Friday, July 2, 2010

Pushing rates down for consulting firms

A colleague of mine recently asked me how I'm doing in business on my own. I said I'm doing okay and continue to build client base. I asked how he's doing and his response: great, except guys like you are pushing our rates down.

I find this to be a jab of frustration from the larger consulting firms. I don't have the overhead that the larger firms do, and provide a better level of service, at a fair price. The larger firms became accustomed to higher rates in the wake of SOx 404 and now they struggle to maintain compensation structures that don't fit the economy.

Here's my take: the model of the Big 4 and consulting firms is broken and it's time to make changes to fix this. Outsourcing work to India or the Philippines will reduce costs, but risk increases in trying to manage quality of service.

Seriously-is any partner's time worth upwards of $400-$700 on your engagements? I think not!