With all the high fees they receive for engagements even with smaller firms, I'd assume they'd at least a little more than IB. Is it why there's a high turnover in consulting as compared to IB (because they're not compensated well)?
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Consulting firms charge by billable hours like law firms. The fees are not in the same league as the success fees banks get from advisory/placement work.
I dont understand why people still want to work 60 hour weeks when they could make a lot more in high finance such as IB and AM
Oh I don't know.. a totally different business model perhaps?
Depends on the firm because I know A&M has uncapped bonus structure where I've heard of people get up to 4x-5x base salary bonuses.
This is true. Other restructuring consultancies (Alix and FTI) also have a similar model in place altough at a smaller scale.
Consulting is people heavy & compared to IB, has low profit margins.
Banking is people light & compared to consulting, has high profit margins.
I'm sure you can do the math.
It has to do with fee scalability. With consulting and billable hours, you have a cap as to how much $ per hour you can contribute to your firm so bonuses have a lower ceiling. With banking, fees are based on transaction size and % fee cut instead of hours worked so there's a much higher earnings ceiling.
Bankers work far more hours than consultants
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