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FinnesseGod, what's your opinion? Comment below:

Given that this was a clearly biased video, I'd like to take a moment to play the devil's advocate in some of these situations. 

Cultural Lifestyle

  • Hours - the quoted hours in the video was ~80 hours / week, which is the highest of the high end seen in consulting industries, it's far more accurate to say that the average hours worked is ~50-55 hours with the exception being restructuring and turnaround consulting or generalists staffed on Private Equity Due Diligence work. 
  • Pay - while it's true that the starting salaries can be lucrative, this should be taken with a grain of salt because the salaries quoted were for the top consulting firms in the world and for the US market only. As someone in Canada, boy is this country underpaid in comparison and other mid or small-sized consultancies offer all-in US compensation packages of ~$70-80k (Mercer for instance). 
  • Lifestyle - one overlooked factor is that consultants work more predictable hours than other high-finance careers and based on the office/region, could travel to other locations for client-site work. The Consulting Industry itself has a greater emphasis on lifestyle and work-life balance by having no work on weekends and frequent team socials (both a pro & a con based on who you ask). 

The Systemic Hiring and Promotion

  • Hiring out of University - it's been proven time and time again in the existing consulting books that working in a consulting firm where you quite literally do the work of the industry professionals for a breadth of industries gives insights into different specializations (supply chain optimization, topline growth in CPG, PIPE deals within TMT, etc.). As proof of this, one of the most common exit ops for consultants is to join the client firms that literally benefited from their work.
  • Up & Out Approach - I would argue that every industry, with few exceptions, is triangle shaped which means they expect a churn of staff from junior positions. Much like Investment Banking, most consultants leave the industry because the lifestyle wears them down. Many Consultants either grow disillusioned in the work because they cannot stay to the execution of their recommendations, they find that they would prefer a different type of work (like choosing a technical specialization) or they would rather work in the client side with greater pay and better lifestyle. For those that are forced out, they could be (and often are) lower performers who may not enjoy the work or may not have the aptitude (both from the technical and political side). 
  • Management Consulting Experience - Now, one key crux of the video was to blame consulting firms from select cases that did not pan out, the first correction to address is how consultants have no stake in the outcome. Although they are third-party observers, they value retention of clients, if they deliver a recommendation that is adopted, they receive repeat service, which in turn helps grow their brand/showcase their skillset. The second, looking at an aggregation of the dollars spent on consultants without understanding any of what was delivered, what the assumptions, drivers, or recommendations actually were, and what the client management's incentives or priorities were is just egregiously portraying consulting firms in bad light without the full context. 

Are consulting firms saints? God no, McKinsey had a hand in the opioid crisis by helping the market for the Pharma companies, all of the Big 4 firms have had scandals across the board and a case can be made that Bain's go-to strategy for PE DD is to cut staff. But showing a biased view without understanding the good or value created by these firms have done is like looking at 9/11 and blaming all airlines and airports for having lax security policies. Sure, I'm not saying the negatives don't exist, they very much do, but the positives can't simply be ignored. 

Also, I love this quote that's always thrown around, "taxpayer's money", as if your 20% paid on a ~$80k salary, distributed to a number of services with many ~0.0001% paid to these consulting firms has a huge magnitude of impact. Instead of blaming consulting firms for contracting with governments, why not question or scrutinize the politicians for not developing in-house capabilities to perform said services themselves? This whole notion that the private sector that is profit-driven is the downfall of society just ignores the fact the world is not black or white but differing shades of grey.  Perhaps the $1.3B was expensive, perhaps it also included the opportunity cost to hire, equip and train contract workers or FTE workers for the projects at hand. Perhaps the consultants were overpaid or perhaps that money may have been squandered differently. It's not as clear-cut to say "Consultants Bad, People Good" rather read beyond the headline to understand what actually ended up happening. Were the partners leading those engagements kicked out of the firm for mismanagement, was the government scrutinized after the fact for their involvement or were there no ramifications at all? 

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Xhamster02, what's your opinion? Comment below:

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