ROCKS AND SHOALS:
ETHICS AND THE INDEPENDENT CONSULTANT
By Douglas Blaine
integrity of men will be measured by their conduct,
not by their professions of faith." -Junius 1771 AD
during this long consulting engagement, you find that you and
your Clients have become good friends.
a Gulfstream 5 with long range tanks, rent BMW's wherever they
land, vacation with their wives and kids at that exclusive new beach
resort in Thailand, drink double espresso at breakfast and iced
Stolichnaya after lunch and dinner. "Rudi" seems to own
the company but "Vlad" seems to have a piece of the action
too. Various underlings and scions abound throughout their crazy
extended corporate structure.
is not difficult - you've done this same type of Project several
times before; and you're putting in a lot of billable hours; using
up laptop and cell phone batteries like Christmas candy. You're
flying out early with these guys and staying away a week or two
and getting home late - all on overtime; you're eating early breakfasts
and late dinners together in hotel coffee shops and four star restaurants;
"Rudi" is a practical joker who plays a mean classical
violin, while "Vlad" likes to shoot skeet and fish. Everybody
on the Client's team is bilingual but, in deference to you, they
all speak English whenever you are present.
quite a bit about you too, over the past weeks, as you've been
traveling with them to set up a series of new bank branches around
the world. Your likes and dislikes, family relationships, your house,
car, preferences in clothes. How you handle people. Who you know.
What you like to eat and drink.
You and your
family are really beginning to enjoy the regular arrival of those
big checks in your Post Office box every Friday. You're getting
comfortable - really comfortable - with this Engagement, and these
So this is
what "independent consulting" is all about! Next month
I can make the down payment on 'THE BOAT'
it right there buckaroo! Fire in the hole! Incoming! Ahoogah!
you find yourself "getting comfortable" in a long-term
engagement as an independent consultant, start growing eyeballs
in the back of your head - because, like the dinosaur running over
a cliff - you're in trouble but don't yet know it!
As an independent
consultant, keep always in mind that you are the most temporary
guy on the Project. Whatever written or verbal arrangements
you made with the Client are only worth the paper they are printed
on, when you are in this environment. When you hit this milestone
when you start getting comfortable with the work - then start training
yourself to think of today as your last day on this Project, and
handle your finances accordingly, because more times than not, when
you are actually dropped by this sort of Client, it will be suddenly,
without warning and with no explanation - in most cases you won't
know the day, the what or the why. You're just gone!
went wrong with his financing, perhaps - or there was a palace
coup, and the royal family that was bankrolling your Client lost
their heads (literally)! You come down to breakfast at the hotel
and they are gone. Not even a note in your box. Checked out this
morning at 2 AM. At the airport, they tell you that the Gulfstream
took off at 4:00 AM without filing a flight plan. They owe you for
the past two weeks, and you're left holding the bill for your hotel
room; of course - you've got to buy your own ticket back to New
at the facts - you made a lot of money in a few months; that's
all you're left with - but that is what you are in business to make!
After all, you had no ownership in their organization, nor any political
clout within it, other than your minute-by-minute good relationship
with the Client. And, in the mind of your Client - however charming
he may be to you at the present moment - you were destined to become
history whenever his leading indicators started to point south.
First Rule Of Independent Consulting" - Always Expect The
Client To Turn On You Like A Rattlesnake. Talk about your Jeckle
and Hyde! I've come to work fat 'n happy only to find the Client
gone - replaced by an overnight coup d'etat by Board members opposed
to the Project; again, I once accidentally insulted a hard-of-hearing
Client's uncle when he misunderstood something I said in passing
and I was dropped with no opportunity to make amends; I was once
replaced on a very complex technical Project by a young Saudi just
out of Brown University with a BA in religion; as a member of the
royal family, the Client explained, he "needed Project leadership
experience"; Expect it; prepare for it; keep your dignity
- also keep your passport under your control. Always carry enough
cash to get home, and always keep a return airline ticket in your
wallet. And make sure that somebody important, knows where you are
at all times.
Always expect that this month's Invoice will go unpaid when
you submit it - expect this until you actually get the check and
the check clears - and be prepared to get up and walk out if your
money is not paid to you within 10 days.
Make this philosophy part of your pricing formula.
this obligates you to keep yourself emotionally uninvolved with
the last Invoice you submitted; i.e., don't ever really count on
getting paid for this last Invoice that you submitted! In your mind's
eye, plan on losing the last submitted Invoice - don't ever allow
yourself to crank it into your plans for the new boat until the
check has cleared! It's not yours 'till it clears the bank!
Use this little trick every single time you submit an Invoice to
your Invoice is overdue for payment by twelve or fifteen days! Don't
be a fool and work weeks for free for a deadbeat Client whose
never going to pay you, again! Something went wrong with his financing
- you will never know what happened back at home office in Transylvania,
but for whatever reason, he's not going to be paying you anymore
- that's why, you dufus, that your check hasn't arrived in three
be a sucker and continue to advise for free, a deadbeat who
was once a "friend" - no matter how charming! Get over
it! You were looking for a Client when you found this one; now go
find yourself another!
"Kenney's Second Rule Of Independent Consulting"
- Don't Be The Fall Guy!
As an independent consultant dealing with a brand-new Client, you
must always consider the possibility that you are being set up to
take the rap for something shady. "Vice President In Charge
Of Going To Jail" it's called in the trade! Or, the "Mark".
Or, "the Sucker". Class Assignment: Go rent that old Robert
Redford video "The Sting". Got to the library and check
out Sherlock Holmes "The League Of Red-Headed Men". This
scam has been going on forever. Don't let yourself become that VP!
it doesn't happen? You've been in the sheltered world of the
"Big 5" too long, my friend! This is the real world we're
talking about - you're now an Independent Consultant working outside
that protective "Big Five" umbrella - and now you find
yourself personally invoicing and personally collecting tens of
thousands of real dollars per week, and although you're putting
in a lot of hours, you know in your heart that your input is not
Is this dream
Engagement really "good luck", Buckaroo? Or
might it be "too good to be true"? It's
up to you to find out!
Third Rule Of Independent Consulting" - Never Let The Client
Know That You Are truly a "Singleton" - always mention
your Lawyer, your CPA, your Partners, your Industry Contacts, and
communicate with them on a regular basis in the Client's presence.
When you were a "Big 5" consultant-employee, you
didn't think much about the fact that your well-known firm - dozens
of worldwide offices prominently displayed on your stationery -
had a bevy of top lawyers ready to sue someone's socks off, if the
Client failed to pay your sacred monthly Invoice Of Consulting Services.
The Client, however, was always aware of the big, politically-connected
Firm that you represented, and so there was never a problem with
getting that "Big 5" Invoice paid.
as an Independent Consultant working on your own, you must create
in the Client's eye a sort of "shadow" Firm of "advisors"
and/or "silent investors" that are woven about you - people
who are all up to date on this Engagement - lest you appear vulnerable
and unable to protect yourself legally when the toast falls jelly-side
Fourth Rule Of Independent Consulting"
- Never Compromise Your Principles. Don't ever let yourself be drawn
into agreeing to something shady. Don't even discuss it with
the Client if he brings it up at dinner, over drinks, etc. Further,
if you detect something shady going on, immediately withdraw from
the people doing it, and the Project, even if it costs you money.
because it is the right thing for you to do.
because you could be prosecuted if your Client is a crook.
because if you compromise your principles - even by simply turning
a blind eye to shady Client dealings - the word will get out around
the consulting community that you can be "had". Then your
real troubles will begin!
Let me give
you an example from my own Practice. I was called in to design
and perform a worldwide survey of technology managers - about 4,000
of them - working for companies around the world, all of whom were
members of an international technical society. The purpose was to
determine salary and other differences between managers who handled
"voice" telecommunications, and those who handled "data"
telecommunications. (For your information, it worked out that the
"data" guys make out much better, mainly because "data"
sounds more techie and sexy to the people at HR who set the salaries.
I sent out
4,000 eight-page survey forms to these managers in 87 nations
around the world, using as the incentive, a chance to win one of
25 really nice TV sets. I was asking for a lot of detail in this
Questionnaire; salary dollars, detailed education, equipment types,
personal info, etc. and I figured that it would take a guy or gal
about 40 minutes to complete.
about 2,400 completed surveys; about 1,800 were usable and I
ground the numbers and produced a report with the obligatory pie
charts and bar charts, etc., and gave a presentation at the annual
meeting and a couple of magazine articles were written about it.
At this point,
I had been paid my (1.) Expenses to date; (2.) about 50% of
my Firm-Fixed Contract amount.
OK so far.
So after the big successful presentation, I go to the President
of this association to submit my final Invoice and - a minor thing
in my mind at the time - asked to schedule the drawing for the TV's.
the President's response to me as he crossed his $1,500 snakeskin
cowboy boots on the top of his mahogany office credenza and looked
down Manhattan toward the Statue of Liberty; you'll have to fill
in the slimy east Texas drawl, the squint in the sun-wrinkled face
and the big wink that went along with this, as he said:
Doug - y'all know, don' cha, that the way we've alwus dun these
here "drawn's" in past years, is that we jus' pass out
these TV's to those fellas and gals here in home office who worked
so hard on sett'n up the annual meetn' - it's kind of an incentive,
don' cha know, sort of a bonus for them! Nobody in the field ever
seems to win one! Haw! Ah Haw haw! So now, 'yall'ns just bring in
those TV's down to the 'loadn' dock downstairs, and I'll get 'em
all passed out to the racht people, damn straight!" (Wink!)
name was all over that Questionnaire and the instructions that
went to the 4,000 managers. It was absolutely stated in my own words,
over my signature, that a random drawing would be held to determine
which 25 managers sending in the completed Questionnaires would
receive the prize TV. The only reason those 4,000 people filled
out that eight page Questionnaire was, that they hoped to win a
Now here was the head of their association, intending to give away
their TV's to his headquarters snuffies and associated cronies!
To make a
long story short - I threatened to go to the Press unless a
fair drawing was held. He flew into a towering rage and threatened
to withhold payment and blackball me in the Industry unless I did
it his way.
At this point
I mentally kissed that final 50% goodby. That made what came
out and immediately set up a double-blind drawing of the names
of the 4,000 managers; held the drawings in my CPA's office with
signed witnesses; produced the 25 names on a list and sent it via
Certified Mail to the President of the association with copies of
eleven letters - each dated one week ahead - to the New York Times,
Wall Street Journal and nine trade journals, explaining the situation.
My cover letter promised to send the letters to the Press on those
dates, unless he agreed to a fair drawing.
my nails for 4 days, comes via messenger to my little Long Island
home office (1.) a letter firing my Firm and telling me that I would
"never work anywhere in Texas, ever again"; (2.) a check
for the final 50% of my time.
The TV sets
were grudgingly distributed by the association to those names
selected from my drawing, and somehow - although "blackballed"
in Texas - I got a reputation for being "untouchable"
in the consulting industry - which, I think, has brought me more
business in the long run.
truth emerges from all of this. It is that no one Client has
the power to ruin your personal reputation by lying about you, but
you have the potential for ruining your personal reputation by bending
your principles, yourself!
it; don't do the wrong thing, even if it costs you money, don't
ever compromise your ethics. "To thine own self be true!"
Life will reward you for your integrity.
lot more to learn about running your own Independent Consulting
Practice. My book, "THE WISE MAN'S GUIDE
TO THE TWENTY-FIRST CENTURY INDEPENDENT CONSULTING PRACTICE",
will teach you what to know . Go to "ORDER
FORM" and order by check or credit card.
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