Independent Consultants: Not Always on Your Own

Written by lewsauder

October 16, 2020

I’ve spent most of my twenty-five plus years in consulting. The exception is a two-and-a-half year period when I tried out “the client life.” I can’t say there is anything bad about working as a full-time employee at a company. But I can say that it’s not for me.

For me, consulting is demanding and fast-paced. You also have to be on top of your game at all times. And there are a lot of non-consultants that work like that.

At some time during my stint outside of Consulting, I decided to get back in. And I’ve never looked back. There was one fellow employee that I thought would make an excellent consultant. He was very intelligent, a true problem solver, and a born leader. Before I left, I spoke to him about joining the consulting ranks.

He had no interest. He was worried about the insecurity of consulting. He said that once a project was over, you had to worry about finding another project. He worried about being on his own as a consultant.

While this can be a risk, I tried to provide arguments that t wasn’t as bad as he imagined. I wasn’t able to convince him. Perhaps I can convince a reader or two.

Project-Based Work

One of the most common things about any type of a consultant is that they usually work on project-based work. Projects by definition are a temporary effort. It is most common for organizations to bring a consultant in for a temporary period to assist with a project.

They may need some expertise that they don’t have in-house. Since it is a temporary need, they don’t want to hire someone permanently.

Some organizations experience peaks and valleys in their business. They hire enough full-time employees to work during the lower periods. Then they hire consultants to supplement the team during the peaks.

One type of peak is a large special project. For example, an organization may decide to develop a smart phone app for their business. They may hire a team of consultants to gather requirements, design, develop, test and deploy the app.

Considering the wide diversity of reasons consultants are hired. There should be no surprise that there is a wide range of ways to be hired as a consultant.

Consulting as part of a firm

Many consultants hire in to a consulting firm. Firms often specialize in certain areas such as software development or marketing expertise. These firms have a sales (or business development) team that finds clients to provide consulting services for. For many firms, this is project-based work that requires a team of consultants.

The consultants are usually full-time employees of the firm. They may work on a long term (multi-month or multi-year) project for a client. When they finish – or roll off – the project, they wait to be assigned to the next project.

The consultant is usually paid a salary that they receive whether they are working on a project or not. When they are not on a project, they are “on the bench.” While it is nice to have a few days on the bench, that also means that you are non-billable. Being on the bench too long doesn’t add value to the firm. In some firms, an extended period on the bench can result in a layoff. Because of that, it’s always good to be adding marketable skills to your personal tool kit.

Independently Contracting through a firm

Some consultants with a particular skill, such as a programming language or deep project management, may independently contract through a firm.

In this scenario, the firm finds clients that need a particular skill and match the need with the skilled consultant. This allows the client to fill a specific need, while having a firm do the heavy lifting of finding the candidates.

The consultant can work independently at an hourly rate, without having to do the heaving lifting of finding clients. The intermediary consulting firm pays the consultant an hourly rate and charges the client a premium on that rate.

The true independent

There are some fortunate independent consultants that have a high level of in-demand skills along with a large list of contacts (known as a rolodex in the old days).

These individuals are in a sweet spot. They have knowledge and skills that organizations need. And they know enough people in the industry that they can market and sell their services without relying on a firm to drain away a portion of their fees for that service.

To be this type of independent consultant usually requires several years of experience. It takes a fair number of years to acquire that much experience and a large enough network to develop the reputation.

Hybrid approaches

While consulting firms hire full-time consultants to deliver large projects to a client. They often supplement their full-time team with some part-time independent consultants. Much like clients, they may need a special need for an expertise for a short period of time.

It’s considered ethical for the firm to inform the client which employees are their full-time employees and which ones are contractors. It shouldn’t matter to the client in most cases. They’ve hired a firm to deliver a project. The firm should be given the latitude to deliver it in the most efficient way.

Many clients however, view independent consultants, even through a firm, as a risk. They may feel the independent is more likely to leave the firm before the work is done if a better project comes along. They don’t realize that even full-time employees of the firm can do that just as easily.

Some clients also feel that they are hiring a consulting firm for more than just the project. Firms have established cultures and reputations. The client knows that when they have consulting firm X on the project that the full team fits a defined pedigree. If the firm adds in some outside consultants, they may not be up to par and they may change the team dynamics.

In my opinion, if the firm truly had that type of cultural reputation, they will use the same criteria for hiring independent consultants as they do for full-time consultants. In most cases, the client concerns are unfounded.

Hunting vs. Farming

In the sales world, we talk of hunters and farmers. Hunters are sales people who go out and “hunt” down new clients. These are the types that do cold calling and sometimes use very creative ways to meet potential clients and get their foot in the door and develop a relationship.

Farmers are the types of sales people who strengthen those relationships and harvest additional sales from existing clients. A common sales approach in consulting is to Land and Expand. Hunters land the initial project at a client. Farmers expand it to continue getting new business from them.

In many consulting environments, the Business Development team represents the hunters. Consultants, at every level, are expected to be farmers. Delight the client as you deliver the initial project. Develop a trusting relationship with the client. Help the client identify areas where you can continue to add value. Sign a contract for the next project.

The goal is to become the client’s trusted advisor and have them as a long-term annuity client.

Some may see that as milking the client. But it should be a win-win situation. As long as the consulting firm provides services that are of value to the client, both organizations benefit from the relationship.

Conclusion

The term consulting is a broad term that covers a wide array of services and they way those services are delivered. If you or I were to have work done on our house, such as a plumbing project, we may hire an individual plumber to do that work.

If it is a large project, such as an addition on our house, we may hire a company to bring in a team of workers to do it. The electrician on that team may be an employee or an independent contractor that they work with.

The key, whether you are the client or the homeowner, is to find the right person or persons to do the job you want done, at the right price.

What type of consultant would you like to 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 

Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

Lew’s Books at Amazon:

Project Management 101
Consulting 101
The Reluctant Mentor

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