Description of the Field
While many businesses sell products or services, consulting firms primarily sell knowledge. Large consulting firms cover different fields of consulting, including management consulting, human resources consulting, marketing consulting, technology consulting, and economic consulting.
In economic consulting, (sometimes referred to as forensic and litigation consulting) firms advise corporations and government organizations regarding the intersection of business, economics and law. This may involve assessing the damages when a firm is accused of doing economic harm to another firm, forecasting current and/or future liabilities stemming from an environmental product liability, or determining whether price movements were consistent with an alleged manipulative scheme in a particular market, such as energy.
Economic consulting firms are hired to consult on a case or dispute. In these cases, there will generally be one expert (often a faculty member from a university economics department or a business school) who will be supported by a partner at the consulting firm and team of analysts, who assist in conducting the analysis and assist in the preparation of the expert's report. Usually the dispute is settled before going to trial, but if the case goes to trial, the expert may testify.
The larger economic consulting firms tend to offer and support economics and finance experts in the following areas: antitrust; securities; financial institutions and their practices; intellectual property damages; health care; labor; energy and telecommunications; and general commercial damages. Depending on the firm’s specialty, the analyst’s interests and experience, and the client’s need, an economic consulting analyst may be required to conduct research in any of these areas.
On the Job
An entry-level employee in a consulting firm is often referred to as an analyst or associate (this language will depend upon the firm). Entry-level employees are typically hired after completing a four-year bachelor’s degree and are hired for their analytical, research, and communications skills. They usually work as a part of a team focused on solving a client’s problem, and they may research, document, report, and design and build financial and statistical models. Research may consist of collecting raw data from internal sources, such as the client's computers or employees, and from external sources, such as trade associations or government agencies.
Here is how Marissa, one economic consultant, describes her work:
My firm would be hired by the Department of Justice or the Securities and Exchange Commission (SEC) to develop expert independent opinions for their lawyers on whether or not illegal activity occurred or could occur under a transaction. To give you an example, imagine there were two companies in the same industry that want to merge with each other. At first glance there may seem to be nothing wrong with this plan, but then you have to consider whether the merger would result in an unfair advantage, creating in some sense a “super company” that controls most of the market and can keep out competitors. In economic terms this is known as a monopoly. In the US we try to keep monopolies from forming because then that means the monopolist company can charge whatever price it wants for its goods or services since there is no price competition with other companies. To figure out if the merger would result in a monopoly my firm would conduct a number of analyses to figure out if there would be alternative options available to the public if the merger occurred, among other research. As you can see from the merger example, the types of issues an economic consulting firm deals with can be very broad in scope and require a lot of research to determine the impact of a transaction, whether it already happened or is pending.
I helped to conduct some of this analysis in my first role at the firm as a research analyst/consultant. I would review the documents the lawyers provided us with from the case, as well as crunch data and create charts and graphs to communicate our findings. We weren’t just doing this work for the lawyers, but ultimately our analysis would be presented in court so we had to make sure it would make sense to the jury so they can use it when they deliberate. As an analyst I usually worked on two to three projects at a time, so time management was key. Also, it was important that I checked in with my managers on each project. The managers tended to be people with graduate degrees in economics, or in some cases a Master in Business Administration (MBA). I would work with them to determine what types of analyses to do and then start doing it. If a case we were working on was going to trial I then had to work more closely with the trial lawyers too, going over any presentation slides or charts we created with them and writing a report that summarized the findings.
Working on so many projects and doing so many different things meant that I usually had very long days in the office. I would arrive at work around 8:30 am and leave sometime between 6 pm or as late as 11 pm. A few times I even had to work until 4am! Still, even with the hours, I enjoyed the work. It was interesting, it challenged my thinking, and it paid well. Plus, once I was promoted to Senior Consultant I had the opportunity to manage other consultants. This brought with it a host of other challenges: managing my consultants’ time and my time, and sometimes accepting that I just couldn’t do it all. With projects that could be as short as two months to projects that were years-long, there was definitely a lot to do all the time and that variety is what I enjoyed most about the job.
Many consulting firms have an “up or out” organization, where each employee must achieve a certain rank within a certain period of time. Failing to do so, they must leave the organization. Therefore, the career track in economic consulting is often clearly laid out.
After graduating from college with a bachelor’s degree, a new employee is typically hired as an analyst or associate. He or she spends two to three years at a consulting firm before returning to school to get an MBA, Ph.D., or law degree, though some firms will promote top analysts directly to the senior associate, or consultant level. From the associate level (post-MBA or graduate school), an individual can work toward a position as manager, managing director, vice president and partner/principal. If an analyst chooses not to go to graduate school after two or three years, there may be other opportunities within the firm, but if not, skills developed will be useful in both a public or private sector job search.
The consulting industry generally has expanded in the past few decades. Economic consulting has grown especially as complex litigation raising topics that interest economists has mushroomed. President of Analysis, Group Martha Samuelson, describes its growth:
Increased complex class action litigation in areas such as antitrust, as well as increased focus by federal and state regulators on complex business and financial issues have driven industry growth. As a clear example of the former, [Analysis Group has] coordinated the economic analysis for Microsoft in over 140 consumer class actions which followed the Department of Justice litigation with Microsoft. These cases raise fascinating questions of the importance of network effects and economies of scale in explaining market position and profits, as well as the complex task of determining what but-for software prices would have been, if indeed conduct by Microsoft is proven to have raised price levels. As examples of the latter – work that has resulted from regulators and their initiatives – we have supported several Independent Distribution Consultants under joint retention by the SEC, state attorney generals, and independent mutual fund trustees. The task of these experts is to quantify the impact of market timing on long-term mutual fund shareholders and distribute appropriate restitution. Many similar situations requiring sophisticated analysis have arisen as a result of these new forces in the private and regulatory litigation arenas.
Qualifications Necessary to Enter the Field
Generally the formal requirements for an entry-level position are a bachelor’s degree, a strong grade point average, knowledge of economics, and an ability to use Word/Excel. Firms also look for people who know how to use statistical packages like SAS or STATA. Larger firms recruit in the early fall and smaller firms may recruit in the later fall.
Besides outstanding academic records, firms want people who can solve problems, think creatively, communicate well, and who understand and are interested in business. Top candidates will also have previous experience in the business world (consulting internships are impressive but not required) as well as extracurricular achievement. Firms specializing in IT consulting or e-business may require technical skills and experience. Networking may play a huge role in obtaining an internship and, later, a job, as hiring can be very competitive.
Many companies offer summer internships or summer analyst or associate programs, and a successful internship often leads to a job offer.
Top management consulting firms usually hold two to three rounds of interviews. The first, known as a “fit” interview, is generally a discussion of a candidate’s background and experience. This part of the interview process allows a candidate to demonstrate important characteristics and traits such as leadership, innovation, and creativity.
In the second interview, or “case” interview, a candidate will be presented with a business problem and will be given time to provide a strategy and possible solution. This interview allows candidates to demonstrate analytical and problem-solving skills, along with interpersonal skills and confidence levels.
Each firm will have its own process but will likely include these types of interviews. Practicing case interviews is essential, and a career services mock interview, practice with case studies such as those in Case in Point, and participating in a case competition can help prepare you for the case interview.
Sample Group of Employers
National and International:
Selected U.Va. Organizations/CIOS
For a full list of organizations at UVA, please see: https://atuva.student.virginia.edu/Organizations
Virginia Case Club
Virginia Consulting Group
Sample UVA Career Programs
FTI Consulting Information Session
Bates White Economic Consulting Information Session
Fall Consulting Symposium
Economic and Litigation Consulting Night
CapTech Consulting Information Session
Deloitte Case Competition Kick Off
Kaiser Associates Information Session
Introduction to Consulting with Accenture, Bain, and McKinsey
Women’s Networking Reception with Accenture
Resources for Additional Information
- 2016 Best Consulting Firms for Economic Consulting -- http://www.vault.com/company-rankings/consulting/best-firms-in-each-practice-area/?sRankID=78
- Vault Career Guide to Consulting (sign in and enter your UVA email for free access, or sign in through Handshake)
- 2005 description of the field by Martha Samuelson, President of Analysis Group: http://www.analysisgroup.com/uploadedfiles/content/careers/cswep_ms_article.pdf
- Vault Insider Guide to Consulting, 2017
For more information on case studies, candidates should read:
- Vault Case Interview Practice Guide 2 – (accessible through Handshake)
- Vault Guide to the Case Interview by Eric Chung – (accessible through Handshake)
- Case in Point: Complete Case Interview Preparation, 7th Edition, by Marc Cosentino – (available for loan in the ECO)
- Consultants Network - https://www.linkedin.com/groups/40103/profile
- International Consulting Economists - https://www.linkedin.com/groups/6744632/profile
- American Economics Interest Group - https://www.linkedin.com/groups/48465/profile
Michael C. Jensen (1998). Foundations of Organizational Strategy. Harvard University Press. p. 215. ISBN 978-0-674-64342-0.
Martha Samuelson, President, Analysis Group http://www.analysisgroup.com/uploadedfiles/content/careers/cswep_ms_article.pdf