Client Concentration Risk
Measures the dependency of the consultancy on its largest clients. It provides a view of how much of the firm's revenue is generated by a small number of top clients. High client concentration can pose a significant risk. If a major client decides to leave or faces financial troubles, it could have a substantial negative impact on the consultancy's revenue.
(Total revenue from top 'X' clients / Total revenue) * 100
If a consultancy's top 3 clients generate $500,000 out of a total revenue of $1 million, the Client Concentration Risk is 50%.