Economic consulting - Exit opps and hours?

Takanome's picture
Rank: Monkey | 43

Hello buddies !
I'd like to inform myself about this industry as we don't talk about it that much.
What would a graduate do working in firms like Oxera, or NERA ? Is it more competitive than IB ?
What about the hours/pay and of course the mighty exit opps ?

Thanks ! :)

Comments (51)

Apr 23, 2012

Interested playa.

Apr 23, 2012

Not more competitive than IB, but a different group of people.

At my school, the people who ended up getting offers and going to economic consulting were the kids who wrote Econ theses, TAed classes, and a lot either double-majored or minored in math.

The ones who went into IB may also have done math, or Comp Sci, or nothing else...but were definitely less "involved" in the economics department, saw econ as a means to an end, not what they wanted their career in.

Apr 23, 2012

Definitely less competitive than IB and management consulting.

Most people use it for Econ grad programs or law school. I think the hours were ~60 per week, some light travel. Most of the people I saw going to these firms were either (a) people that were rejected by management consulting firms (b) people going to grad school who wanted some work experience or (c) people who hadn't thought about job searches until senior year and were applying everywhere.

I don't mean to run down the industry- its a good job- but they have an awful time recruiting. I have never heard of it being somebody's first choice.

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Apr 23, 2012

One thing I've heard - not 100% sure if it's accurate - is that the rigor of analysis done in Econ consulting is way beyond that of MBB or iBanking. This tends to give economics consultants an amazing quant background applicable to a bunch of situations.

Remember, MBB analysis really just needs to pass the sniff test from managers. Lots of fuzzy thinking goes on in MBB. (That's not necessarily bad - judgment and intuition do count for something, but the point stands.)

On the other hand, econ consulting work needs to stand up to cross-examination in court. Think about having a bunch of people smarter than you trying to disprove every piece of analysis you provide. That means the that the rigor of the work needs to be much higher.

Apr 23, 2012
anonymouse393:

One thing I've heard - not 100% sure if it's accurate - is that the rigor of analysis done in Econ consulting is way beyond that of MBB or iBanking. This tends to give economics consultants an amazing quant background applicable to a bunch of situations.

Remember, MBB analysis really just needs to pass the sniff test from managers. Lots of fuzzy thinking goes on in MBB. (That's not necessarily bad - judgment and intuition do count for something, but the point stands.)

On the other hand, econ consulting work needs to stand up to cross-examination in court. Think about having a bunch of people smarter than you trying to disprove every piece of analysis you provide. That means the that the rigor of the work needs to be much higher.

100% true about the rigor. a lot of the analysis is very math and econometric heavy since the experts for the cases all have phds in econ or math. in addition, everything we do has to be reproduced for another econ consulting firm hired by the other side whose job is to find all the flaws/mistakes. so you can imagine the level of precision and attention to detail that goes into producing these reports.

i think you can say some people in econ consulting would rather be at a MBB (myself included), but i don't think many of us actually wants to do banking.

Apr 24, 2012

I agree the analysis tends to be more sophisticated (from talking to my friends at MBB and in banking). They might run a single watered-down regression here or there, whereas I actually do more complicated models than I learned in econometrics. Our analyses don't have to be dumbed down for clients in the same way MBB's might. I'm also about 20 more times likely to open SAS at work than PowerPoint.

Also, the people that want to work in econ consulting are definitely different than those at work in management consulting or banking. Nerdier, more interested in school, and more likely to not want to wear a suit to work. I would say most people at econ firms probably wouldn't get an offer from MBB (simply as a matter of probability) but all would get interviews. My firm seems to have a decent number of people coming from/going to MBB, so there is obviously some overlap in the subsets of applicants.

Apr 25, 2012

Thanks for your answers !
For those who actually work in the industry, could you give me an overview of the typical problematics you encounter ? What do you actually do and for whom ?
What about the pay/hours ?
Thanks again ! :)

Apr 25, 2012
Takanome:

Thanks for your answers !
For those who actually work in the industry, could you give me an overview of the typical problematics you encounter ? What do you actually do and for whom ?
What about the pay/hours ?
Thanks again ! :)

Did some work at an econ consulting firm. Pay is about average after you graduate college, think around USD50k. Hours are decent, 8.30-6 being a fairly typical day with minimal weekend work. Mind you I was doing a lot of market intelligence stuff in oi & gas, so given that our clients were middle east based, even client interactions/clarifications/meet ups were not too common.

Typical problems? Your economic modelling fucks up. Be good at handling excel, pivot tables, manipulating the model which your firm will inevitably have, having purchased data from a place like GI (global insight).

Oct 16, 2018

I worked in IP econ consulting this summer for a decently known and Vault-ranked firm. Basically, if you see "Company X sues company Y for $300M for violating patent" the job was coming up with that number. The main task to be accomplished was researching to understand the cause and effects of patented features, constructing a model based on available data points to use, and then inputting variables into the model to estimate damages claims.

Pay for undergrads was $65K in high COL areas. Not great. Hours were normally easy, though, like 9-5 and leaving 1pm Fridays most weeks, sometimes less sometimes more based on how many deadlines were approaching. I did not see strong exit ops and career progression seemed slow.

Apr 26, 2012

Typical clients: fortune 500, United States, state governments

We are hired to provide analysis and testimony as to the economics behind a certain argument: what damages should be, whether price fixing occurred, why a group of plaintiffs should or should not be certified as a class, why a regulation or law should or should not be implemented, why a merger should or should not be permitted, etc.

Compensation is between 80 and 100 all in. This is probably higher than average. Average might be 70-85? Nobody respectable firm pays less than 60k base, so don't listen to bbjhva. I average about 45-50 hours, but occasionally work 80+.

Apr 26, 2012
notinfinance:

Typical clients: fortune 500, United States, state governments

We are hired to provide analysis and testimony as to the economics behind a certain argument: what damages should be, whether price fixing occurred, why a group of plaintiffs should or should not be certified as a class, why a regulation or law should or should not be implemented, why a merger should or should not be permitted, etc.

Compensation is between 80 and 100 all in. This is probably higher than average. Average might be 70-85? Nobody respectable firm pays less than 60k base, so don't listen to bbjhva. I average about 45-50 hours, but occasionally work 80+.

What's your background? Do you have a Masters? My comp details were straight out of ugrad...and they were real. So "dont listen to bbjhva", sure, but those were facts.

Apr 26, 2012

im at an econ consulting firm coming straight from undergrad and i can confirm notinfinance's numbers. although at my firm is more like 80k - 90k. no reputable firm is going to attract any talent paying 50k a year

Apr 26, 2012

Wait...
You make 80-90k straight out of undergrad ?
So why graduates go into IBD instead of economic consulting since it appears to be a much more interesting job with the same pay and decent hours ?
I mean where's the downside ?

Nov 29, 2017

It's not the same exist strat either, IBD peeps are quite different people. I've always found econ consultants to be more on the nerdy side who wants to go deeper in econ problems. I find it more interesting than my previous gigs in IBD or regular consulting, but I know most people are more interested in doing a larger array of topics, or delve more into other aspects of finance/IBD.

Apr 26, 2012

it's not the same pay as banking. i dont work in banking but i thought it's more like 100k - 140k all in

Apr 26, 2012

Exactly. 80k-90k straight out of ugrad? My "all in" was 57k (pre-tax, of course) or so at that econ consulting firm...yours was 80k-90k? Something sounds off.

Apr 26, 2012

I work at one of the top firms (Cornerstone, AG, Brattle, NERA, etc) and the base for first year analysts is now (probably) 65k + ~10% end of year bonus. I don't know where people are getting 80-100, that's insane. Go to glassdoor.com to check more salaries.

50k seems low, but I guess that can be reasonable at a smaller place.

Apr 26, 2012

we get paid for overtime. so 60k base + ~15k overtime + 10-15% bonus ~ 82k. of course your overtime pay depends on workflow but these are the figures for my office this year. i have also heard of stories at our other offices where the most staffed analysts get over 100k because of overtime.

Apr 27, 2012
swordfish24:

we get paid for overtime. so 60k base + ~15k overtime + 10-15% bonus ~ 82k. of course your overtime pay depends on workflow but these are the figures for my office this year. i have also heard of stories at our other offices where the most staffed analysts get over 100k because of overtime.

Not all firms pay bonuses as if it was overtime. LECG used to do this. Berkeley Research Group might.

Apr 26, 2012

I think we may just have discovered another 'big bucks' industry for ugrads to join, haha.

Admittedly, mine was a boutique econ consulting firm.

Apr 26, 2012
  1. I came straight out of undergrad
  2. I was including sign on in my "all in" figure
  3. My firm pays better than most. I had multiple offers from top firms, so I have a good idea of how my compensation compares.

Of course, I gave a range. I realistically expect to make 90-95 in the first year, but most of the bonus figured into that has been realized at this point.

In absolute terms, we make much less than bankers. On an hourly basis, we make more. Banking and economic consulting are highly dissimilar and attract very different applicants, so it's unfair to ask why all bankers don't go into econ consulting.

Apr 27, 2012

Okay good thanks for your inputs, it does help !
But I am actually more interested in firms in Europe especially London, any feedback about it ?
What about the career progression ? One reason people are aiming IB is exit opps, so what do you next ?

Apr 27, 2012

Comp is highly variable in this industry, but can be quite good. I spent 5 years in econ consulting pre-b-school, at two firms. The first was a big "brand name" firm where comp was mediocre. First year out of ugrad I think I was at ~60k + 5k overtime + 5k bonus =70. When I switched to a boutique firm my comp basically doubled, so my 3rd year out of ugrad I was at 140k all-in, which I think is comparable with most banking analysts, but probably at the top of market for econ shops. So it totally depends on the firm, type of work, attitudes of the experts, etc. I loved this industry; feel better prepared than almost any of my peers at top 5 MBA in terms of modelling, valuation, and stats. Recruiting was quite smooth from this industry, but I don't think I could have made a major transition without the MBA.

BTW, I totally disagree that this industry is less competitive than management consulting. Probably easier to break in than bulge banking, but definitely not MC. The top firms will be extremely selective, and I've seen my old firm turn a lot of people away who had offers (or were in late stage recruiting) for MBB. I think the two industries are just looking for different qualities in an analyst.

Apr 28, 2012
jankynoname:

Comp is highly variable in this industry, but can be quite good. I spent 5 years in econ consulting pre-b-school, at two firms. The first was a big "brand name" firm where comp was mediocre. First year out of ugrad I think I was at ~60k + 5k overtime + 5k bonus =70. When I switched to a boutique firm my comp basically doubled, so my 3rd year out of ugrad I was at 140k all-in, which I think is comparable with most banking analysts, but probably at the top of market for econ shops. So it totally depends on the firm, type of work, attitudes of the experts, etc. I loved this industry; feel better prepared than almost any of my peers at top 5 MBA in terms of modelling, valuation, and stats. Recruiting was quite smooth from this industry, but I don't think I could have made a major transition without the MBA.

BTW, I totally disagree that this industry is less competitive than management consulting. Probably easier to break in than bulge banking, but definitely not MC. The top firms will be extremely selective, and I've seen my old firm turn a lot of people away who had offers (or were in late stage recruiting) for MBB. I think the two industries are just looking for different qualities in an analyst.

Why did you go for an MBA instead of a PhD ? It seems more relevant to me to stay in this industry.

Apr 29, 2012
Takanome:
jankynoname:

Comp is highly variable in this industry, but can be quite good. I spent 5 years in econ consulting pre-b-school, at two firms. The first was a big "brand name" firm where comp was mediocre. First year out of ugrad I think I was at ~60k + 5k overtime + 5k bonus =70. When I switched to a boutique firm my comp basically doubled, so my 3rd year out of ugrad I was at 140k all-in, which I think is comparable with most banking analysts, but probably at the top of market for econ shops. So it totally depends on the firm, type of work, attitudes of the experts, etc. I loved this industry; feel better prepared than almost any of my peers at top 5 MBA in terms of modelling, valuation, and stats. Recruiting was quite smooth from this industry, but I don't think I could have made a major transition without the MBA.

BTW, I totally disagree that this industry is less competitive than management consulting. Probably easier to break in than bulge banking, but definitely not MC. The top firms will be extremely selective, and I've seen my old firm turn a lot of people away who had offers (or were in late stage recruiting) for MBB. I think the two industries are just looking for different qualities in an analyst.

Why did you go for an MBA instead of a PhD ? It seems more relevant to me to stay in this industry.

Yeah, PhD would definitely be the way to go if you want to stay in econ consulting long-term. Most expert witnesses will have a PhD in finance or economics, and have some significant publications. In my case, I was trying to switch into a buyside equity research role, so I felt the MBA would offer the best recruiting possibilities for that transition, which I've found to be true. If I could do it over again I would do the pre-MBA period exactly the same... I think econ consulting arms you with a great skillset for basically anything in finance. Best of luck!

Oct 5, 2016

Ec consulting is definitely competitive, but management consulting is simply more competitive, especially at MBB level.

Casey Colucci

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May 1, 2012

Thanks ! :)
Would'nt it been more logical to switch to FICC research than equity research given your economics background ?
Or were you more drawn to equities ?

Oct 5, 2016

I'd say Cornerstone is typically considered one of the best, but by no means the best. The culture would vary greatly from office to office and from practice to practice. People in all of these firms are generally of pretty high intellectual caliber (though if you end up interviewing, you should definitely pay attention to their personalities too). For junior staff positions, the main difference is that some firms would have you assigned to a team or a practice, while at others you'll be more or less part of the overall analyst pool. That can either be good if you want to try lots of different things, or it could be bad if you have strong preferences about the types of cases you'd like to work on.

Oct 5, 2016

One difference is the type of work they do. Cornerstone, for example, only really plays in litigation, while firms such as Analysis Group and CRA will do more traditional strategy work using economic modeling, etc.

Oct 5, 2016

Yeah, but do they? I know everyone always points this out as a differentiator between CRA/AG and other econ firms, but what is the truth behind this? Obviously the bread and butter of these two firms is still litigation work. What kinds of "strategy" projects do they get? Why do they get them (as in, why do the clients pick them over firms that actually specialize in business consulting). What percent of their business do these projects represent? And furthermore, why do only AG and CRA bid for these types of projects? If these are good opportunities, why don't you see firms like Cornerstone, Compass Lexecon, and NERA bidding as well? You could argue that Compass Lexecon and NERA are more academic and have very few MBAs as opposed to CRA and AG, but Cornerstone hires MBAs.

To be clear, we are excluding Marakon from CRA, right? They operate pretty independently and don't cross staff, so it wouldn't make sense to lump Marakon projects in with CRA.

To me, it seems like this is more of a cute talking point for these firms during recruitment than reality. However, there is a good chance I'm talking out of my butt. Anyone from either of these firms have any insight?

Oct 5, 2016

To answer the original poster's question: cultures vary widely between offices and practice groups within firms. I don't know if you could say the quality of one firm's work is consistently better than another's, again because this may vary across office and practice group within a firm.

However, for fun I will give you tiers. Take this with a grain of salt as it is based on 1. My experiences interviewing at these firms (biased) 2. The people I know that work at these firms (small sample size) and 3. What I hear from my bosses.

Tier 1 - NERA, Cornerstone, Compass Lexecon, Analysis
Tier 2 - Brattle, CRA, Bates White, Berkeley Research
Tier 3 - boutiques

Oct 5, 2016

I know AG/CRA like to claim that they get strategy projects but the vast majority of them are still litigation cases. Even then, I doubt that all of their offices even have strategy practices. We have several former Analysis Group people at my firm and none of them ever worked on a strategy case. Yes, you might be able to develop a different skill set if you worked on those types of cases (depending on what you are actually doing) but that should not be a major factor in your decision making process.

Different firms are good at different practice areas and I think it's much more beneficial to look at the types of project that particular office does rather than what firm it is. If you want to do securities or finance projects but the office you are interviewing for only does intellectual property or anti-trust, then you probably wouldn't be happy there, no matter which firm it is.

If you really cared about the rankings, notinfinance's tiers are about right.

Oct 5, 2016

I have a few questions about Economic Consulting firms.

  1. How competitive in recruiting? What sort of schools do they recruit at?
  2. How do they fare in B School admissions?
  3. How is analyst pay?

Thanks.

Oct 5, 2016

While we're on the subject I have an interview at one of these EC shops coming up and was curious as to what I could expect from the interview. Cases? Tough technicals? Mostly "fit" questions? I dont really have much knowledge of the industry so any insights that could prove useful would be greatly appreciated.

Oct 5, 2016

I had an offer with AG. My first round interview was a 2 on 1 interview, largely fit. They asked a few behavioral questions about quantitative projects. My office visit was a handful of 1 on 1 interviews with a mix of fit and easy cases. If you've taken an econometric course, definitely talk about that in your interviews.

Oct 5, 2016

@jameshetfield

  1. Fairly competitive, think top 25 US news schools. Probably less prestige obsessed than banks and MBB.
  2. well. Most experts at econ firms are professors at top schools and b-schools.
  3. Par with MBB assuming average utilization, plus or minus 10-15k depending on how much work you get. Bonuses are heavily tied to billable hours. In a slow year you're going to make a lot less (but that is also true in mgmt consulting and ibanking)
Oct 5, 2016

I'll throw some stuff out there since I interviewed with and got offers from multiple econ consulting firms and know a bunch of people that work in the industry. For the most part, they are all similar, though each has its specialties and differences. Public vs private, not really sure it affects anything as far as the analyst/associates go.

ie firms like CRA and NERA place analysts in specific practices (auctions, Antitrust etc.) and you work with generally the same small group of people in your practice area. On the other hand at other firms like AG and (I think) Cornerstone you are in a general analyst pool with more leeway as far as what types of projects you are assigned to and generally work with a larger range of people.
If you are specifically interested in a certain practice area, some are better than others. Ie Compass Lexecon and CRA are generally considered the top 2 firms for antitrust/competition work (and this is also the largest practice area at each firm). From what I've seen, AG gets a ton of work in the healthcare industry. This is also largely office dependent.

As far as culture, again the ones I experienced were fairly similar. Both Brattle and AG sell culture and "the people" really hard and it seems to be true. I'd say from my experience these two firms have/had the seemingly happiest people. Cornerstone has somewhat of a rep for not being the greatest place for analysts to work. Cornerstone did seem to be the most competitive (as far as getting interviews/offers) that I experienced though. Differs between practice areas as well.

Analyst pay is pretty similar at all the firms as well (in the ballpark of 65k+5k signing bonus type deal for an offer) so a notch below top management consulting firms but still good. From what I've seen and been told B-school admissions are all really good for the top tier firms. Top tier seems to be: Nera, CRA, Compass, AG, Cornerstone. Brattle is really good as well, but much smaller than than the other five.

Best Response
Oct 5, 2016

I work in economic consulting now and used to work at a different economic consulting firm. I also work with some post-MBA/PhD people who worked at various other firms as analyst, and I've also interviewed at all the places you mentioned plus some smaller ones, so I feel pretty comfortable talking about this.

In terms of culture/quality of people, I think that AG and Brattle are the best. Cornerstone is very good too but I don't think that the culture is as consistently good as the other two I mentioned. I do know that they recruit very early in the cycle. All three of these firms are private, which makes it easier for them to hire slowly and really focus on culture.

NERA/CRA/Compass are all either public or are subsidiaries of public companies and are therefore under more pressure to focus on short term earnings. These do not seem to be as good as the other 3 firms above. I have heard bad things about the culture at Lexecon in DC, for example, and CRA has had layoffs.

As far as business models go, the testifying experts at these firms are all either internal experts OR business school/econ profs who basically sign their name on the report but let the firm do the bulk of the work. Different offices of different companies may be more dependant on external vs internal experts, though from a career perspective I think it's better to work at a place with more external than internal experts, at least if you're a senior person, since it will be possible to rise to the top/be a partner by bringing in business and managing cases if you don't end up being an expert by testifying.

Bschool placement is very good. Pay is a notch below management consulting, but you also don't have to travel. You will have to occasionally stay late or come in on the weekend, though, but not nearly as often as in investment banking.

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May 2, 2012

Hey thanks for the info. It would be really helpful for me.

Oct 5, 2016

From the post, I'm guessing this is an entry-level/analyst position. If you're smart and hardworking, you should be okay. Depending on the office/practice of the person interviewing you, the questions would differ. There will likely not be too much actual modeling demanded from analysts. Most of the top econ consulting shops have or work with some of the best minds in their practice area (e.g., Nobel Prize winners). Knowing how to program in SAS/Stata is very helpful for most work, and superior Excel modeling skills will also be helpful for finance work. So questions in that area may come up.

Oct 5, 2016

I interned with Cornerstone this past summer. Their interviews have a case component whereas I'm pretty sure that AG's don't (never applied/interviewed with AG). For Cornerstone's cases, I don't think any preparation is necessary. Econometrics knowledge is definitely not necessary, but you should at least understand the basics of regressions. Sometimes knowing a bit of accounting info makes the cases easier, but you'll be fine without this and they assume that you don't have accounting knowledge. I think econ consulting firms get a wider variety of cases than management consulting, which means that there isn't really a basic case interview formula. In all honesty, if you're a good fit for the company, the cases will be a cake walk. I would suggest investing more time into the behavioral interview portion (which is the same if not easier than MBB interviews).

Also, some pros to econ consulting over MBB: better hours, slightly better pay, and no travel. Econ consulting is definitely a better fit for someone who is more quantitative and interested in analyzing data.

Good luck with recruiting!

Oct 5, 2016
phpe88:

I interned with Cornerstone this past summer. Their interviews have a case component whereas I'm pretty sure that AG's don't (never applied/interviewed with AG). For Cornerstone's cases, I don't think any preparation is necessary. Econometrics knowledge is definitely not necessary, but you should at least understand the basics of regressions. Sometimes knowing a bit of accounting info makes the cases easier, but you'll be fine without this and they assume that you don't have accounting knowledge. I think econ consulting firms get a wider variety of cases than management consulting, which means that there isn't really a basic case interview formula. In all honesty, if you're a good fit for the company, the cases will be a cake walk. I would suggest investing more time into the behavioral interview portion (which is the same if not easier than MBB interviews).

Also, some pros to econ consulting over MBB: better hours, slightly better pay, and no travel. Econ consulting is definitely a better fit for someone who is more quantitative and interested in analyzing data.

Good luck with recruiting!

Better pay out of undergraduate?

May 2, 2012

Management Consulting firms (including MBB) do some economic consulting projects. I've worked on a few, primarily for government entities i.e. multipliers, effect of x industry on x governments economy, etc. Not as technical as a pure econ consulting would do, but very interesting work nonetheless.

Oct 5, 2016

Nov 29, 2017
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Oct 16, 2018