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Comment by gaius | Hacker News Reader

In consulting it's typical to get paid a quarter of your billing rate, as a rule of thumb. I've seen places where it's a tenth tho'.

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As you ascend the ranks of consulting and get to the top 3 shops (McK, BCG, Bain) it drops down to 1/20th to 1/30th. That is once you take into account the disparity between number of hours billed and the number actually spent doing the work.

I don't know the figure now but ten years ago you were expected to bring in at least ten million in business annually to be considered for partner at Andersen Consulting.

And how is this justified, does the companies brand and support structure really outpace the value that consultant is creating by a factor of 20 or 30?

I'm not sure what he means here - the higher up you get, the better the ratio. For partners it gets inverted - they are making more than their billing rates because they're getting a cut of everyone below them's billing too.

When you buy consulting, you're buying a commodity. The premium is meant to insure you against natural variation, key people quitting, and so forth. Joe Accenture is meant to be interchangeable with any other Accenture consultant. A lot of the overhead is the extremely rigid, prescriptive methodologies that are supposed to make this possible. For multi-year projects, enough budget-holders believe that this is worthwhile for the entire Big Consulting industry to exist.

That type of strategy consulting is completely different from IT consulting. You don't "ascend" from doing IT work at Accenture or IBM into doing management consulting at MBB.

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