the P&L is qualified time. So the question worth asking is where qualified time is going, instead of chasing where the spend is going.
Across the GRC and TIC market, the answer is consistent. Auditors, inspectors, consultants and reviewers spend an estimated 25 to 40 per cent of their working week on activity that does not appear on any certificate or report deliverable:
In other words, internal coordination, version control, and reconstruction of context that nobody captured the first time around.
Every hour of that activity is paid for at a qualified rate, but none of it is what the client is buying. And because it sits inside project time and inside operations overhead at the same time, it does not show up as a single line on the management pack. Each individual leak looks small enough to live with. In aggregate, this is the gap between 35 per cent and 9.8 per cent.
Stat to highlight: 25-40%. Estimated share of qualified time absorbed by non-billable activity in expert-led firms.
When margin compresses, the instinct of most leadership teams is to look for spend to remove. Discretionary line items get reviewed, hiring slows, and travel and training take a haircut. None of these moves close the gap, because none of them address the cause.
The overhead absorbing the margin is a structural feature of the operating model, built into the workflows, handoffs and systems that require this much non-billable activity to keep moving.
Cutting headcount or freezing spend in a system that needs all of that activity to keep moving will not produce more margin, but it will produce more rework, longer cycle times, and more pressure on the people still in seat. Quality and capacity will degrade before EBITDA improves.
Rather than looking at cost-cutting measures, we’d suggest looking in detail at where qualified time actually goes. It’s the single most useful first measurement in a margin diagnostic, and you should focus on activity rather than by client or engagement.
In our experience, a two to four week activity log across a representative sample of qualified staff is usually enough to produce the picture. The number it produces is almost always larger than the leadership team expects, and it changes the boardroom conversation in a way no margin chart on its own can.
Once that picture is visible, the redesign opportunities stop being abstract. The conversation moves from "we need to improve margin" to "this report template, this scheduling handoff, this QA loop, this duplicate data entry". That is the level of specificity at which margin actually moves.
In short, yes you can. Margin in a GRC or TIC firm is not really lost on the engagement. As we’ve discussed, it’s more often lost in the system that surrounds the engagement, which is why project-level reviews keep coming up clean even as firm-level EBITDA keeps slipping.
The firms that recover that margin do not do it by cutting people or putting up prices. They do it by making the operating model carry less weight per piece of qualified output.
That is the premise behind our Simplify4Scale methodology. Start with operational reality, quantify where qualified time is actually going, address the highest-friction constraints first, and build the internal capability to keep the improvement in place.
Our whitepaper, Scale Without Hiring. A COO's Guide to Unlocking Growth in GRC and TIC Through Operational Design, sets out the diagnostic and the redesign approach in detail.
If any of the above has resonated with you, and you’d like to start a conversation with Reinvigoration about improving your margins, please get in touch. We’d love to help.