The weekend edition of The Wall Street Journal reported that two traders of a NYSE "specialist firm" had been convicted of securities fraud. Their crime? They were found guilty of putting their firm's interests ahead of the interests of their clients. According to the Journal, "Prosecutors said the men each made $1million in illegal profits for the firm's account as a result of their trading." In my mind, these guys are crooks.
Compare this to what frequently happens in the consulting arena. Unlicensed and for all intent unregulated, consultants are not typically under the watchful eye of a Securities and Exchange Commission or other regulatory agency. What happens when consultants put their firm's interests ahead ahead of the interests of their clients?
First, how do they do that? Common examples include putting under qualified staff on an engagement; recommending and implementing software solutions simply because the software vendor is an "alliance partner;" overstating consultant's travel expenses; "running the clock" by performing unnecessary "busy work" and even purposefully low bidding an engagement estimate while secretly planning to collect additional fees by abusing the change control process.
Second, what typically happens in those cases? Unfortunately, very little happens unless the behavior is discovered and exposed.
Unless informed otherwise, the client might be disappointed with the level of service received; with the quality of the consultant-developed solution; with the inability of the new IT system to meet all the original requirements or with the project's significant cost overrun. In most of these cases, the client isn't even aware that the consultants acted less than honorably. The client may think the consultants weren't especially competent or that they grossly underestimated the work involved, but rarely does the idea that they might be crooks enter the client's mind.
But in those types of cases, which are more common than one might expect, that's exactly what they are -- crooks.