RX Consulting
There’s been a ton of activity on this site about restructuring consulting recently. Lots of people asking for advice on how to break in, what are the exits like, what is the comp, what does the ‘prestige’ landscape look like, etc.. As a response, there’s been a plethora of replies from people who are not in the industry, but speak with a sense of authority on the matter. Don’t listen to these idiots. And if you are these idiots, just stop lmao you don’t know anything and you’re confusing the people who are trying to learn
Maybe it would be good to have a thread discussing the biggest misconceptions.
I can add one to start, exits. Lots of speculation from folks on exits. I am still connected with most of my consultant class on linkedin and i took a gander through. This is for FTI:
FTI - 38%, mostly now as MDs or SMDs. Other corporate roles - 14% Corporate finance (ie FP&A, CFO etc) -13% Other - 9% Other RX Consulting - 6% Private equity - 6% Non-MBB Consulting - 5% Real Estate PE - 3% Private credit - 2% Law - 2% MBB - 1% Investment Banking - 1% Hedge Fund - 1%
This might be one of the most helpful things I've seen on the topic on here. Just to make sure that I'm reading it right...the percentages are related to exits right? For example 6% exited to other RX consulting?
Also, is this adjusted for application numbers? Like only 1% of your consultant class exited to HF / IB, but there was a very high success rate (those who tried to make the jump more likely made it than not)?
Might be a reach but would be amazing if someone had the data for A&M / Alix as well
This is just “where are they today” looking through my Linkedin. %s are % of the whole group which is why i included those still at FTI.
No idea on application numbers or anything.
Excellent idea. Will try and compile similar list tomorrow and post here.
Same here, although less hair on my chest and smaller data points
For Ankura:
At other RX firms - 28%
Still with Ankura - 27%
IB - 12%
Corp Fin (includes CFO, CEO, FP&A type roles) -7%
PE - 7%
Corporate Banking - 5%
Private Credit - 5%
Non RX consulting (excl. MBB) - 3%
Law school - 3%
T10 MBA - 2%
MBB - 2%
Tallied up ex-FTI from my end, and here's what the results were:
Note that these aren't 100% accurate due to LinkedIn doubling down ; ex: a director in PE would come up for both a director and Private equity search, and if they're a director in PE but just mention "director" in their profile, it won't register for a "PE" search, so in all likelihood these numbers are understated
Total # of RX consulting profiles looked at : 925
Still at FTI: 23%
of the remaining profiles that aren't still at FTI
IB: 3%
CEO / CFO: 10% (for comparison, McKinsey was 6.82%, when looking at 65k former McK consultants)
Director / MD (at other RX consulting / PE firms / IB): 26%
Founder: 1%
PE: 3%
Private credit: 2%
MBB: 0.98%
Some notes: there's a fair amount of PE / IB folks hidden in the Director / MD category, and I didn't have the time nor the resources to go digging in and adjusting the data. Those people weren't included in the IB / PE categories, so those two are likely understated. Also, this is for just RX consulting, not all people who exited from FTI. That's why the percentages are messed up. There's over 54% missing from the ex-FTI people who are no longer at FTI, and my guess is that they're in 1) other RX consulting 2) CFO / CEO roles 3) IB / PE.
I've worked on RX Consulting engagements and am currently interviewing for a few roles and I too have been pretty surprised at how many people on WSO are suddenly curious about it. I really like the work, but I actually enjoy financial modeling/accounting to a large extent. I don't think a lot of people here really understand how accounting-intensive the work can be and that it's a lot more "in the weeds" than a strategy role or something like that. A&M (maybe Alix too?) pays exceptionally well, but you're also going to be cranking extremely hard if you get that bonus check. Outside of a few of these firms, it pays well by normal standards, but it's not close to IB/PE and it's still a stressful job.
A lot of my day-to-day work, outside of the 3-statement/13 week cash flow was digging through GL details, understanding/fixing financials based on my understanding of technical accounting, coordinating requests from auditors, etc. Maybe this was just my firm/engagement, but IME it's a very corporate finance heavy job, especially when you get to the "steady state" of the engagement, which is why I doubt it's a good fit for most of the people on this forum.
I think a theory that partially explains the rising interest is that most of these interested people are undergrads, and their goal is to break into RX IB / PE, and they see RX consulting as an avenue to do that. Which would make sense, there's a fair amount of relevance in the work RX consultants do when compared to RX IB, but you're still going to need a lot of execution and putting in the work, and some amount of luck to make the jump, given how few RX IB seats open up. But it also doesn't make sense, because you don't really get into RX consulting hoping to exit into RX IB...you could do M&A or something and do that as well, and the majority of RX IB classes are from the latter group.
Also, were you on primarily on debtor side engagements? I used to do primarily creditor when I was in RX consulting, and accounting work was very rare, around 5 - 15% of the work I'd do would be related to accounting. Around 90% was financial diligence & modeling, building recovery waterfalls to estimate how much each class of creditors might get in various scenarios, cap structure analysis, and if we hired external valuation firms (for larger restructurings (HL, PJT, Evercore etc)), we'd be vetting / benchmarking their work, and if not, we'd be creating our own valuation models.
To the comp point, I feel like there's a fair amount of RX consulting firms that are at least comparable to traditional IB comp, especially at more specialized firms, assuming IB associates make 275-400k all in, VPs 500-600k all in, directors 600-800k all in etc, and RX consulting pay is going to go up in the future, I predict. Compared to EBs though, you're right, there aren't a whole lot of consultancies that beat those figures. It's still a better value prop for more financially oriented people than MBB, but at that point just go out for IB.
Debtor-side is very different... we like to say it's more of the swiss-army knife of finance. Turning around a company requires cap structure insight (i.e., is this business properly capitalized? Can we get an equity infusion?), general liquidity modeling (i.e., how much will we burn until breakeven, as this is the "plug" for new equity/financing), and of course, performance improvement/operational execution is uber important.
You run into basic situations (e.g., retailer has underperforming stores - let's liquidate them, negotiate with the landlord on a payment plan to shed the lease, and get our vendors on board with extending credit & terms to assist in the turnaround), but you also run into absurd/flat-out weird situations (e.g., fraud, family issues, etc.) that require a mix of all skills. The biggest issue on debtor-side work - will the company actually implement the recommended changes? If they don't implement your advice, you do not get the necessary feedback loop to know whether or not you were even right, which means you're not becoming a better turnaround consultant. Sometimes, when you get the interim management role, it'll fall on you to execute. But often, management stays in place (they shouldn't) and your suggestions are thrown into the garbage.
I've only worked on one creditor side engagement, and it pretty much mirrored what you said. I think this is why anyone who works on creditor side engagement will surprisingly have "better" exit ops (i.e., investing role or RX IB). At face value, debtor side is a lot more fun, but it really molds you to be a crisis manager / possible C-suite.
I have been mostly on debtor side - that's a good callout. There's a lot of traditional corp fin/accounting work on this side because we're essentially taking over the finance function, in addition to being a strategic/business advisor. I really enjoyed it because it's extremely tactical and I was basically spending all of my time quantifying different strategies/scenarios and understanding how to best capitalize the company while also balancing the creditors' motivations and trying to factor in what they'd reasonably be OK with. Once you build out that business plan, however, the work does become more like a traditional Corp Fin job since you have weekly/monthly/quarterly reporting cycles to your Stakeholders as well as some random ad-hoc analyses/commentary you have to build to explain why we are or are not tracking toward the plan that was built and how to pivot if not.
Never really done creditor work, but is it true that really leads to better exits? I've always thought that debtor side work is seen as more "prestigious" within RX and some of the knocks I hear on FTI is that they're a step below A&M/Alix because they do more creditor/UCC work than the other 2.
Any thoughts on uzzi and lall? Appreciate very new but wondering if the founders have any particular rep/cache
Not interested in exit opps to PE / HF investing role, other than maybe PE portco ops improvement.
I like the boutique vibe they have and the large type of work remit rather than just silos.
Am interested in this too; looking at their site, the founders have had experience on some of the biggest restructurings, including Lehman, American Airlines, Sprint, TXU Energy & United. Definitely not lacking in talent. I'd say the issue is that they were founded in 2024, so it's too early to form conclusions on what they'll be like in the future. If we're going off talent though, they're great.
If you're thinking of working with them, it's a gamble I guess. On one hand their dealflow could absolutely take off, on the other hand it could tank. No idea which way it'll go.
Just curious, why would someone even want to move from RX Consulting to RX Banking? Isn't RX Consulting supposed to be the exit?
Yes. I don’t know why - I sure as hell wouldn’t, personally.
Curious about how Big 4 staff/seniors fare in terms of breaking in? I know that this depends on firm and region, but with RX being more heavily accounting focused than other paths I assume Big4 exits into T1 RX are not extremely uncommon. I live in a T2 city and hear of Big4 friends/past colleagues speaking on co-workers making the jump. Is this the case in other T2's and T1 cities assuming that audit/advisory -> T1/2 associate is the path?
If able to expand, how have you seen Big4 -> RX perform on the job considering the nature of it is quite different? TIA!
have seen big 4 rx-> eb rx ib even so would say its pretty doable. rx remains a pretty small world
I am a former big 4 auditor - it’s not easy, but doable. Really had to study modeling and bankruptcy code to break in. And I think I showed a genuine interest in the space.
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