3 Signs Your Consulting Firm will fail

your consulting firm will fail
Signs your consulting firm will fail

One of the greatest fears anyone can have in their career is an impending layoff. It usually starts as a rumor.

“Hey did you hear they’re planning layoffs?” There is always that person who seems to always have the inside track. Sometimes the rumor comes to fruition. Sometimes it ends up being just that – a rumor.

Everybody needs to try to be aware of how things are going with the financial health of the organization they work for. It’s even more important in the consulting industry.

Every industry has its own indicators that things may not be going well. It is the employee’s responsibility to follow those trends and to decide whether to stick with the organization and ride out the storm, or to find a firm that is in more stable condition.

In consulting, there are three critical signs that the firm is facing its impending doom.

Cost cutting

When consulting firms are doing well, there are great perks. Teams are taken out to nice lunches to thank them for their hard work. Lavish holiday parties are thrown with elaborate dinners and expensive rewards. Travel expenses are under very little scrutiny.

But when times get tough and cash flow becomes an issue, the luxuries are – rightfully so – the first things to go. You may get an email announcing a new policy requiring certain expenses to be approved in advance.

For more information  see Managing your Consulting Career

The company party this year may be held at a smaller place. The food is a little cheaper and the liquor selection is not as good.

You may even find that there is no longer free coffee and snacks in the break room. And by the way, you now need to contribute a little more to your health insurance.

An ever expanding bench

No consulting firm can keep everyone assigned to billable projects all the time. There will always be people waiting in the wings for the next winning proposal to result in a client assignment. These consultants are said to be “on the bench.” Well-run firms know this and maintain some staff on the bench so that they have people ready when that next proposal wins.

Very few firms publicize the ultimate number of people for the bench. But the consultants usually have a good feel for when the bench is thin, when it’s just right, and when there are just too many people unassigned. These people draw their salary, but aren’t bringing any direct revenue to the firm.

Too many people on the bench will cut too deeply into a firm’s bottom line. If consultants on the bench are a challenge to assign to a billable project based on their skills or attitude, the firm may opt to let them go.

If the firm is unable to acquire projects to assign people to, it leads to the next sign…

A small pipeline

Consulting firms need to have a steady pipeline of incoming new business in order to grow. It is a delicate balancing act of creating a new business to grow, and hiring the right number of staff with the right skills to do the work that is sold.

Firms struggle to sell new work for a number of reasons. Sometimes the sales staff lacks the right knowledge or focus to sell services effectively. Selling services is about developing relationships. Sales reps who just want to rush to the sale will usually struggle.

If a delivery team fails to deliver quality work on a consistent basis, the best sales teams will have trouble selling. Once a firm develops a bad reputation for quality, word gets out within the industry and project sbegin to dry up.

Sometimes firms lose their strategic direction. They focus on technologies and business approaches in which clients are no longer interested. If it takes the firm too long to recognize changes in trends, it may be to late to adjust.

When the sales pipeline begins to ebb, the firm begins laying people off. This may be to cut the cost of a bench that’s too large, or an effort to remove employees that have obsolete skills.

All firms have ups and downs

Every firm may have a bad quarter where they begin watching their expenses more closely. There may even be a round of layoffs as a surgical strike to make a staffing correction.

Sales are not always on a constant upward trajectory. There are going to be strong sales pipelines where everyone fears how they will staff the projects if they all sell at once. Then there will be times when the pipeline thins to a trickle.

A consultant needs to monitor for signs that a consulting firm is going down the tubes. There will down times for which they will make corrections. And it is not always a bad sign. But when multiple signs occur at the same time, a consultant needs to determine whether to move on or but the last one to turn out the lights.

Have you seen signs that your consulting firm will fail?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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Contractual Documents Used in Consulting

Contractual Documents Used in Consulting
Contractual Documents Used in Consulting

I had a friend once who had several years of experience. He decided to give consulting a try. He knew a friend in the industry and made an agreement to consult for him. It was a handshake agreement. They were friends after all. It would have been insulting if either side insisted on a signed contract.

My friend worked for his friend for a few weeks and submitted an invoice for his services. His friend balked. He had no idea the cost would be so high. He didn’t agree to that.

My friend insisted that they had agreed on his hourly rate and that the invoice was accurate. His businessman friend had a different memory of the agreement and had different expectations.
Continue reading Contractual Documents Used in Consulting

Please the Client or Please the Boss

Please the client
Please the client

Successful consultants know that there are two critical success factors to consulting: Provide quality service and sell more of it. It is hard to sell more services if the ones you deliver are of poor quality. But providing top quality does not guarantee additional consulting business at that client.

Selling more business at an existing client is a skill all by itself. On top of providing high quality work, the consultant needs to keep her eyes open for other opportunities. Growing an existing account is important for consultants at every level

Consultants should think about what is best for the client and not the consulting firm. If the consultant reaches that pinnacle – being the client’s trusted advisor, he may not have to worry about selling. The client will come to the consultant with issues to solve without any need for the consultant to go into sales mode.

There are some old-school consulting executives that still don’t believe that. They give the trusted advisor stuff lip service. But they still focus on the tired techniques of making sales calls and setting sales quotas.

This puts good consultants in a bad situation. How do I avoid coming off as a “sales guy” with the client and developing trust, while still meeting expectations for the boss? At a high level, there are a few options

Focus only on the boss’s direction

Some consultants decide that they get paid by the boss. They do what the boss tells them to do. If the boss wants them to make a specified number of cold calls or emails, that’s what he’ll do. Bonuses may actually be tied to these numbers and not to sales.

Some of those may activities may end up resulting in a sale. Chances are, however, that more activity than necessary will be spent getting those sales. The most likely sales will be made by developing the relationship. If a cold call results in a sound relationship, it may result in a consulting sale. But the likelihood of a sound relationship coming out of a cold call is very slim.

Focus only on becoming the client’s trusted advisor

The consultant may believe that helping the client is more important than meeting an artificial set of quotas set up for the boss. In that case, he may opt to simply ignore those quotas and go on with his own philosophy.

The boss may check in regularly to find out how many cold calls and contacts the consultant has made. When he learns that number is zero, many results are possible. The boss may put him on a performance improvement plan until he brings his numbers up.

At a minimum, he will receive a lecture about not doing his assigned work. He will face further scrutiny in the future and tougher consequences each time he gets a zero for results.

Balance the two options

While the boss is asking for numbers, what he wants is communication with the client. Developing relationships with the client is largely about the same thing – only with meaningful content.

If the consultant combines checking in with the client, learning about his business, and developing the relationship, he will also be making the contacts that the boss wants.

The key is not to sell, but to develop the relationship. The boss may think you’re selling on these calls. In reality, you are. But if your conversations are focused on the client and not on your sales quota, you may, in the end be able to please your clients and your boss.

Find a firm that follows your philosophy

The reality of pleasing both the client and the boss is not impossible. However, developing a relationship with a client that is strong enough to become their trusted advisor doesn’t happen overnight. It can take a long time and a lot of conversations. It’s not based on the number of contacts, but the quality of them. Because of this, the quota-desiring boss my get tired of waiting for this relationship to morph into hard sales.

When that occurs, the consultant and the boss may have philosophical differences that are too deep to reconcile. A consultant caught in this type of a conflict may be better off moving on to a firm that holds the same values and approach. The consultant will work in lockstep with his firm’s management and will be more successful because of it.

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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Process and Consistency – Not Always the Same

Process and consistency
Process and consistency

I once worked for a man that had a defined process for everything. He tracked everything with a spreadsheet. Everyone was expected to follow all of his processes to the letter. People became so bogged down following process that they got little else done.

It was also a drain on morale. They did so much mindless administrative work that their brains never really got a chance to create anything meaningful.

At another time in my career, I had another boss who went to the other extreme. He didn’t believe in process at all. He thought that if we establish core principles, people should be enabled to make decisions on their own.

The problem was that nobody knew what anyone else was doing. Duplicate tasks would be completed by two people because neither one knew the other was working on it. Some tasks fell through the cracks because everyone assumed someone else was doing it.

Consistency is important for an organization as well as individuals. Consistency is not necessarily rigidity. Everyone needs to be flexible for the many situations that they run into on a daily basis. So where is that balanced area between not-too-rigid and not-too-loose?

Defined processes: Some people cringe when the word “process” is mentioned. Others break out in hives if a process is not well defined. An organization needs to define basic procedures to define roles and responsibilities to make sure the right people do the right things. There should be enough flexibility to allow people to apply their own creativity.

It also depends on the application. There are areas such as establishing IT Security where a lot of rigidity may be necessary. In other areas, establish the necessary parameters and let the team determine the rest.

Which Bob will show up: It is important as an individual to have a consistent approach to people from day to day. Some people allow their emotions to control their behavior. If there is a lot on your mind or you are under a lot of pressure, some form of release has to be in place. It is important for people to expect similar behavior from you on a consistent basis.

Good days and bad days: That being said, consistency does not imply that you are a robot. Everybody has good days and bad days. The goal isn’t to be perfect. But the variation in mood should not swing too far in either direction. When there are swings, it should occur on an infrequent basis.

Slow and steady wins the race: Some people, especially when they start a new job or responsibility, become gung ho to change the world in a short period of time. They work long hours and they expect others to do the same.

But that’s an excellent recipe for burning out. Someone following that approach will make some great gains initially. A point comes when they’ve been so hyper-focused on one thing that they have had enough. Others working with them have given up and they find they are now working on their own.

Working toward your goals on a consistent trajectory, having success on a consistent basis is still the best way to succeed. Taking breaks and allowing the work to stay fresh allows you to apply your focus and your creativity in more positive ways.


We all know people who are too rigid in their approach. We probably also know people who meander through their days letting life happen to them. Neither is necessarily wrong. But when you work with and manage people in the business world on a daily basis, it is critical to have some form of consistent approach. People like to know what to expect and when to expect it.

How consistent are you in your work?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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The woman who could communicate

Woman who could communicate
Woman who could communicate

I once knew a woman who worked as a client relationship manager (CRM) for an IT consulting firm. The CRM’s role was to be a liaison between her clients and the candidates that we placed with those clients.

Her job was to work with the client and understand their resource needs. She would then communicate those needs to recruiters who would identify IT workers to be candidates for those positions.

After the recruiters submitted the candidates to her, she would talk to those candidates to verify their abilities. She would negotiate rates with both clients and candidates. If the candidate was rejected, she would communicate it to the candidate. If selected, she worked to help get the new employee on-boarded.

That’s a lot of communication across a lot of people. It wasn’t just a single transaction with each person either. Each placement required multiple conversations with each stakeholder. And she managed many client requirements at a time.

She didn’t have a degree in IT. But she was very good at what she did. There were many factors involved in her success. But I think the main reason was that she had a knack for communication. She was a young woman in her mid-20s. Yet her communication skills were well beyond her years.

Since we worked in a small office, I could hear her conversations without intentionally eavesdropping. I noticed that she had several traits that made her a great communicator.

She was likable

When she talked to the client, she didn’t just collect the requirements. She talked to them and developed a relationship with them. Her clients grew to like her and like dealing with her. That magnetism gave her an advantage over competitors who were simply trying to take orders and fill slots.

She knew how to say things

Many people who need to have a business conversation will plan the conversation. They may make some notes or plan it out in their head. But they don’t always know how to say it. It requires diplomacy and a certain confidence that can’t be planned. She may have made notes too. But before she called, she knew what she was going to say and how she was going to say it.

She was smart

I don’t know whether she knew quantum physics or could recite all of the Presidents of the US. But that’s not the type of smart I’m talking about. She was a problem solver. She understood that every client’s need was unique as was every candidate. She accepted each requirement as a challenge. She wasn’t just checking items off of a list. She was solving a problem with each requirement.

She wanted to help people.

Her driving purpose was not to make money or get a promotion. She just wanted to help people. She took great joy when she would match a candidate to a client. She was helping the client fill a need. She was helping a candidate find a job.

This might have been her ultimate key to success. She wasn’t competing with anyone. She was just trying to serve a purpose of helping others. And she loved what she did.

Many people equate success with acquiring knowledge, obtaining advanced degrees, getting certifications and such. But everyone has the natural ability to be driven by a purpose. And if they can learn the proper communications skills, they can be more successful than they ever dreamed.

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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7 Reasons Your Billing Rate is Low

billing rate is low
Why your billing rate is low

We probably all know someone who does the same thing as we do but makes a lot more money doing it. We can sit there in jealousy, wondering how he or she does it. But they are obviously doing something we are not. It’s probably more than one of the items below.

You’re not up to date on technology

There is still demand for mainframe COBOL programmers. But everyone knows it’s not the hottest skill in demand. While organizations still need people to maintain their old back-end systems, they’re paying top dollar for cyber security skills and mobile app developers.

Technology changes at a more rapid rate than ever. Last year’s hot technologies may be obsolete by next year. If you don’t invest the time and money to keep up to date on the latest technologies, you will find fewer companies willing to shell out high billing rates for you.

You’re not up to date on business trends

Similar to technology, business trends also evolve. If you’re recommending direct mail strategies to your clients in a world that that is developing email lists, clients will see you as out of touch.

Consultants need to follow business trends in trade journals, blogs, Ted Talks, and anything else they can get their hands on. Additionally, consultants should belong to industry groups that meet regularly to share ideas and keep each other up on the latest trends.

You’re locked in on a contract

A long-term contract with a client can provide the security you may be looking for. Depending on the terms, it can also keep you locked in at a rate while other consultants are passing you by.

When signing long-term contracts, it is wise to include increases that will at least keep you in line with the cost of living. Otherwise, keep in mind that risk and reward have a direct correlation. If you’re not willing to risk being unbillable, you may not have the luxury of demanding high rates.

You can’t be found

Whether you work as an independent consultant or as part of a large firm, people need to be aware of your skills. As an independent, do you have a website that people can find? You may need to invest in some search engine optimization (SEO) tools to make sure that potential clients can find you for the right skill searches.

Independents should also make sure that they’re always expanding their network. Networking is the greatest way to develop a pipeline of clients.

If you are a consultant working for an established firm, you still need to make sure the decision makers at the firm know your abilities and strengths. If the people who staff projects don’t know you or your skills, your chances of being staffed on the high-billing projects goes down significantly.

You pigeon-holed yourself

Maybe you’ve always had a niche skill. That’s great, until it’s not. Skills that are in high demand can demand high rates. But that demand can fall to the wayside quickly. If your skill is transferrable to another in-demand skill, you can sometimes expand your market with limited retooling.

For instance, let’s say you have several years of web development experience creating user interfaces. With limited training and a little experience, you can expand your marketability to be a mobile app developer. Always consider similar skills that your existing knowledge and experience may cover.

You aren’t selling value

It is the age-old sales debate of features vs. benefits. Features sound great but they don’t necessarily solve problems. Benefits on the other hand, are what really add value for the customer.

When IT consultants sell themselves, they often talk about the skills, knowledge, and experience they have. A technical client may be able to translate that into value. But it shouldn’t be the client’s responsibility. Consultants that want to increase their billing rates should be savvy at explaining to the client why their skill is of value to the client and why they should pay more for it.

You are inefficient

If you waste a lot of time repeating questions or missing important meetings, clients will have problems increasing your rates. Clients see value in productivity. If you can prove to the client that you can produce more than your competition in the same hour that they are working, the client will pay a premium for your hours.

One of the best ways to do this is to be organized. This includes knowing where to access documents and emails from the past. An efficient filing system – for physical and virtual files – will definitely increase your productivity.

Additionally, having a well thought out process for identifying priority tasks and getting them done is imperative. Having a to-do list for each day helps to make sure you’re working on the right things at the right time.


Like any business person, consultants want to maximize their income to the best of their abilities. It’s easy to develop practices that limit your ability to do that. Being aware of those practices can help you avoid those ruts and greatly increase your income.

Are you billing as much as you should be?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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The Boss’s Unreasonably High Expectations

High Expectations
The Boss’s Unreasonably High Expectations

The movie “Eight Men Out” is about the 1919 “Black Sox” scandal in which several members of the Chicago White Sox fixed the World Series by losing games on purpose. They did this based on an agreement with two gamblers who promised to pay them more for losing than they would have gained by winning the World Series.

Eddie Cicotte was a pitcher on that team and had a $10,000 bonus clause in his contract if he won 30 games. When Cicotte reached 29 wins, White Sox owner Charles Comiskey ordered the manager to bench him for the remaining two weeks of the season.

And such is the world of business. People are provided incentives to reach milestones that can be manipulated, preventing them from being reached. In other situations, the carrot is set so far out of reach that few, if anyone on the team can reach them.
Continue reading The Boss’s Unreasonably High Expectations

I Took My Eye Off the Ball

Took My Eye Off the Ball
Took My Eye Off the Ball

Boy, did I screw up last week. We had a big opportunity for one of our biggest clients. They asked if we could help them place a very specific resource. They only needed this resource for about two or three months. It wasn’t going to result in a lot of direct profit for the placement itself.

But this was still a big opportunity for a number of reasons. It was an opportunity to show them how responsive we could be. The company I work for has a vast network of IT resources. We could have proven that to our client by providing them exactly what they were looking for.

It was an opportunity to move closer to being our client’s trusted advisor. In consulting, that’s the goal with any client. You want to be the go-to team that the client turns to without considering any competitors. When they know that you have the client’s best interests in mind, they don’t think of you as an outsider. They become reliant on you to help them be successful.

It was an opportunity to remove friction from our client’s daily work. They had a need. Something was missing that was making their job more difficult. We could have filled that void and made the client more productive, more profitable, more successful.

It was an opportunity for future business with this client. They would have said to themselves, “They did a great job in that other situation, I want to work with them again”.

When we got the request from the client, I immediately sent it to our sourcing team to find this rare talent. But then, I didn’t follow up. I got busy working on some other things. Before I knew it, a week had passed. The client notified me that one of their other vendors found the resource they were looking for.

For more information see Managing Your Consulting Career

I could argue that I had nine other major initiatives that I was working on. I could blame our sourcing team for not providing someone promptly and keeping me in the loop.

I could probably come up with as many excuses as there were opportunities. But the bottom line is that I should have owned that. I should have done my job by making sure others were doing their job.

I lost all of the above opportunities. I also let my team down. All those years of coaching my son in baseball, telling him to keep his eye on the ball, and I took my eye off the ball.

It doesn’t matter how much experience we have or how good we think we are at what we do. We still have to keep our eye on the ball and execute for the client.

If we don’t execute, someone else is always in line with their eye on the ball, waiting for the opportunity to execute better.

When has taking your eye off the ball cost you opportunities?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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The Stone Soup Approach to Consulting

stone soup
Stone soup made in a village

The old folk story of stone soup is about three vagrant travelers passing through a small town with nothing but a cooking pot. They ask residents of the town for food but meet resistance at every door.

Finally, they go to the local stream and fill their cooking pot with water. They place a large stone in it and put it over a fire they built in the center of town.

This piques the interest of the towns folk and they asked the vagrants about their endeavor. The three men explain that they are making stone soup. They describe how delicious it is, but it just needs a little garnish to finish it off

One of the townspeople doesn’t mind providing a few carrots. Another offers come celery. Other people offer various herbs and spices.

Before long, a delicious pot of soup is enjoyed by the whole town.

Consultants are often brought in to a client to implement changes at a client. Consultants should realize that, like the three travelers, they are only facilitators. Consultants rely on the inputs of other fellow consultants, client employees, and other third party stakeholders.

The knowledge the consultants brings to the table is the result of learning from managers, mentors, authors, and previous client.

No matter how much impact you feel you have, make sure to remember that there is a team involved that has impact on your impact.

How have others from your past impacted your impact?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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How to Help the Client Make Decisions

How to Help the Client Make Decisions
How to Help the Client Make Decisions

I have an aunt who up until the age of 93 drove herself to the doctor for each visit. At each of those visits, the doctor would to tell her to stop smoking. She didn’t heed his advice and her life was cut short at 95 years of age.

We tend to look to doctors to heal us. But they are really just advisers. They can prescribe medicine, suggest different ways to eat, and advise us to change bad habits. But we have the final decision over how we live and how it will affect our health.

Consulting works in the same way. Consultants can advise their clients on recommended business practices. The client can choose whether they want to follow that advice. They may disagree with it. They feel it’s too big of an investment. There are ways that the consultant can help the client make the right decision.

Be like an auto mechanic

When you hear a clanking sound in your engine, you probably take your car to the mechanic. The mechanic will investigate the noise and advise you on what needs to be done. If it’s very expensive, you may decide you want to live with the clatter. The mechanic should tell you whether it is dangerous to drive with the noise.

A self-serving mechanic may try to sell you something you don’t need. But a good mechanic may show you the damaged part and explain whether it is dangerous to drive in that condition. He will educate you to allow you to make a decision.

Explain the impact

When you suggest a form of action, it is important to explain the pros and cons of any options you provide. Your solution may have a high cost, but a potentially high payback. Doing nothing may have no initial cost, but may cause the client to fall behind the competition.

Part of the education process is explaining the good and the bad of each option to enable them to make the best decision.

Understand client’s objectives

Consultants should be aware of the client’s business strategy. What are they trying to accomplish? Are they seeking growth in market share? Do they want to maximize revenues? Or do they want to reduce costs? Each option may require a different approach.

In order to give the client advice they can act upon, the consultant needs to understand where the client is trying to go.

Advise from the customer’s perspective

Like the self-serving mechanic, some consultants advise clients based on what the consultant has to sell. If the consultant installs a specific software system, that is what they suggest the client buy.

This type of advice does not consider the client’s best interest. It also is not a long-term solution. If the consultant convinces the client to purchase a product or service the client does not need, he probably won’t be a client for long.

Providing the client advice based on the client’s needs will help them make good decisions. It will also make the consultant more likely to be the client’s trusted adviser for the long haul.

Make a recommendation

Simply providing a consultant with some options and providing the pros and cons is not very helpful. The client is looking for advice. Telling him all of the options like the scarecrow from The Wizard of Oz, listing out possible directions may further confuse the client.

There are times when the consultant must say, these are all the options, here are the pros and cons, and this is our recommendation.  Once the recommendation is offered, provide the rationale for the suggestion. Like a patient, the client may decide against your recommendation. But that’s their prerogative.

Implement according to the customer’s preferences

Regardless of your suggestions and any information you provide, the client will make a decision. That decision may result in a project the client wants your firm to implement. If that happens, implement it according to the client’s wishes.

Some firms are contracted to implement a system that goes against what they recommended. They will make decisions based on what they think is best rather than what the client ordered. This again will hurt your relationship with the client and keep you from becoming the client’s trusted adviser.


Consultants have a lot of expertise and are paid to share that expertise with their clients. But like a doctor, their expertise is sometimes not followed. A good doctor provides sound advice with sound reasoning, hoping the patient will follow it. A good consultant must do the same. Provide advice with reasoning and allow the client to make her own decision.

How have you influenced client decisions?

As always, I welcome your comments and criticisms.

If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com

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101 Tips for Success in Consulting