Although it’s fiction, the video does a surprisingly good job of summarizing the bankers vs. consultants debate.

“Be a Burnout Banker, Teaching Math at My Prep School”

There’s a lot of burnout in both fields.  My management consultant friend almost quit after he had to work 14 hours on his birthday once.  True, consultants get uninterrupted weekends… sometimes… but regardless of whether you’re a banker or consultant, you’re going to work a lot.

To imagine the schedule of a consultant, just take my Week in the Life series and add traveling to Idaho at the beginning of the week and coming back at the end of the week.  Also delete all references to quantitative work and replace them with finger-painting.

“Nothing but Grunt Work”

Not quite.  

There’s a lot of grunt work in both industries.  In banking, it’s more quantitative and no one cares about offering “strategic insight” and putting things in quadrants - they just care what the Pro Forma EPS is.

“Make a Really Significant Impact and Get Home by 7:15″

I know of no consultants who get home by 7:15.  One of my friends is an IT Consultant and even he doesn’t get home by 7:15.

So far, banking and consulting might seem similar… but let’s take a look at the first part of this claim - “Make a Really Significant Impact.”

Despite what the consultant argues, bankers typically make far more of an impact than consultants.  True, some transactions fall apart, but when they happen you get a new public company or a new conglomerate.

By contrast, you never know if the recommendations consultants make will be implemented.  

Got results?

“Mining for Gold out in Saskatchewan”

“Business travel” sounds cool to people who haven’t traveled much before, but it’s less appealing when you’re flying to Saskatchewan every week in February.  Consultants are always on the road, and while bankers do travel occasionally, it is much less of a burden.

It’s fun to live in another country for an extended period, but it’s much less fun to travel back and forth every single week.

Plus, even if you are stationed in Saskatchewan you probably won’t discover any gold.

“You Try to Add Value… I Straight Create It”

At the junior level, no banker or consultant “creates value” and they rarely even “add value.”  Senior bankers who negotiate on their clients’ behalf can sometimes “add value” by getting the buyer to pay more, but even that is rare.

Both banks and consulting firms are in the business of giving advice: advice on what to do financially and what to do operationally.  Companies actually “create value.”

“House in the Hamptons and a Penthouse Loft”

Even at the market peak in mid-2007, 1st Year Analysts made only $150K ($60K base + $90K bonus).  While that’s a lot of money for someone fresh out of school, it’s certainly not enough for a house in the Hamptons and a penthouse loft - especially after taxes.

Bankers do make more than consultants, but it will take quite some time to turn yourself into Gordon Gekko.

“But You Still Can’t Buy Bottles with Starwood Points”

True.

Consultants make a fraction of bankers’ bonuses - firms are notoriously secretive about exact numbers, but even in good times a $10K bonus isn’t unreasonable for consultants.

You could argue that they work a lot less and therefore make about the same hourly wage, but I’m not convinced.  Sure, you won’t pull consistent 100-hour weeks in consulting, but it’s a lot more than 9-5, especially when you take into account the travel.

And even if it is more per hour, good luck having enough for bottles, let alone models.

“Take This Mouse and Get Back to Making $60K a Year”

Most consultants make more than $60K, but not by much.

However, they definitely don’t know how to use Excel properly - just ask that consultant we hired after I unplugged his mouse and he almost fainted.

The Consultant Formerly Known as Banker

One year, we hired a summer intern who was pretty good as far as investment banking interns go.  He didn’t do anything stupid, he always smiled, and he even bought us drinks.  But he “couldn’t take the hours” and he went to consulting full-time instead, in search of that elusive “work-life balance.”

I spoke with him the other day and he said the hours were pretty bad and he was being dragged around between 3 continents on clients’ whims - in other words, it was actually worse than banking, and he was getting paid less.

Damn, It Feels Good to Be a… Consultant?!

I didn’t continue with consulting because:

1. I hated constant travel.
   
2. I wanted to get tangible results rather than making “strategic recommendations” to management.
3. Oh yeah, I couldn’t tolerate making $60K a year.  Even $70K is pushing it.
   

That said, you may still want to consider consulting if your original plan was finance:

1. Consulting is diversified in different industries, so the financial chaos won’t hit it quite as hard.
2. No consulting firms have subprime anything on their balance sheets.
3. You might still sneak into PE if you get lucky.  Golden Gate Capital, for example, hires most of its Associates from Bain Consulting.  

Rebuttal?

If you’re a consultant who now feels angered, feel free to write in with a rebuttal and I’ll publish some of the most entertaining responses.  Make sure you also enclose some of those Starwood points.