My posts related to consulting typically focus on management consulting, but having done an internship at Cornerstone Research I wanted to talk about why economic consulting can be great. Here are 5 reasons why I would recommend applying for economic consulting positions.
1. The Work
The work itself is usually reasonably interesting. Economic consulting firms are fairly expensive, so you’ll be working on cases that put many millions of dollars at stake. These cases often impact major firms that you’ve heard about, or relate to interesting products to learn about. You probably won’t see news articles about your cases as frequently as an investment banker would, but occasionally you’ll encounter deals that have a public appeal.
You will also get a greater variety of cases in economic consulting than in management consulting. The nature of the work allows analysts to work on multiple cases at the same time instead of focusing 100% on a single engagement. This exposes you to more types of cases and more industries more quickly than most management consulting jobs. This obviously comes with a trade-off in depth, but if you’re looking for a wide survey of what exists in the world, economic consulting can be the fast-track to your future.
Here are some of the types of engagements I had during my summer at Cornerstone:
- Investigated an activist investment fund for use of fraudulent or otherwise illegal methods of obtaining shares in a pharmaceutical company
- Investigated due diligence practices of a major bank being sued for selling mortgage-backed securities related to the 2008 crisis
- Disputed claims that our client failed to properly appraise houses in mortgage-backed securities related to the 2008 crisis
- Built a model to calculate a reasonable royalty payment for our client who was accused of patent violations in the healthcare industry
- Built a model to calculate the lost profits caused by our client who was accused of patent violations in the high-tech industry
- Checked and disputed arguments against our client who was accused of insurance fraud
If you’re aggressive, you can also mold your work into what you need. If you want to develop excellent coding or quantitative skills, this can be an excellent place to shore up your talents and put them to use (I made extensive use of VBA for Excel and learned a bit of SAS coding). If you want to experience a certain industry, or develop skills in litigation, you can gain valuable experience and intelligence for the future. There are limits to the customization, but economic consulting can prepare you for a decent variety of opportunities if you know how to navigate it.
2. The People
I loved my coworkers at Cornerstone. Economic consulting firms tend to hire intelligent, humble people who are reasonably enjoyable to be around. Many of them intentionally evaluate applicants for how well they think they would enjoy being around the candidate for 60 hours a week. Since the recruiting process filters for that, you have a good chance at being around a great group of people.
3. The Skills
Economic consulting will help you develop a lot of the usual business skills. These include the ability to work in teams, manage time, deal with stress and pressure, and how to manage relationships with superiors and those that you manage.
Economic consulting also helps you develop excellent critical thinking skills, especially as you move up in the firm (which can happen relatively quickly). Each case requires you to develop arguments that can either hold weight in court, or at least persuade an opponent to settle on more favorable terms. You are literally battling an opposing team of smart people, and if you’re sharp, you can quickly make some real contributions to dismantling your enemy’s arguments.
The critical thinking also spills into learning superior writing and communication skills. Your arguments will only be as effective as your conveyance, so you’ll be working with excellent writers and communicators with superior attention to detail and coherence. You won’t get away with anything, so you’ll be working hard to make sure your reasoning is rock-solid.
You can also build some hardcore quantitative skills in economic consulting. These firms often deal with huge amounts of data that Excel literally cannot handle, requiring analysts to learn data manipulation techniques in more powerful software such as SAS, STATA, or R (I don’t think many of them use SPSS). It’s best to enter the firm with a basic background in these programs, but training is often available.
4. The Lifestyle
Compared to management consulting, economic consulting often seems friendly. The average hours worked is still fairly high (50-60+ hours/week on average, with occasional intense weeks of 80 or 100+ hours), but you won’t be traveling on a regular basis. The only travel you might encounter would be for training or outings similar to any non-consulting firm. Although the hours can be a little unpredictable, if you can manage the variance then the lifestyle can feel pretty smooth.
5. The Compensation
Unexpectedly, economic consulting often pays better than management consulting. This is especially true on a per-hour basis, but at some firms the salary and bonus for an analyst coming out of undergrad is higher than for the Big 3 consulting firms. Accepting my offer to BCG instead of Cornerstone meant foregoing $13,000 over the first year in the differences between the base salary and signing bonus alone, not counting performance or other bonuses I could earn at Cornerstone. More money for an average of fewer hours and no travel can be quite an attractive offer.
If Econ is so great, why did I choose BCG?
I legitimately think that economic consulting can be a great career move, and I sincerely enjoyed my time there. In fact, the only thing that could have pulled me away from Cornerstone was an offer from one of the Big 3; I wasn’t going to apply to any other consulting firms except for maybe Oliver Wyman and L.E.K.
Here’s what BCG offers me that pulled me from Cornerstone. First, more training on interpersonal skills and client interaction. Although Cornerstone would give me training in this, management consulting seems to require much more of it much more quickly and with business people I might be working with in the future. At Cornerstone the interaction with clients is primarily with lawyers and expert witnesses who are great people, but who wouldn’t necessarily be the kinds of people I anticipate spending the majority of my time around in my next career move.
Second, economic consulting is primarily fixing problems that have already happened instead of trying to find solutions for future or current problems. There’s a lot of fun in fixing problems, developing arguments, finding stories, and repairing the past, but I felt that I needed more training in building creative solutions for the future. There’s a bit more ambiguity and stretching room in management consulting, and although I’m not necessarily as comfortable with the ambiguity, I wanted to learn how to become comfortable.
Finally, there’s a more institutionalized culture of feedback in management consulting firms. You receive plenty of feedback in economic consulting–more than some people like–but I want something akin to an overabundance of feedback to help me grow and progress as quickly and completely as possible. Management consulting will provide me with more feedback than I will likely be able to handle, and that’s appealing to me.
So if you think you can get into economic consulting, it might be a great choice for you. The perks are great, and it can set you up well for some great exit opportunities. Even if you aren’t an econ major (I wasn’t, I had only taken 1.5 econ classes before my internship) you might still have a healthy future in economic consulting. If you want more help on getting in to economic consulting firms, my next consulting post will include tips on how to break into the econ consulting world.
Keep seeking truth.
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