What does a consultant do anyway?

If you’ve been wondering what a consultant does, here’s a joke you might enjoy. 

A physician, a civil engineer and a consultant walked into a bar together, arguing about which was the world’s oldest profession. The physician made his case first. “Well, the Bible says that God created Eve from a rib taken out of Adam. This clearly required surgery, so we can rightly claim that mine is the oldest profession in the world.”

The civil engineer disagreed, saying, “But even earlier, in the book of Genesis, it states that God created the heavens and earth out of the chaos. This was the first and certainly the most spectacular application of civil engineering. Therefore, my dear doctor, your theory is interesting but full of holes. Civil engineering is clearly the oldest profession in the world.”

They turned to the consultant with a sneer and asked, “And you? What does a consultant do anyway?”

The consultant ordered another drink, smiled, and said in a soft voice, “Who do you think created the chaos?”

Of course, that was a joke. If all that consultants did was to cause chaos, then it would be a dying or dead profession. But they say that all jokes have an element of truth, and so does this one. In today’s world, consultants often help their clients navigate chaos. In a world where technology, ways of working, paradigms and business requirements are in a dynamic flux, a consultant’s work could also create temporary chaos as he helps his client migrate from an older technology to a newer one.

What does a consultant do anyway?

Most people think of management consultants when they hear the word consultant but to be precise, anyone who offers specialized knowledge to another person, company or institution for a fee is a consultant. The key difference between a consultant and an employee is the terms of employment and its duration. Employees are paid salaries with various benefits, while a consultant charges a daily rate.

But we still haven’t answered the question: what does a consultant do? Almost any area of expertise can have specialists, people with years of experience, insights, knowledge or even just extensive insider contacts, who decide to monetize the special and rare value they bring. Such people transit from being salaried employees to fee-charging consultants.

Some of the current areas of consulting include —

• Business transformation consultants, who midwife technological, process or purpose change within an organization;
• Engineering consultants, who provide services related to engineering such as design, technology, operation, drawings and specifications, quality assurance and recommendations; 
• Human resources consultants, whose expertise is finding and recruiting the right people for the right job;
• Immigration consultants, who take over the headache of legal and other procedures that come with immigration from one country to another;
• Internet consultants, who know all about the rapidly evolving world of web design, search engine optimization and emerging technologies, and can help clients get the very best value for money from their online capabilities;
• Marketing consultants who, as their name suggests, are sought after for their advice and strategies on how to successfully sell products;
• Process consultants, who are experts in creating or improving industry-specific operational processes. Such consultants specialize not only in a particular industry but also in a specific process;
• Public relations or PR consultants, who help ensure that their client has a well-loved, positive and inspiring image in public or with the government. PR consultants are often engaged for long terms and usually offer their services as an entity, such as a PR agency;
• Property consultants advise investors to guide buyers or sellers of property through the pros and cons of real estate dealings;
• Strategy consultants, a specialized breed, not only have specific and detailed knowledge about all the stages of a process but also bring a strategic mind to crafting an approach unique to the client’s particular task or situation.

Consultants can be even more specialized. Harvey Weinstein, the billionaire Hollywood mogul indicted with multiple criminal rape charges, realizing that he faced a lifetime in jail, hired a prison consultant to advise him on how to survive in a rough and brutal environment. A literary agent is a kind of consultant too, advising an author on every step of the book-creation process.

Does a consultant earn well?

The short answer has three letters: Y-E-S. A major online portal which trains people in various consulting skills provides an interesting window into how much a consultant could earn. Out of about 10,000 students trained by the site, 27 have broken the million-dollar mark in their annual earnings, 461 have crossed six figures and 4,513 have quit their jobs to consult full-time. 

Another way to get a ballpark estimate is to search Glassdoor, Payscale and Indeed, three major salary tracking companies, for jobs whose title includes the word ‘consultant’. This reveals an average consulting salary of around $75,000 per year. 

It’s worth mentioning here that the average is not a specially useful measure since it can be skewed by a single very high or very low value, but it still yields one point of comparison. An average salary of $75,000 may sound disappointing to you but it’s actually quite high for an average. The white-collar professional’s average salary, for instance, is only $63,076. 

As a consultant, you’d probably earn more than you did as a salaried employee. One tongue-in-cheek answer to What does a consultant do anyway? could be ‘He makes a lot of money’.

Another way to enumerate earnings might be to break consulting down into three broad categories, Management, Corporate and Independent consulting. We are most interested in Independent Consulting but since consulting areas often overlap, it is worth looking at all three. For example, you might be hired as an individual management consultant by the international consultancy firm of Deloitte or McKinsey.

Management consulting, arguably the most popular category, helps businesses do better by solving critical problems, managing transitions, processes and events, and finding more effective strategies for growth. It is a mark of the category’s popularity that there are globally reputed firms that specialize in management consultancies, such as McKinsey, Bain, and the Boston Consulting Group.

The average management consultant’s annual earnings are $92,867. With management consultancy firms, it is not surprising when someone who joined as an entry-level analyst earning about $70,000 annually climbs to become a junior partner pulling in $500-900 thousand or even crossing $1 million as a partner.

Corporate consulting is a vast domain; in fact, it’s the level most management consultants aspire to reach one day as they achieve specialization in specific fields such as IT, hoteliering. behaviour change, data security and so on.

The corporate consultant can expect to take in an annual average of $75,000, with 90% of salaries distributed between $46-110 thousand. You could also look at the top 10 corporate consulting categories, which include —

1. Management Consultant ($92,900)
2. Software Consultant ($78,800)
3. Financial Consultant ($76,400)
4. IT Consultant ($73,600)
5. Business Consultant ($72,900)
6. Environmental Consultant ($61,200)
7. Marketing Consultant ($54,000)
8. HR Consultant ($45,400)
9. Social Media Consultant ($45,200)
10. Healthcare Consultant ($42,000)

The floodgates really open when you start looking at a career as an Independent Consultant. There are no limits on the domain of consultancy, and the internet is an important marketplace for generating leads and new clients. According to recent data-based analyses, an Independent Consultant can earn $97,000, which is more than the highest-paid corporate consultant. How accurate is this?

Well, the numbers come from a consulting firm. We also know that nearly 20% of full-time independent consultants and contractors are currently earning six figures and above, with the top tier earning seven or eight-figure incomes.

Who’s a better consultant?

While expertise is key to being hired as a consultant, it’s difficult to overstate the importance of reputation in today’s competitive world. Reputation has two main parts: integrity and reliability. Of these, reliability is the easy one. A consultant who promises what he can deliver and delivers what he has promised is more likely to be called again than one who overstates his skills hoping to learn on the job, does not remain flexible and eventually is unable to meet his commitments. These pitfalls are easy to avoid and require only professional transparency and honesty.

1. Do not make any claims that cannot be independently verified by a third party.
2. Clearly state what falls outside your expertise, so that your client knows what to expect.

Integrity is a truly tricky one because while parts of it can be visible, such as refusing to take shortcuts or pay bribes, some parts may be between you and your inner voice.

It is common for independent consultants to take on more work than they can realistically manage because they are familiar with feast-or-famine modes of existence. When work floods in, they try and take on as much as possible. This creates certain temptations and your integrity is reflected in how you deal with them.

Conflicts of interest: What if you were faced with two plum consulting assignments that were in open conflict? You could take on both, since neither client would know about the other. Would you?

Overstating issues: Over time, clients learn to trust their consultants. At this point, it is easy to overstate problems and challenges, even unconsciously, since more problems mean more work for them.

Self-serving recommendations: A consultant who proposes remedial measures or next steps which can serve to extend his own consultancy might do better in the short run, but over time would be seen for his gamesmanship.

So I’d like to end this article with some suggestions for best practice for independent consultants.

How to be the best consultant

It’s not difficult. All it requires can be stated in a single sentence: put your client before yourself. Nothing ensures future success as that does. 

1. Create advantages for your client instead of bolstering your own business. 
2. Deliver what you promised. Finish within time and better still, within budget. When your client’s work improves because of your commitment, you’re in a great place. If you over-deliver but do not over-charge, you can be sure they’ll want you back.
3. Communicate honestly. Make straight talk your guiding principle from day one. Communicate setbacks as clearly as successes, acknowledge missteps and never talk down just because you have the expertise they lack. Explain your science rather than guard your expertise.
4. Encourage mutual respect. Don’t let yourself be taken for granted. If you’re kept waiting, draw attention to it. Your time may be paid for but it may not be wasted. 
5. Openly discuss problems. Bring up issues before they become problems and barriers. Don’t fuss about small overtime on the project but if you find that you’re time on the project has significantly exceeded the scope of work then alert the client early rather than late. Remember, honesty is uncomfortable and unexpected sometimes, but eventually, it is always appreciated. 
6. Clarify roles and responsibilities. This is a part of setting expectations. A client should know what to expect, when, how much and from whom. The most avoidable situations emerge when expectations have been left unclarified.
7. Don’t create dependency. Many consultants try to prolong their livelihood by making their clients dependent upon them. However, a client will appreciate it if your ultimate goal was to bring them to a point where they no longer need you. Sharing knowledge, building skills and expanding capacity are ways to do this.

I have a last tip that no book will give you — get yourself a good life. Being a consultant does not mean giving up all the other things that matter. So make time for yourself somewhere in the mad rush of learning skills, finding clients, completing projects and becoming successful. Remind yourself of the tongue-in-cheek definition of a consultant —

A consultant is a man who knows 99 ways to make love but has no girlfriend.