Key Insights
- Gain share is not new in operations. Some firms have used it for as long as their leaders remember.
- It works best on first engagements. Follow-on work usually moves back to a straight fee.
- Clients often use it as financing. Fees paid out of savings help cash flow, especially at PE-owned companies.
"We've been doing gain share for as long as I can remember being a consultant in the firm," one operations practice leader told us.
A leader at another firm said his practice now does more gain share than at any point in his career – roughly 40% of its work. He called that "highly unusual." A third firm said 10–20% of its work is priced on value, and most of that is tied to deliverables rather than savings.
Across consulting, firms are debating how far to move away from billing for time. When we asked healthcare firm leaders the same question earlier this year, they described outcome pricing as challenging and still early. Operations firms have been doing it for decades, in large part because procurement and cost savings are easy to measure. What they told us during research for Management Consulted's 2027 Top Operations Consulting Firms ranking shows where fees tied to results work, where they break down, and what clients are actually buying when they ask for them.
The ranking is global and defines operations consulting as the work that changes how a business buys, makes, moves, and delivers what it sells. This article is about how firms charge for that work. It is not about pricing strategy for clients' own products, which the ranking excludes.
Gain share fits specific situations: a first engagement, a client short on cash, and work with a clean baseline. Firms that treat it as the future of every fee will misprice the work that doesn't fit.
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Operations Firms Use Gain Share at Very Different Rates
The firms we heard from don't agree on how much of their work should ride on results, and the reasons trace back to the kind of work each one does.
The firm that has used gain share the longest leads with it. "We have no qualms in starting a conversation with that," its practice leader said. The firm doesn't love the term, because gain share can sound like the client gets "the short end of the stick." It calls the arrangement skin in the game instead.
The practice where gain share has reached roughly 40% of the work does much of it for private equity clients and a lot of it in sourcing, where savings are easy to count.
The firm at 10–20% does mostly factory design, lean, and production ramp-up. Its leader said 80% of that work is "the very bare basics," and the value-based share is "still deliverable-based": the client pays when a defined deliverable is met, which can be an exercise or a monetary result. The firm is moving further toward value pricing "slowly," and he was clear about why: the pace "is driven because of our demand, not of our capabilities."
A fourth firm uses both models "quite freely." Most of its projects are priced on the team needed to deliver a result. Some have an agreed fee with "an upside and a downside" that is "quite mechanical" and not tied to days and hours. On one recent project, the client could stop payment at a stage gate every four weeks. "We won't invoice you unless you are" happy with progress, the leader said.
For Clients, Gain Share Is Partly a Financing Decision
Firms usually describe gain share as a sign of confidence. The leader whose practice now does the most of it described two different reasons clients want it.
"One is it's deferred payments," he said. "Because the gain share's on the back end, so it helps with the cash flow." The other is proof: "People want to know that the value has delivered and hit the bottom line."
The cash flow point matters most for private equity clients. Buyouts recorded longer holding periods in 2025, with industrial companies among the longest, largely because high interest rates raised the cost of capital. A portfolio company in that position would rather pay its consultants out of savings than out of cash it doesn't have yet. That makes gain share a natural fit for private equity consulting, and it means the firm is effectively lending the client its fees until the savings arrive.
The proof point is about trust. The firm that leads with gain share explained why it raises the option early. The Americas are "a very mature consulting market," its leader said. "Most of the companies we work with, they have been over consulted and many of them feel… the ROI is lower with every single conversation they have."
Gain Share Works Best on the First Engagement
The same leader who called his practice's gain share level unusual also put a limit on it. "I can see the first engagement being gain share," he said. "But I can't see the follow-ons. Once you see that you've maxed out, it just makes more sense to go on straight fee."
Once the large savings are captured and the client trusts the firm, the reasons for gain share mostly go away. There's less upside to share, the measurement gets harder, and the client no longer needs proof.
Client size changes the answer too. The firm that uses both models said its largest clients – the ones with big procurement teams that run formal RFPs – increasingly prefer a fixed price for a result. They don't want to "get under the hood and try and count the hours." They want to know "what you're gonna do, and how much it will cost," and a price tied to an outcome is easier to compare across bidders.
Smaller clients and first-time clients go the other way. They want to see the hours and the team. The firm builds those fees up from the team required rather than picking a number just below the expected savings – an approach its leader described as a matter of honesty.
When gain share fits
| Situation | Fit | Why |
|---|---|---|
| Cost takeout or sourcing with a clear baseline | Strong | Savings are easy to measure and attribute |
| First engagement with a skeptical client | Strong | The firm proves results before the client commits further |
| PE portfolio company short on cash | Strong | Fees are paid from savings, after they land |
| Large client running a formal RFP | Often | A price per result is easier to compare than hours |
| Follow-on work after the main savings | Weak | Little upside left; a straight fee is simpler |
| Factory design, lean basics, capability building | Weak | Results are hard to separate from the client's own work; deliverable-based fees fit better |
Firms Paid on Results Change How They Deliver
A firm can't collect on savings that disappear after its team leaves. Leaders said that changes how they staff and run the work.
"You cannot be, you know, in these deals thinking about just maximizing your share as a consulting firm," the leader of the firm that leads with gain share said. "You have to be in one team that's driving the value." In her view, every firm claims it knows how to drive value. The test is whether the client's own people would say the same about the firm.
The firm described what that looks like in practice: heavy change management so people understand the future state and buy into it, staying connected to programs after the team has left the site, and leaving smaller specialist teams in place at lower price points. Those teams give the client confidence the value will stick, she said, and give the firm confidence "we're going to end up seeing the value in the bottom line."
The firm with monthly stage gates said the same thing a different way. It isn't there to "give you recommendations and advice and hope it sticks." Every project has a part that makes sure the changes are built into how the client runs.
The model is also spreading beyond cost. The firm that has used gain share longest said skin-in-the-game deals, long common for cost takeout, now show up more often in end-to-end programs and even in work aimed at revenue. Its leader expects consulting to see "different revenue models … beyond the standard billable hours, or T&M, or fixed fee contracts" as more delivery shifts to AI agents and digital tools. That's the same shift we described in AI in operations, where repeatable work is moving from people to tools.
Clients Often Ask for Gain Share Because They Doubt the Return
Gain share is usually presented as a firm's confidence in its own results. The leaders we spoke with described something closer to the opposite on the client side. Clients ask for it because they've paid for consulting before and aren't sure it paid off.
That has three consequences for firms.
First, the firm carries the risk and the financing. It funds the work up front and gets paid only if the client's numbers move.
Second, gain share pulls firms toward work that's easy to measure. Cost and sourcing savings fit cleanly. The foundational work clients need before they can use AI – documenting processes, fixing data, getting lean basics in place – doesn't. A practice that relies heavily on gain share can drift toward the first kind of work, even when the client needs the second.
Third, gain share doesn't solve the trust problem for long. It can win the first engagement. By the second, the client has to trust the firm enough to pay a straight fee. Firms that lean on gain share to win work still have to earn the relationship some other way.
What This Means for Firm Leaders
Offer gain share where the baseline is clean. Use it for cost takeout, sourcing, and other work where the gain can be measured and attributed. Avoid it where the result depends mostly on what the client does after you leave.
Use it to open a relationship, not to run one. Agree up front how the fee model will change for follow-on work once the main savings are captured.
Price from the team, then add the risk. Build the fee from the team the work requires, then set the upside and downside. Pricing as a discount off the expected savings is harder to defend.
Budget for the savings to last. If you're paid on results that land after you leave, plan for change management, follow-up, and teams left in place, and price them in.
Match the fee model to the segment. The ranking's operations market map splits the market into 10 segments. Procurement and cost transformation have clean baselines. Factory design and operational due diligence rarely do. A single fee model across all of them will fit some badly.
The Bottom Line
Gain share is useful when the result is measurable, when the client needs proof, or when the client needs to pay out of savings. It is a poor fit for follow-on work and for the foundational work many clients now need. The firms that use it well treat it as one fee model for specific situations, not as the future of every engagement.
FAQ: Gain Share in Consulting
In consulting, gain share is a fee arrangement where part of the firm's pay depends on measurable gains the client achieves – usually cost savings, sometimes revenue. It is typically paid after the gains are confirmed, often alongside a reduced base fee.
The client and firm agree on a baseline, how gains will be measured, the share the firm receives, and the period it covers. Some contracts add an upside and a downside around a fixed fee instead of a pure percentage.
Gain share pays the firm a share of measured gains. Value-based pricing sets a fee based on the expected value of the work, often paid when a defined deliverable or milestone is met. Many firms that describe their pricing as value-based still tie it to deliverables rather than savings.
It works best on first engagements, on cost takeout and sourcing work with a clear baseline, and for clients that prefer to pay out of savings, such as private equity portfolio companies. It fits poorly with follow-on work and with foundational work whose results are hard to measure.
Most consulting firms use time and materials, fixed fees, or deliverable-based fees. Some add fees at risk, stage gates where the client can withhold payment, or gain share tied to measured results. Many firms use more than one model, depending on the client and the work.
Yes. Management Consulted's 2027 ranking defines operations consulting as the work that changes how a business buys, makes, moves, and delivers what it sells, and fees tied to results have long been common there because procurement and cost savings are measurable. How much firms rely on it varies widely by the kind of work they do.
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