Business As Usual
Like all commercial enterprises, a consulting firm’s continued viability depends upon its success in generating revenues and minimizing costs in order to turn a profit. Typically, consulting firms have their own growth and revenue as a significant part of their agenda.

It is common practice to compensate employees in consulting businesses for sales – both the first sale that occurs with a new prospect and any second sales that may occur as follow-on work beyond the original contract. Likewise, employees' ascent up the company hierarchy depends in part on their success in sales.

Just like other businesses, consulting firms seek to minimize costs. For instance, many consulting firms use a leveraged business model where more experienced and senior level people sell and manage work later serviced by junior employees. The partner focuses on growing the business while the leveraged use of associates reduces internal operating costs. Junior associates know that attaining the desirable position of partner ultimately requires demonstrated success in initial and second sales. For every ten beginning consultants hired, few will be retained long-term. Those fortunate few on the track to partner status may feel pressure from conflicting demands. For instance, how can they take the time to grow the business and simultaneously mentor internal associates?

In addition, some consulting firms develop standardized products or methodologies in an attempt to meet client needs and, at the same time, carve out a market niche. Their standardized approach has the added benefit of minimizing costly customization and not reinventing the wheel for each new client. Such consulting companies usually deal with large, complex projects that generate long-term involvement and sizeable fees. Clients buy expert knowledge translated into standard methodologies with clearly defined deliverables, a detailed project plan, and consultants to do the work for them.

In contrast, some consulting firms prefer to do the work with, not for, the client. These firms typically have fewer standard products. Instead, they offer a process whereby client and consultant mutually discover issues and together create solutions that typically use both client and consulting company employees in the delivery of that solution. While offering some standard products, such firms inject more customization into their client work. Rather than emphasizing standard methodologies, they assess needs and design interventions specific to a particular client. However, even these firms recognize the financial benefit of at least some standardized products and processes.

So, where’s the rub? So far, it sounds as if consulting firms are employing typical, widely accepted business practices. What complicates the issue is the nature of the relationship formed between consultants and their clients.

Relationships Based on Trust
When seeking outside help from a consultant, prospective clients often feel a degree of vulnerability, not only for themselves but also for their business. They usually have experienced many anxious moments that led them to conclude, “I have a problem.” It’s an especially sobering moment when they conclude that “it’s a problem I can’t fix on my own.”

For some, the use of a consultant takes on less personal overtones such as when the company opts for new technology or a new business approach. In these circumstances, seeking consulting help is no reflection on the individual. Nonetheless, the client often is playing catch-up with consultant’s savvy in areas new to the client. Dependent on the consultant’s experience and knowledge, the client plays neophyte to the consultant’s role as expert. Once the consultants leave, the client will have to tend to an organization inconvenienced by changes and employees fearful of how the changes will impact them. Once again, a degree of vulnerability exists for the client.

The above scenarios all assume a client in need of help and a consultant with the skills and willingness to help. Based on this implicit promise to help, clients trust that consultants have their best interests at heart and that they undertake work for the client’s ultimate benefit.

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