I have an acquaintance who works for a consultant company. We all do. After attending his employers 2017 annual financial report, he informed me that a whopping 15% of the their profits came from independent consultant sub-contractors. Consultant companies are making big bucks off independent consultants.
Big bucks
It's easy to see why. A consultant company, being unable to offer enough of their own consultants to clients in such a demand-heavy market, lean on independent consultants like us to please their clients when they can't. It makes sense. The consultant company, in that situation, operates with no risk. They either say "sorry, we can't help" to their client, or they throw in an independent consultant and potentially earn a couple of hundred thousand kroner for no work. Times that by 10, 20 or 100 and it's big bucks.
Appearances
But it isn't just the big bucks they want. We had a dialog a year or so ago with a company who was interested in associating themselves with BrainBase (an independent network of 100+ independent consultants) when trying to win a rammeavtale. Why did they want that? The consultant company in question was medium-sized. They could not compete with the bigger consultancies. If they could lump 100-150 independent consultants in with their employees in a bid to win a contract, they would appear bigger, stronger, and more likely to win. Another consultant company even lists independent consultants they work with on their website as if they are employees.
If a consultancy company with 400 or so employees associates themselves with 100 of us, they can appear to their clients as if they are 25% bigger than they are. If a consultant company with just 100 employees associates themselves with 100 of us, we make them appear double the size they actually are. Something interesting happens when we consider smaller consultant companies of 50 or so employees (the ones most desperate to grow and compete with the bigger players): not only do we make them appear much bigger than they are, but that we are actually bigger than they are.
Power shift
So what sense can we make of this? One thing stands out: the thing that is valuable is us. "Yeah, but access to the clients has a value too!" you might be thinking. That is true, but the industry is shifting away from rammeavtaler, towards more a more open dynamisk innkjøpsprosess. It is getting easier and easier to work on assignments directly at big clients. In addition, a network like BrainBase has independent consultants already at clients all over Oslo - whether or not they got those assignments via the network. People in the network are sat right now next to leaders and decision-makers at small and large clients alike. A network like this means that access to clients has been under our noses this whole time.
It is we, us independent consultants (many who quit working at consultant companies to begin with), who are of such value to those same consultant companies that they now lean on us when they can't come up with the goods themselves. It is we who are responsible for large chunks of their profits, despite taking all of the risk. The thing that is valuable is us. What do we want to do with that value?
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