How has consulting changed, from 2000 to present day? For a particular engagement in 2015, how does it differ from, say, 2010, 2005 and 2000?I guess... what I am really asking is...What sort of margins, what sort of prices, what sort of benefits, everyone thinking they are consultants as they can google - lol, etc.How would you structure it?E.g.Year: 2000Project: Some random 8-week FS engagementNeed: 1 PM (at £5k a day), 4 consultants (£2.5k a day each)Margin: %, despite using the Hilton Langham in 2000 as opposed to Travelodge in 2015Other relevant categories: ???I ask because...I am considering a move back into MC and hope to get some sort of insight into what the market in UK/EU is like these days. With regards to a quota, what is expected these days? £2m? £5m? What is expected of a partner?

I wasn't in consulting in 2000 but I'm very aware of the scissors of doom. Consultants salaries are increasing. Price per day is decreasing.Based on history the lines cross in around 2022 - scissors of doom!

[quote]I wasn't in consulting in 2000 but I'm very aware of the scissors of doom. Consultants salaries are increasing. Price per day is decreasing.Based on history the lines cross in around 2022 - scissors of doom! [/quote]Hence my question.Salaries go up. But rates down. Does this mean that a consultant will be expected to do more, i.e. lesser headcount on a project? Is it possible to offer some baseline figures? Or percentage? What is expected of a 'partner' these days? It it just quota + flag-waving?Are the girls consulting still good-looking? Or has this taken a tumble?

Well Camster, I think you'll find that things have changed a LOT.No longer can we charge junior analysts out at £2K per day for putting together powerpoint slides showing how "The Internet is going to be HUGE". Nor can we cart in semi-senile old duffers to croak their way through a "presentation" and land a £1M job off the back of it.No, clients now are DEMANDING. And ya wanna know why? It's because they now have access to Google. Yes, that's right, everyone is an expert now. Who needs judgement, experience and sober intellectual thought when you can just copy and paste some drivel off a blog? And we all now know how to use powerpoint! It's not just the consultants that can put together those flashy animated shows, oh no, every little runt right down to the coffee maker can stand there waving his arms around and pretending he's steve jobs.Basically, clients are killing this industry. They groan and sweat when you say your day rate for a senior manager is £950. They no longer trust your expertise - they don't just want you to explain things to them, they want you to understand it for them too. And the worst thing? The worst thing of them all is that your client probably earns more than you do. That's right, that same person who spends 8 hours a week thinking up names for projects such as "SKI" and who doesn't have a single care in the world, probably earns 50% more than you. Oh and they get a final salary pension too. Oh and they finish work at 5pm every day. Oh and they have a job for life (unlike you, who frankly doesn't know where you'll be in 3 months time). Oh and they generally have ZERO stress. Have you ever seen a report written by a client? What was it like?Yes, it's a LOT different now to what it used to be. My favourite is when you end up being compared to "consultants" from IT vendors.A lot of clients these days seem to spend money as if it were their own. That's a good thing in many ways, but it's a similar situation to the guy who fixes the dentist's computer but the dentist won't fix his teeth in return "because that's different".It doesn't help either that the likes of the Times keeps running articles about how amazing consultancy is, leading to an influx of people in their twilight years thinking that they have "something to give" when the reality is many of them are barely literate and all they do is push down day rates (after all, the baby boomers that have seen their house go up in price tenfold don't feel the same financial pressures as the young 25 year old who is working his butt off to pay off the 600 year mortgage on his 1 bed studio flat in Brixton).Even some of the strategy firms are getting absorbed by accountants and IT firms.Yes, consultancy isn't what it used to be.

Cams - I think this will be a good question for Coolio and BEP.Both have been around since T Rex ruled the planet hence can give you an overview of the differences. BEP especially as from memory he started on the biggie Consultancies and then moved to one of the Niche boys over the last 50-100 years of his career.One thing to remember though - to be fair it is not just in MCs that everyone is being expected "to do more with less", this is big orgs in general. Managers in 2000 had a computer at their desk and only some had mobile phones. Now pretty much all Managers have mobiles for emails and opening docs, as well as their own conf call number etc to be able to do meeting at 6am with India and 9pm with US of A.

Consulting salaries are increasing?Sure, nominally. But in real terms?

BEP,Thanks.Clients have always been demanding. There was Google back in 2000. True, more content these days, but surely that's one aspect that's required, i.e. convincing the client that they need consultants?Agreed. Clients are killing off the industry. They have in-house or internal teams. Having been in industry and with consulting outfits, I know that I sometimes can seem cocky. LOL - it's frustrating, arguing with someone who knows what they are talking about. However, I am sensible enough to know when I need to engage consultants. Surely this is the case? Or are you saying that clients these days feel that they can tackle issues on their own?Clients' employees? Don't think they are that good. And yes, I've seen reports by clients, being in industry. Much better now where I am (thanks to yours truly), but 2 years ago, no substance! Last week, on a call, I had to put this girl in her place. No internal or external consulting experience, never been in TMT, but talking as though she is god's gift... I've said so many times. We all knew it. A pure strategy play was not going to cut it. No surprise there re. Monitor, etc.What do you think the MC industry will look like in 5 years? 10 years?

Indeed. I guess strategy is just one of those things you can't outsource. It would be akin to a human body outsourcing its brain.But I do think that clients are now much more demanding. I agree that they've always been demanding, but now you have the problem of hipsters and douchebags with smartphones who think that producing high-quality analysis is just a case of swiping a few fingers over a smartphone app. They've seen those inspirational videos where people have huge amounts of ultra high quality intelligence at their fingertips, where somebody (usually a scuba diver) puts together a board presentation with a few hand gestures and flicks of the finger over a tablet device, and they think to themselves "uhh why don't we just do that instead of hiring these consultants".Also, attitudes have changed. The Left has become more prevalent in society, so intellectual thought isn't so highly valued any more. Instead of listening to WHAT people say, they judge them on the "delivery" by which they mean did they like the presenter's haircut, did he have a certain "flair" and so on. We're dealing with the dumbed-down TV generation here, mostly. This makes things very difficult indeed.

I think consultancies will stop being big recruiters of graduates. It is very hard to justify large day rates for green employees. Much better to recruit people from industry with some credibility in the subject area but shape their thinking, presentation and soft skills.So the end of the pyramid model? Not quite as the new recruits still need to be the cash cows / value engine, I think the pyramid will be flatter, and nowhere near as high.Some pure play strategy will still remain with consultancies. Boards like the external view to ratify their agenda or resolve internal politics. Rates probably still coming down due to competition. Particularity with the contractor "band of brothers' type of firm.For large change projects and IT jobs it makes sense for large corporates to have some internal capability, but probably will be of the Enterprise Architect and facilitator type. Then hire in capability for big change projects and specialist areas. Give them the current landscape and the stakeholders.Smaller clients are probably more in need of consultancy help, but have lower budgets.Day rates are also lowering due to increased competition (supply driven). However consultancies do still have an advantage over a group of contractors. The client can blame the firm and get them to sort it out rather than have to deal with individuals. So clients are more demanding, and competition is strong. Margins will be squeezed but firms will need to pay enough for experienced 'experts' not graduate grunts. So where will the squeeze be felt? It must affect the manager and partner levels.I think Managers are currently getting about the same remuneration as clients.I think the Partner level role will fall to parity with clients too.In the end the job will be a lifestyle / interest choice rather than just chasing the money. Look at PE and IB since 2000. Clients have been on more than consultants. I expect the same for other sectors.Who would have thought it - market forces bringing about some equality!My advice for people looking at moving from consulting to industry or vice versa? Neither is 'better'. Both are valid choices and I think money will be less of a differentiator. Go for what interests you. Don't flog your guts as an analyst with the dream of being a Partner with a big house, car and expensive wife and kids. Consulting Partners won't be affording Chelsea town houses in the future.

Rollercoaster,Indeed. Mentioned a number of times. MBB will remain. Also see OW being around, especially since it is part of the bigger Marsh & McLennan. Big 4. The rest will find things tough. I see there being further consolidation.I guess one key point is... I find it hard to reconcile that clients are more demanding, but expect to pay less. Also, what is the source of this extra competition? All input gratefully accepted.

"I find it hard to reconcile that clients are more demanding, but expect to pay less"Tell me about it. I guess it's a symptom of the "have it all" generation. I really don't know the reasons for this change though

Extra competition is a result of the massive expansion in 'consultants'. In the early 1990s they were a rare breed. Anyone remember the programme "Masters of the Universe" on the tele about McK consultants. Then there was the IT boom with their consultants. Large corporate consultancies grew, both in IT and Accountancy worlds, then lots of spin off boutiques and contractors. Not to mention the recruitment consultant and the 'consultants' that drove green minis with yellow numbers on them.Add in the international market (although the Indian invasion of consultancy seems to have gone quiet right now) and I'd say there is more competition for each job than there was in 2000.

Yep, I think that's it. Simple boom in supply driving down day rates. Why hire a team of Harvard MBAs to write your marketing strategy when Johnny the account manager from ABC IT Solutions plc will get one of his bods to do it for free (providing you buy some more CRM software from him).

Also - I'm not sure about salary going up - I was on the 28.5k +10k signon bonus back in 2005 at Accenture.That went up to something like 32.5 + 10 but I understand has now stopped being disclosed but likely dropped again...Not sure if the pay elsewhere is any better, I was on more as a consultant than most seem to be these days

Cheers, confirms my thoughts.

Yeah, salaries have stagnated. People can forget about getting 20% payrises each year for the first 5 years of their career and then 50% payrises every 5 years thereafter. These days it's all smoke and mirrors, you get a big increase on the one hand and a big decrease because of stacked performance adjustments which take away other components of remuneration such as a bonus

Is it just me or am I seeing people who label themselves as consultants talking nominal salaries without talking cost of life and therefore real purchase power?No shìt that clients aren't willing to pay much...BEP, gotta love your view of "the Left", hipsters and douchbags. I mean it.

[quote]Is it just me or am I seeing people who label themselves as consultants talking nominal salaries without talking cost of life and therefore real purchase power?No shìt that clients aren't willing to pay much...BEP, gotta love your view of "the Left", hipsters and douchbags. I mean it.[/quote]The way I see it...The "massive expansion" is down to every Tom, Dick and Harry calling themselves "consultants".BEP,If the Conservatives win with an increased majority - in every sense - that puts paid to your "leftist theory" :)

Which in turn is due to serial body shopping firms calling themselves management consulting firms, whereas they are, in about 90% of the cases, merely the overglorified little helpers of IT change management of big companies, mostly financial services.

[quote]Which in turn is due to serial body shopping firms calling themselves management consulting firms, whereas they are, in about 90% of the cases, merely the overglorified little helpers of IT change management of big companies, mostly financial services.[/quote]What are some examples in your view? Practicus? Anyone else?

LOL, anyone else? Uhm... all the Big4? Capgemini? Accenture probably?I can't remember much, if any, of the work I did in my 3 year tenure as a ‹"«management»"› consultant with one of the Big4 in London being actually management consulting.Most of the work I did (and most people did, I can assure you) was a matter of implementing whatever operational change (which, in most of the tertiary sector clients, was in fact IT change) was devised by either the client or some strategy house.The client didn't have the bodies to be borrowed off the "business/operations as usual" in order to staff the project but not to worry! Here's a bunch of consultants who are just a bit smarter, a bit more skilled and a bit more hard-working than your people. And the (admin/project management) work gets done!Essentially, if you are just implementing somebody else's idea, I don't think you can quite call yourself a management consultant. Mind you, I'm sure there were such projects where I worked and in the other firms I mentioned at the beginning. I just don't think they were in any way enough in quantity (whether that was % of yearly revenue, % of people staffed on those projects etc) to justify the name.A management consultancy would be the company that comes up with the new idea/plan (whether that be new market entry, revenue enhancement, cost cutting, organisational redesign, new marketing campaign etc) and in some cases will actually stay with the client for the implementation (e.g. Proudfoot and its spinoffs all work by doing an initial assessment which identifies opportunities strictly tied to the P&L and then stay with the client to implement those changes and ensure those are reflected in the P&L).

[quote]....A management consultancy would be the company that comes up with the new idea/plan (whether that be new market entry, revenue enhancement, cost cutting, organisational redesign, new marketing campaign etc) and in some cases will actually stay with the client for the implementation (e.g. Proudfoot and its spinoffs all work by doing an initial assessment which identifies opportunities strictly tied to the P&L and then stay with the client to implement those changes and ensure those are reflected in the P&L).[/quote]Though where Proudfoot and its spinoffs are lacking, is in the coming up with a new idea/plan. Most of the times it's operational improvements within the context of an existing strategy or implementing the strategy that some other consulting firm has designed.

No, the element of new things is there. So much more than in yet another Oracle, SAP or whatever COTS implementation, but it's a matter of scale and scope.So the scale might be a single plant and the scope the mere manufacturing strategy of the plant. But within those two limitations, you have pretty much carte blanche as long as what you come up with stuff that impacts the P&L in a demonstrable manner.And I have seen situations in which production changes were just the initial driver to enable improvements in other areas (e.g. lead time to customer, rationalisation of suppliers, changes in the footprint etc), improvements that pretty much couldn't have been conceived by people who couldn't even think of the initial operational improvement within the factory walls/oil field/mine/younameit...True, the new idea might be some kind of egg of Columbus many times... but it still ended up adding more value and making you more of an actual advisor and less of a commoditised body than [i]most[/i] (again, not [i]all[/i]) the work I have seen done at a Big4 (in the UK).And the rates those companies can charge already at junior level and for small projects proves it too.

Working for one of those spinoffs for a few years, my view may be more negative ;-)Though I do get your point about the new element.

They do have many downs, for sure, unrelentless travel to and long stays in genuinely God forsaken places being the top one.But professionally, I felt much more satisfied there than with my time at that Big4 and, more on topic, I did feel much more like my job was that of a consultant. Not that I care much about job titles, social validation through career and all, but it still felt like that.

[quote]They do have many downs, for sure, unrelentless travel to and long stays in genuinely God forsaken places being the top one.[/quote]Unrelentless? Like Irregardless?Lol, but yeah, "god-forsaken places" :)

[quote][quote]They do have many downs, for sure, unrelentless travel to and long stays in genuinely God forsaken places being the top one.[/quote]Unrelentless? Like Irregardless?Lol, but yeah, "god-forsaken places" :)[/quote]Not everywhere is! Edinburgh and Chester were both great places to work away, Northampton and Blackpool less so....got to take the rough with the smooth!

Bart,Try Angola, Libya, CAR (and being 'emergency' flown out), etc. But yeah, there are some nicer places, e.g. Sao Paulo, Boston, etc.

[quote]... professionally, I felt much more satisfied there than with my time at that Big4 and, more on topic, I did feel much more like my job was that of a consultant. Not that I care much about job titles, social validation through career and all, but it still felt like that.[/quote]I can fully understand and recognize that, though lately I have a general feeling that a few of these firms are sliding towards bodyshopping rather than first advising the client what to do.The major advantage of operational consulting is of course that you're working at the beating heart of the client, whatever is driving their revenues whereas in a lot of Big 4 management consulting you either end up in IT or your work is somewhere in the "periphery" of the client's operations.

Ahaha, I meant unrelenting! Sorry!Bartlett, I'm not sure you appreciate the dynamics of working in the secondary sector. A factory is a big, smelly thing. By its nature, it can't afford to be close to anything glamourous and will most likely be in a rather remote area close to a rather small urban centre.Travel to and from it will be long, the things you can do after work (assuming human work hours) are severely limited. Mines and gas/oil fields are even worse but luckily I never had to endure them.

WAKE UP TIME!!As someone has decided I'm obviously older than the ark, then I'm afraid it falls to me to give you boys a girls a bit of a wake up....1. Clients were always demanding - but there was a time when you could progress your career quickly. Clients have not changed, but the market for consultancy ( like any new product) has simply attracted additional suppliers to the point where abnormal profits can no longer be made and normal supply and demand has been re- established.2. I can CALL myself a supermodel, but Givenchy ain't putting me on no catwalk in a slinky silky strapless backless cocktail dress. If your beef is that all those new comers that are not " proper" consultants are somehow stealing your work, then you need to take a long hard look in the mirror. That hairy-arsed prop forward in the off-the-shoulder taffeta looking back at you is you by the way. If that's how the client sees you, no wonder you're not getting many starring roles.3. McKinsey partners bill at 5k a day; their just-left-INSEAD associates at £2.5. Looks like the market is still pretty good for those that have that "X factor", maybe not so good for those with the "y-bother-hiring-u" factor.No offence folks, but markets correct themselves pretty quickly. Your salaries and billing rates are exactly where they should be.

Exactly. There's a reason why Big4 graduates get paid around 30k, maybe even less in audit: they're not that great. And they cost shìtloads of money in training to be even presentable to a self-respecting client. Which is why I moved on and I am now contracting, incidentally.This said, though, I wouldn't be surprised if even McKinsey "conditions" are not as good as they used to be or hasn't proportionally kept up with everything (again, real salaries and the like)... Last time I heard they have been paying less and less of their consultants MBAs... And yes, they're probably still billing those high rates you mentioned, but is their utilisation the same as 15 years ago? We'll never know, but my feeling is "no".I reckon no tier of consulting has remained unscathed by the inevitable changes of such a long time period, the most important one being many clients simply having less money to spend on anything, consultants included?

[quote]1. Clients were always demanding - but there was a time when you could progress your career quickly. Clients have not changed, but the market for consultancy ( like any new product) has simply attracted additional suppliers to the point where abnormal profits can no longer be made and normal supply and demand has been re- established.[/quote]That's just it. MC is not a new product. I feel that the market has changed and this change was 'forced'. Like QE. Saying that, being able to carve a niche puts one in good stead. [quote]2. I can CALL myself a supermodel, but Givenchy ain't putting me on no catwalk in a slinky silky strapless backless cocktail dress. If your beef is that all those new comers that are not " proper" consultants are somehow stealing your work, then you need to take a long hard look in the mirror. That hairy-arsed prop forward in the off-the-shoulder taffeta looking back at you is you by the way. If that's how the client sees you, no wonder you're not getting many starring roles.[/quote]If only it were that straightforward. LOL! But yeah, if you want to mingle will models, I can help :)[quote]3. McKinsey partners bill at 5k a day; their just-left-INSEAD associates at £2.5. Looks like the market is still pretty good for those that have that "X factor", maybe not so good for those with the "y-bother-hiring-u" factor.No offence folks, but markets correct themselves pretty quickly. Your salaries and billing rates are exactly where they should be.[/quote]Interesting that your figures are the same as per post #1. Confirms my thoughts. I would add that having the X-factor is not enough. Close contacts equally important. It's the same in every country. Unfortunately, that's the way the world works.Thanks Cool. And welcome back.

This is a fascinating thread! Some more thoughts and questions:[i]1. Clients were always demanding - but there was a time when you could progress your career quickly. Clients have not changed, but the market for consultancy ( like any new product) has simply attracted additional suppliers to the point where abnormal profits can no longer be made and normal supply and demand has been re- established.[/i]Very true, the market has definitely changed. But I do think something in the mental attitude of clients has changed too. They know the boot is firmly on their foot now and they aren't afraid to kick the consultants up the backside with it.[i]2. I can CALL myself a supermodel, but Givenchy ain't putting me on no catwalk in a slinky silky strapless backless cocktail dress. If your beef is that all those new comers that are not " proper" consultants are somehow stealing your work, then you need to take a long hard look in the mirror. That hairy-arsed prop forward in the off-the-shoulder taffeta looking back at you is you by the way. If that's how the client sees you, no wonder you're not getting many starring roles.[/i]That's true to an extent. But what happens when two frizzy-haired crazy people come to you and one says he's Einstein and the other says he's Einstein too. How do you know which one to employ? Do you go for the one whose day rate is half the price of the other? Most clients don't have a clue about consultancy brands and their relative values3. McKinsey partners bill at 5k a day; their just-left-INSEAD associates at £2.5. Looks like the market is still pretty good for those that have that "X factor", maybe not so good for those with the "y-bother-hiring-u" factor.Hmm, OK but partner day rates are often just there to make them look important, typically their rates are justified by only billing small amounts of time at that rate and also by having a team that has to slog it out a little harder to back up the partner. The associates have a good day rate too but they work very long hours and their hourly rate of salary probably isn't as great as it used to be. Consultants are (I think) having to work harder to maintain the same day rates as they used to[i]No offence folks, but markets correct themselves pretty quickly. Your salaries and billing rates are exactly where they should be.[/i]Yeah, sadly you're right... the market rate is always the right rate

[quote]This is a fascinating thread! [/quote]BEP,Tell me about it. The OP is known to come up with thought provoking topics. If his thoughts are not on hot totties - lol

There's a slight but important difference between "clients are more demanding" amd "clients are more difficult".The first would entail that they know what they want and they expect it.The second, and more common one, is that the clients are still pretty much as clueless as ever. They just feel somehow more justified in losing their temper more often and expecting the consultant to make up for their cluelessness more than you should reasonably do.

[quote][i]No offence folks, but markets correct themselves pretty quickly. Your salaries and billing rates are exactly where they should be.[/i]Yeah, sadly you're right... the market rate is always the right rate[/quote]Unless you have forces playing havoc! QE comes to mind.

[quote]There's a slight but important difference between "clients are more demanding" amd "clients are more difficult".The first would entail that they know what they want and they expect it.The second, and more common one, is that the clients are still pretty much as clueless as ever. They just feel somehow more justified in losing their temper more often and expecting the consultant to make up for their cluelessness more than you should reasonably do.[/quote]Clients are both demanding and difficult.They are demanding because they have Google and can easily google stuff and call themselves 'experts'. LOL.They are difficult because this would be one of the few times where they have clout.Solution?Irrespective of whether you have won the engagement or not, always pander to the client's interests. Help them with their careers. Teach them stuff. Help the company 'uncover' shining stars.Result?Clients will be happy. You will be happy as you basically can join the client if you screw your MC boss. Etc.

Reading your posts, you folks seem to expect:Clients that are smart enough to make working with them a pleasure, but not so smart as to see through your bull$hitClients that are commercially savvy enough to be making enough profit to pay you, but not commercially savvy enough to pay you the market rateClients that recognise the value you bring to demanding circumstances, but not make too many demands of you after you're on boardClients that will understand through osmosis, how you stand aloft in comparison to those shabby off-shore, breakaway, looky-likely, ex-estate agents that call themselves consultants, even though you can't articulate that difference yourselvesGood luck with that...

I just want clients that are [b]truly[/b] exposed to market forces, and for the invisible hand of capitalism to touch their workforce too. That would flush out the rubbish we have to put up with.

BEP - working too long in the public sector?

Indeed. Market forces don't apply when the client's business model is "Give us your money or we'll send you to jail".

No Mr Cool, I don't expect anything other than what happens in a specific circumstance/project.Or rather, I tend to have no expectations and to be as flexible as possible, it's possibly the ultimate skill for a consultant's survival. Each project means throwing a die for the type of work, one for its difficulty, one for the hours, one for the location, one for your team, one for the client people. You'll never roll a 6 for each of them, but you'll never roll a 1 for each of them either.A good consultant is anyone who knows how random things can get and how to just pull though whatever situation.With regard to what I have written, I was more trying to describe the situation rather than just whine. If I wanted an easy peasy job, I wouldn't be in consulting to start with.I'm actually much more critical of what happens within some type of consultancies than of what happens in the client facing work. If we were to assume that really there are too many people who don't quite have what it takes to call themselves consultants, for sure the first to suffer from this would be consultancies themselves, the dynamics of the market and client work would be affected only afterwards...

Once again, a top thread by the OP.As evidenced by the "What's everyone up to?" thread...Form is temporary, but class is permanent.The OP is a class act :)

For true narcissism you really need to refer to yourself in the third person rather than the OP. Mr Cool just doesn't miss a trick!

He is very cool

[quote]For true narcissism you really need to refer to yourself in the third person rather than the OP. Mr Cool just doesn't miss a trick![/quote]No trick! As obvious as anything :)

most important leadership experience and the impact that you had as a leader.?

[quote]most important leadership experience and the impact that you had as a leader.?[/quote]If only you are able to construct a proper sentence!!!