Hiring Consultants
Sep 14, 1998
Every A/E/P or environmental firm finds it necessary to hire outside consultants at some point. Whether it’s simply to get tax advice or to plot out a new course for a growing firm, it’s inevitable.
I find it interesting how many firms forget their common sense when it comes time to select a firm or an individual to assist them. Following are some common “consulting needs,” along with my thoughts on what you ought to look for:
Business Planning: Look for a firm (or individual) with a proven track record of managing a successful enterprise. Firms purporting to be business planning experts that don’t grow, make profits, or pay their bills should be immediately disqualified. To find out this information, ask. Check with other people in the industry. Run a Dun & Bradstreet credit check. All kinds of information is out there if you seek it out. As far as the individual consultant is concerned, find someone who will deal straight with you. Don’t be seduced by the silver-tongued devil that offers excessive praise for your accomplishments! And there are plenty of them out there!
Recruiting: Recruiting is probably the easiest service to sell and the hardest to deliver, especially in this employment market. I would not work with a contingency fee firm because even though that sounds like a good deal for you, it’s usually not. Who would work on a contingent fee basis if they were any good? No one! That certainly applies to recruiters! The other problem is that most of these people will place someone with your firm and then try to re-recruit him or her six months later! Get a firm with a solid track record serving companies like yours. Check references. Make sure the recruiter who will be handling your job is knowledgeable. And don’t think that the recruiter’s likelihood of success is based on whom they know— it’s more likely tied to their process.
Marketing: Once again, success in marketing themselves or their firm is the most important criteria for hiring a marketing consultant. I can’t understand how some of the scruffy losers that I have run into over the years ever get even a single job. I can only conclude that some of us are so naïve we don’t even think about someone’s track record. And if the marketing consultant has just gone out on their own, probe into their success at their last job. Get specifics on revenue growth, close rate, and marketing campaigns that they have created. Years of experience, duties, responsibilities, and an employment history with firms whose names you recognize are not sufficient in and of themselves. There are loads of incompetent people working in good firms (or who used to work in good firms.) Check references, if you can.
Public Relations: If I were hiring a PR consultant I would want to know the specifics of who, what, when, where, why, and how they got other firms publicity. That’s the bottom line. Also, look at the PR consultants’ own publicity efforts— how well known are they in this market sector (or as a PR consulting firm). I would not make A/E/P or environmental industry experience a hiring must, but I would want them to demonstrate some knowledge of this industry so they don’t fall into the common PR traps (i.e., focusing the entire PR effort on getting into A/E/P industry publications with braggardly project descriptions and expensive photography).
Lawyers: In hiring an attorney (or law firm), the most important selection criteria should be trust. Do you trust that the attorney has your best interests at heart? If not, look elsewhere. I would also look for a firm with extensive corporate experience, not one that just does real estate transactions and wills. Mid-sized or larger firms are probably more likely to have the individual expertise you need for different situations. Of course, there’s nothing wrong with having your regular outside counsel and then bringing in A/E/P industry experts as required. Sometimes there are professional liability, contract, or employment-related issues that require specialists. Use your local network to find qualified referrals.
Accountants: Most firms go through more than one outside accountant as they grow. You start out with someone you know— probably a friend or neighbor. As you grow, you’ll probably decide you need a mid-sized or larger company with some diversity of talent levels and types for help with specialized sales tax issues, exchange rates for international projects, or implementation of a new project accounting system. Don’t expect to have a fixed-cost agreement that covers anything you ask them to do for you over the course of the year, either. And unless you are really large, you probably don’t need one of the Big 6. On the other hand, you may find that these companies are the best equipped to handle an audit, and will sell their time to you at a competitive rate for audit services so they can get the rest of your business.
Mergers & Acquisitions: Once again, beware the contingency firm. They usually get a few thousand dollars up front and then a percentage of any transaction value that they are involved in. These people will tell you anything to get a deal done because that’s the only way they can pay their bills. One fellow out there is pushing a list of firms that in some cases have not agreed to market themselves through him. He sends it out and if a potential buyer shows interest, he attempts to get the sellers interested. It’s really misrepresentation as far as I am concerned. There are very few people who really understand the A/E/P and environmental business. I would certainly insist on being able to talk to some client references that were involved in deals that came about as a result of the consultant’s efforts.
Appraisal/Valuation: Find a firm with good references, professional liability insurance, and lots of experience in our industry. You may even want to request a sample report. Don’t think that appraisal can be handled automatically by your regular outside accountants. Very few of these people have any depth of appraisal experience, much less in this industry. Beware of “appraisal by mail” offers that sound too good to be true. And don’t forget that valuation is sort of like fee estimating— you should use more than one method to determine a fee and you should find a company that uses multiple means of establishing a value for your firm.
Originally published 9/14/1998
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