Comment by ryanlchan | Hacker News Reader

Comment by ryanlchan | Hacker News Reader

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tl;dr The best chauffeur doesn't have to be the best driver, and consulting firms are not raw meritocracies.

I work at a McBain Group level consulting firm as one of the analysis-slaves. My colleagues hail from many different universities, but only around half are Ivy League, though all are first tier. There are 15 of us, whittled down from a field of around 3,000. In other words, for each position, they considered about 200 applications.

We might not be the best analyst, the best client negotiator, or the best excel wrangler, but in this industry those aren't the only things that are valued - the firm's profits aren't singularly tied to the strength of their recommendations. There's a certain amount of flash and pedigree that they need to justify billing out a 24 year old at $300 an hour. This isn't unique to consulting, but seems to get paraded around due to the amounts of money the position commands and the apparent inequity of taking the 'rich' and making them richer.

Think of your girlfriend/wife's hairdresser. Are they worth the $50-150 she pays them to cut their hair? Is that haircut really worth the %300 premium over supercuts or the corner store?

Based on the raw haircut of course not. But this stylist does Michelle Obama's hair, he has great gossiping skills, and the salon looks great. So she does it anyway.

There are tons of industries just like this. Why are there no ugly people in Hollywood? Why do Apple products command a premium? It's very similar to any other luxury good; you pay a lot for each incremental improvement.

Can you explain that "flash and pedigree" line? What is that? Is that basically having the right upper-middle-class background? Your next sentence seems to imply that it's related to the economic status of these 24 year olds.

If that's the case, as per your last paragraph, what's the incremental improvement that "flash and pedigree" provides?

Well honestly it's about backing up the $300/hr rate. the job of the consultant is to come in and quickly convince the client that they not only know what they are talking about but are experts at what they are talking about. In reality you've only read the wikipedia article and a few trade publications for background, but somehow you have to convince the client that you do, in fact, know your shit.

The flash and pedigree refers to one of the ways you can convince people of your expert knowledge. People tend to put more faith into a recommendation that comes out of a Harvard grad than others, even if the Harvard grad talks completely out of their ass (pedigree). Furthermore, if the client sees that other people, just like themselves, have been paying this Harvard grad to talk out of his ass, they figure he must be a good person to have (prestige).

So in essence, the high rate of consulting comes down to the ability to say 'but we have lots of Harvard/Princeton/Yale minds working on this!' and 'No one ever got fired for using IBM'.

And that's just the way the firms like it.

ah, thanks! So it's the incremental improvement of a Harvard vs. a Cornell, or even a (gasp!) non-ivy. That makes sense, i suppose. I think I got confused because, as you acknowledge,

  "We might not be the best analyst, the best client
  negotiator, or the best excel wrangler,"

which suggests that they are not actually experts, right? I.e., school-choice and performance/ability are already divergent, but that's really not the point of the school.

So i guess, compared what some of the other posters here are saying, if you didn't go to a top-flight school, then you actually don't have a chance to get into these places, right?

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