II.1. The Consulting Environment

IMC arose from a need to self-regulate a profession under public scrutiny due to the misdeeds and avarice of a few. Prohibitions against contingency fees arose within IMC and the other firm-based consulting organizations because a few large firms were giving a bad name to the profession. (Such firms would contract with clients to be paid on the basis of short-term results, then get paid handsomely for achieving them. In the long run, however, their work was generally not in their clients’ best interests.)

The atmosphere that gave birth to IMC also proved to be the right time for the birth of an industry newsletter that not only provided timely topics about management consulting, but also exposed malfeasance of management consultants—both individuals and firms—who felt themselves to be above ethics. Jim Kennedy established Consultants News in 1970 when he moved from New York City to Fitzwilliam, New Hampshire. Jim became the chronicler of the management consulting profession, and its de facto public relations arm. When the Wall Street Journal or other media members wanted to know what was happening in the management consulting profession, they sought out “the Squire of Fitzwilliam.” Jim took on the sometimes unpopular position of being not only the conscience of the profession, but also the man who brought home the power of the press: if you didn’t want to see it on the front page of the next month’s issue of Consultants News, you didn’t do it! Jim’s power was discussed in board meetings of many consulting associations, and his potential disapproval often acted as a brake on more questionable plans of action.

Other management consulting associations continued to serve their firm-member focus, and the legal environment was observant of the profession – but not restrictive. The client abuse practices of some firms did not cause regulation of the profession as a whole. The government was aware of the consulting profession, however, with Marvin Bower appearing on April 14, 1971 “on behalf of the Institute, before the Board of Governors of the Federal Reserve System, testifying on IMC’s opposition to the ownership of management consulting firms by bank holding companies, a position approved unanimously by the Board.” (from IMC Membership Newsletter of May, 1971).Government licensing of management consultants was an active topic at the IMC Board level during these growth years. The discussions apparently ended without any action being taken.

Additional sections of this chapter can be read in the complete pdf file:

II.2. The Professional Associations
II.3. IMC from 1969 – 1988
II.3.1. The Formalization of Admissions and Certification
II.3.2. Merger Mania
II.3.3. The New IMC Culture
II.3.4. Everybody Wants to Get Into the Act

© 2004. The Institute of Management Consultants USA