You have to share the upside with your consultants, put a target to bill 1200-1500 hours per year depending on your average engagement length and how much they will have to be on pre-sales work. Then split every hour after that with them 50/50% up to 2000 billed hours and after 2000 hours billed give them 75%, keep 25%.
I know tech folks love to reinvent and learn things on their own and sometimes it yields new and better results but in other cases we'd be better off to look at how BigLaw has been billing out hourly associates for hundreds of years very profitably.
You should look hard at how the Big Law model is doing in 2011. Hint: not awesome.
Instead of setting up business models that encourage people to break their backs finding billable hours, why not the model where consultants have no idea how many "hours" they billed because they don't care? Give people roles where their projects are meaningful and interesting, their comp is stable, and their career paths make sense. Recruit the best people from the vast pool of candidates who want sane jobs with interesting work. Staff them at companies that will pay a premium both for flexible staffing and for top-caliber work. Call it a day.
I know tech folks love to reinvent and learn things on their own and sometimes it yields new and better results but in other cases we'd be better off to look at how BigLaw has been billing out hourly associates for hundreds of years very profitably.