They want us staring at screens so they can tell investors “Look how many people we’ve got staring at screens! Now give us more money.” The money they take from us only serves as a metric used to convince investors that they’ll make more money in the future. It’s not about revenue - it’s about earning potential.
At the risk of defending the madmen, this sounds a bit like dismissiveness from ignorance. Without insight into each of those fields and what they do and don’t do, it’s easy to say they don’t do anything meaningful because the output of their day is not measured by physical things getting made or moved or improved.
Granted some forms of financial movers seem to be parasites rather than symbiotes.
And I’d question the presence of lawyers on that list without the qualifier “corporate.”
Heh. I’m pretty sure @msmith537 is or was a management consultant.
Well…as an MBA who has spent most of his 30 year professional career as a management consultant working at or for clients in the Big-4, Wall Street banks, insurance companies, big tech companies, and law firms, are you under the impression I don’t know exactly what these jobs do?
Heck, half the times when I work with these people THEY can’t explain what their jobs actually do.
It’s not even so much that there isn’t a legitimate purpose to any of these jobs. But there might be a question why many of them get paid so much compared to other jobs that seem more necessary and what value they actually create and for who.
I guess I am the one speaking from ignorance, not knowing your career.
That said, I used to work as an engineer in the space industry. I could easily be dismissive and describe the job as pushing paperwork - writing forms to give permission to move things from one place to another, telling technicians how to do their tasks, then making sure to get the dozen signatures to make it official.
But I could also take the time to explain the purpose of the documentation chain to ensure everything was exactly what it was supposed to be and nothing was going to accidentally kill an astronaut. I might not have physically made any hardware, but I did play a key role in getting it made and shipped for flight.
So I won’t try to tell you what you do or don’t know. You obviously have more insight to the topic than I do. I just, know that it’s easy enough to make a job seem superfluous and useless to those who don’t know about it.
But I accept that many of those jobs you describe are largely about shuffling money between rich people without actually providing much of value to the average person. And some are actually detrimental - corporate raiders being an example.
Ultimately it’s a “what the market will bear” type situation. A big company can toss a few million at some consultants to solve a problem and it’s money well spent in their minds, because they’re paying by the hour, not for full-timers. Meanwhile, the consultants make bank because they have figured out right where they’re just affordable relative to the companies doing it themselves, which is surprisingly high.
I think a lot of it is that when a company past a certain size needs help doing or solving something somewhat finite (i.e. not standard operations), their options are limited- they either hire one of the catch-all consulting firms at $$$$, or they try and gather the right people, and set up the right team to do it themselves… and then when the problem is over, they’ve got a bunch of people on the payroll, etc… So hiring a management consulting company is often the cheapest and best option they’ve got, even if the prices are exorbitant.
Meanwhile, the internal structure and pay system of the consulting companies seems to have been lifted directly from the Mafia. Everyone gets their defined cut as you go up the chain of command. So they may bill someone at $350/hr, but that guy only makes say… $55,000, even though they’re billing him out at $728,000 per year. All the rest of that goes to everyone up the chain- his direct manager gets a percentage, his managing director gets a percentage, the head guys of the division get a percentage, and so forth. Some goes toward general profit and gets shared out with the ownership eventually. It’s set up to bilk clients; the whole thing incentivizes billing as much as possible, not actually providing good solutions and service to customers.
It’s a great gig if you’re higher up in the hierarchy, but it often sucks if you’re not. You do crazy amounts of work, in crazy places, on crazy schedules, for a regular salary.
Krugman’s substack today address whether things really are different today than they were in the last few decades (spoiler: they are!)
There is a chart that shows the top 0.00001% really pulling away from everyone else when it comes to the share of total wealth. And, it shows how much political influence they have, pouring money into elections, which may also bring it to everyone’s attention as something that’s different from the past.
Doesn’t that sound like the consulting firm is in fact offering a valuable service at a cheaper price that it would take to perform that service inhouse? If so, what exactly is the problem?
Keep in mind as you get higher up the hierarchy, you’re also expected to produce more revenue in the form of sales (also sort of like the Mafia).
So like I was a director level at my last firm. Basically a level where I’m making a couple $100k a year with bonus and have enough autonomy and authority where I am largely responsible for setting everyone’s schedule. I also didn’t really travel that much (Zoom calls have kind of replaced a lot of 4 days a week travel).
But I was also required to contribute to a certain amount of sales every year, on top of my full time job leading client engagements (extending those engagements counts though). And on top of that, we are required to participate in a bunch of “community” bullshit like training interns or whatever.
A lot of the “sales” is actually top down. So it’s not like I’m out there pounding the pavement. The partners are really the ones responsible for closing the deals. And then they disburse “sales credit” to the people on their team they like.
So what happens in practice is when you see these “superstars” get promoted every 2 years until they are suddenly directors or managing directors, it’s not like a 30 year old suddenly found $5 million in revenue. More likely that superstar became aligned to some rainmaker who has a $50 million a year relationship with some big client (where he may have been an executive at one point or the executive he sells to may have been a former member of the consulting firm) and they just keep getting fed work and positioned for promotions every cycle.
There can also be a lot of internal politics around who gets credit for sales and whatnot as it directly impacts their raises and bonuses.
It’s a similar model in any professional services firm like a law firm or accountancy.
If there’s anything inherently “wrong” with the management consulting model is that it feels like a jobs program for overcompensated MBAs who don’t really know much about the work they are actually doing. The client relationships are often incestuous and symbiotic, with the firm acting as this sort of overpriced staff augmentation outplacement agency providing overpriced highly polished consultants under the guise of “strategic partnership” while doing mostly boring backoffice bullshit busywork.
There has also been a lot of controversy around the advice consulting firms like Mckinsey provide their clients or whether clients every actually receive any value.
It all felt fairly, if not crooked, at least not very straight. I actually got fired because I got cross-ways with management after I’d found a tool (I worked in forensic data mining for our forensic accountants) that allowed us to make our SQL database code much more uniform, better looking, and cleaner. And in a second or two, rather than hours or days of extraordinarily tedious and detailed manual work that added no actual value to our clients.
But I was basically told that we weren’t interested in using this tool, because we could bill clients to manually go through and format these pages of code by hand before we printed it all out on paper and put it in binders.
I commented that this wasn’t ethical, and was basically cheating our customers. And not shockingly, I was out the door in a week.
Facts are stubborn things, ain’t they?
Definitely. Things are really different.
That hasn’t been my experience. And I used to do the same thing for years - using SQL to data mine forensic data. In fact, being able to use SQL and python to automate a complex reporting process provided me job security for about 3 years at another firm awhile back on some project we stole from EY. We were a small firm so we couldn’t throw a dozen consultants at it for very long so it really freed us up to do what we do best - create elaborate PowerPoint decks showing how much value we were creating!
What I’ve observed is that people at consulting firms (including myself) tend to get “fired” or “counselled out” if they somehow get “orphaned” from their practice and can’t maintain their bill rate. That’s sort of what happened to me at my last firm. I actually created a series of threads about my experience there over about 4-5 years.
I guess one thing that surprised me was how much scrutiny clients seemed to apply to relatively cheap resources who do the actual work. Meanwhile I was often the most expensive resource on my team and I’m mostly just putting together management reports. In fact, so much upper management seems to just be talking about projects people are working on in abstract. That was where I sometimes got in trouble because I would be off actually making sure a project was delivered instead of, I don’t know, just bullshiting about whatever is going on I guess.
I think what ultimately got me shown the door was generally not being as work-focused as they’d have liked; I tended to balk at last minute engagements, unexpected and unplanned late nights, and unexpected/unplanned holiday work.
They had this idea like it was good to have eight hours a work every day over the Christmas holidays and to work the day after Thanksgiving, and that I was somehow ungrateful or not a team player to want to spend that with my family instead of working. I think had I started that job right out of college that would have been one thing. But I’d had about six years of work experience and graduate school before starting there, and I wasn’t really cut out to be a consultant.
The whole calling them out for being unethical was just the final impetus to get rid of me.
That’s pretty typical business structure where the specific tasks and outcome are not clearly specifiable and the time/effort to accomplish is variable and not easily defined. All of those layers up the chain of command have to make their income somehow, and the billing item is work done on a the project. It’s all part of overhead for the company. Admin staff, janitors, etc all have to be paid somehow, and revenue comes from clients.
At one time our contracts with the government were like that - level of effort. We were direct support to our fed bosses and did whatever work they had.
At some point the government drove us to fixed deliverable contracts. That worked okay when we defined deliverables like hardware and associated records, procedures for operations, etc. It’s harder for supporting tasks like on-orbit operations where the role is to be present to answer questions or review data realtime.
Billing clients for time worked is a reasonable method in principle. However, any system of billing has means due unethical people to cheat. Billing by the hour is particularly open to being cheated because tasks that are billable can be fudged or worked slowly. Paying by some result, whatever can be defined, is cleaner in that respect.
Our particular scam was to add in a lot of questionably necessary documentation and the work to create that documentation. The engagement for my small group might be to get hold of their financial system databases and dig out the pertinent financial data. We might spend 2/3 of our time doing the actual work, and 1/3 doing stuff like reformatting all the SQL code to conform to our coding standards, literally printing all the code and putting it in binders, and burning CD-Rs of the actual code itself to accompany the binders.
That’s why finding a tool(SQLInform if you care) was such a big deal. What took hours and days crunched down to literally a few seconds at most. And was more consistent, better looking, etc… but not billable. I also felt like we could have just burned the CDs and left it at that; printing it out on paper seemed extremely sketchy to me in the context of hourly billing.
But when you’re in that circle of @msmith537’s executives and consultants, that’s how the game’s played, I suppose.
Welcome to the meeting-industrial complex. Where no one actually does any work. We just talk about the work being done.
Yeah, I’ve seen that in the engineering world. Hell, for a while I held one of those completely pointless and redundant jobs that involve attending meetings but never doing anything with the info received. It took a while for them to finally decide the job was completely worthless. To their credit, they actually did determine that, and more importantly, didn’t decide that I was worthless along with it.
Of course there could be other, purely domestic reasons for that, like a widespread sense that capitalism ain’t performing so good.