So, a report gets commissioned that a company like Deloitte gets paid $440k for, and then they cheat and use AI to generate it, complete with more errors. Imagine what would happen if they retained Deloitte next to build the system. I foresee another repeat of the Fujitsu Royal Mail scandal.
The people at Deloitte are not generally dumb unmotivated people. They are ruthless $$ chasers and if AI is allowed they will use it to check the boxes and move onto the next paycheck.
Many of these people will effectively have their life ruined. Many will likely take their own life. Its not just harmless paperwork fudging when it results in men with guns being dispatched.
You end up consulting at Deloitte when you can't get into MBB, any of the smaller boutique firms, strategy at big corporations etc. Accountants are an exception but they're only there to pad their resume before exiting to corporate in-house finance roles that lead to CFO positions.
Deloitte is to outsourced business consulting what Infosys is to outsourced software development.
Dumb and highly motivated, then?
During initial engagement you are often talking to somebody who appears to actually know their stuff - you hire them and find that this knowledgable person has moved on to the next big sales, and you've got the B or C team.
This was for a contract where we made it very clear that quality/skill was paramount and we would happily pay above market rates forever if they could maintain it. Of course they got greedy and lost the deal entirely.
After the B team set everything up, they didn't even get the Z team. A few months in, it turned out NO ONE was logging into their ticketing system at all, so there were hundreds of tickets their engineers had created with no acknowledgement. Just lol.
And no, you don’t pay partner rates. The client generally knows that to do commercial pressure you need to get info about team size, put it in the contract, and then negotiate on blended rate so it is close to what the market pays for the junior.
So the choice is trying to hire a bunch of individual contractors and forge them into a team, or hire a pre-built team for a period of time [1]
[1] Sometimes it's sold as a re-built team - but in reality it might be hired in exactly the same way by the consultancy....
What does happen is that you were pitched/sold by a perfect PowerPoint presented by a senior partner/manager, but all the work afterwards is done by the 26-year old fresh-out-of-MBA consultants. The partner is still responsible for the project, but mostly on a “I'll review your work later from an expensive restaurant I'll bill the client for”.
They'll also invent the wildest things when it comes to tech work. I was working as an expert on software development and integrations, and often had to tell clients that what the consultants promised is simply not possible.
I'd get them up and running and then put together a plan to fix them up, but then some junior got assigned that job. The client then gets mad at me for not helping them anymore.
If it's a small firm or a 1 person contract then sure.
I'm the CEO and I don't really like it when the annoying guy down the hall tells me what to do, so I'm gonna spend $50,000 and have a team come in and interview everybody and then they'll tell me the same thing the annoying guy said, for years, but because they're outside consultants, I'll listen to them when they say it.
Sounds like a job that AI easily replaces
You may also be surprised how many companies have 1 guy in house who pretends to be an expert and does his damned best to prevent people getting hired who might out them.
Good consultants come in, tell you how it should be done, with evidence. Better consultants then provide those services if needed on a project basis. Usually "Good Consultants" in the IT industry are absolute heavy weights. Like we carry a bunch of different skillsets where there are few other people in our country with the same experience, and no one can afford to carry that expertise on an ongoing basis, but lots of people are willing to pay for a couple hours a month.
That ofc, does not reflect the sales channel for most consultancies. Sales is focused on finding anyone they can schmooze into paying for services. Generally where large consultancy firms are involved, the decision maker is treated like royalty. Usually it involves helping them cheat on their spouse or get access to drugs. Weeklong out of town trips, usually vegas, paid for by the consultancy, with a hefty petty cash card. Smaller decision makers might only get local strippers and beer.
One time, I was involved where a company we were consulting to on X, was concerned they were being lied to by consultants on Y project, and we stepped in and sounded them out in a meeting in front of the client making it evident they were just being told to justify Dynamics CRM and Sharepoint at all costs.
Having consultants do anything in this situation is antithetical to the ideal of a company. The company should fail, OR, the consultants should advise that the company should either fail or gain the expertise to no longer require consultants.
Obviously this isn't going to happen, and here we are.
And apparently so much so that they feel they can even use AI-created reports/materials...
The customers are big companies with huge budgets, and a lot of red tape. The guarantees they want the most are legal. If things don't go well in a project, or if a project isn't implemented on time, they want to have someone to sue. Someone that will not simply go bankrupt and disappear. "Quality" is almost a nice to have, compared to the legal guarantees.
Enter the Consultancy companies. They have a huge amount of workers, a lot of them fresh out of university. The quality of the work they produce might not be great, but when problems arise, they can always throw more people at the problem (or to make them work longer unpaid hours). They are sometimes called "meatfarms", because of this. They will not go bankrupt easily.
The way these companies develop software is by third parties, often overseas, sometimes, frequently via several intermediate companies, each one adding their cut.
I must stress out that it work. Boring, soul-crushing at times. But it is not easy. Just dealing with the red tape is a job on itself. The kind of contract that needed to be written before a medium-sized project has to be very detailed. It details things like what will happen when the project derails, what will be the penalty and who will pay what. It's a small book.
Source: I was one of those "fresh out of college" people when I joined Accenture. I once was asked to estimate how much would it cost to change one (static) website's scrollbar color from default to yellow. The quote for that change alone, perhaps 10 LOC change implemented by someone in India, was 3000 euros. This was around 2010. I was glad when they offered me a severance package.
This is absolutely insane and, quite honestly, hard to believe.
What if you built a company by recruiting such people and sold their expertise at a premium?
I also think assuming there's no real skill at any consulting company is probably a mistake. Or if anything, they're not just all "management consultants" and many of these places have tech consultancies as well. There are also tech companies that are basically specialized consultancies---compsec is probably a very visible area where it's a more common model and at least some firms get some respect for competence.
There's plenty of criticism for consulting firms and it can be very valid. You can probably even dig up stories of bad consulting experiences in the comments on HN.
But I've known people who worked at places where they didn't really have the talent to solve some unique problem, or their own people had caused the problems.
Good consultants will try to pick the brains of employees for insight that's been missed, ignored, or simply wasn't communicated well. They have have problem solving skills that overlap with a good software engineer, such as requirements gathering, communicating with managers, etc.
- They helped our company to negotiate the minefield of government R&D tax credits, by interviewing all the developers and assessing how much was R&D compared to the guidelines (which are complicated). I think this was a good use of consultants: You get someone with specialized knowledge, and unless you're an enormous company, you couldn't afford to have someone with this knowledge on staff all the time.
- They ran a survey of our software development practices, which they also ran with many other software companies, and then compared our performance to the other companies. I think if you're a completely useless manager with no idea about software, then this could be good, as it might highlight obvious ways that you could improve your processes. For us, it was a waste of time and money.
1. Since tax prep is siloed away from development, you don’t know what you don’t know about your company’s tax and regulatory posture. You as a product owner don’t know how it compares with the industry. You don’t know the space of ways it can change.
2. But then, when they find that your development floor looks like everyone else, it’s less than profound. This analysis is most valuable to the outliers; maybe a company that’s merged and bought smaller ones and as a result needs to be told that they’re out of shape.
Big corporations and governments aren’t startups in which everyone is encouraged to do as they please in service of the mission. Corporations and governments hire people for very specific roles with very specific responsibilities. Stepping outside of your responsibilities is discouraged. Employees inside big organizations have to think, “how fucked am I if I make this decision and it goes wrong?”. A startup can write off big losses without a second thought, a big corporate or government has to investigate.
If you need to make a big decision, you don’t let an intern take a shot at it, even if they are convinced they have the perfect idea, because if it goes wrong, it’s on your head — which idiot let an intern fuck it up?
You bring in consultants who are (ostensibly) experts so that your responsibility ends at having done the right thing and if anything goes wrong, it’s not on your head.
> The trope you’ll often hear in circles like ours is that big 4 consultants exist to provide cover for unpopular decisions. That’s sometimes true. However…
And then in the rest of your comment you outline exactly that "consultants exist to provide cover for unpopular decisions".
I was an IT consultant. A big energy company wanted to go to the AWS cloud. Their folks were too busy and had no experience. We (my consultancy company) already had the knowledge.
Consultants don't only give advice. In many cases, they also do the work. But advice is also a "product". If your in-house team does not have the knowledge or time, you hire a consultancy firm.
That means even when an in-house team has the same expertise, they have to adhere by in-house processes and hierarchy.
If a CEO signs off a consultant contract, they dont play in the same arena, and can often side-step the hurdles an internal team would face, without anyone internally getting too upset (compared to an internal team side-stepping processes).
https://www.youtube.com/watch?v=3M7SzS_5PlQ
pretty much covers it in under two minutes.
But there's more to it than that. Your investors don't trust you if you're not the sort to trust Deloitte. (Your investors probably also invest in Deloitte, by the way.)
Suddenly you face change, maybe the markets are changing, or tech has come a long way - but in any case, it is in something which is either outside your area of expertise, or you don't have the resources to do it yourself.
So instead of hiring N people to do that one thing, you pay external people to do it for you. This is especially attractive in agencies where you have budgets to consider, can't just hire workers on a whim, and where firing workers can be equally difficult.
That's where consulting firms come in. Most big consulting firms tend to be huge, and have expert networks all over the world - so there's a decent likelihood they'll have someone that have knowledge in the problem you're looking to get solved. And they hire smart enough people that will toil away.
In a good scenario the consultants will have interviewed you, taken a deep dive look into your organization, analyzed the data, and either answered out your problem, or laid out exactly what you need to solve that problem. Usually on the strategy side.
For the implementation itself, you can either go to step 1 and hire people to do it, or hire some other consulting agency to actually do the implementation work.
That's at least the ideal situation. Sometimes consultants are just hired to rubber stamp controversial leadership decisions, and to back up things that leadership can't get internal backing for.
Of course, when the project is inevitably a late, half functioning, buggy mess you get to blame the consultants.
The ideal goal of consultancies like Deloitte's is that they hire a small number of people with experience and combine them with a larger number of young bright people and have them come in to review and advise organizations. The people with experience (so who have worked in that field before) direct the engagement and the leg work is done by the juniors, producing a report for the customer.
As to why companies would choose to use consultancies, there's a variety of reasons, some good, some less than good.
- Outside perspective & experience. The consultancy has done engagements with other companies in your field and can provide that experience.
- Neutral point of view. The consultancy should be neutral to any internal politics within the organization.
- Appeal to authority. Many times organizations use consultancies to provide evidence to external stakeholders that the thing they want to do is the right thing.
Now that's not to say that it always (or even often) works out that way, but in theory at least, there are some not terrible reasons.
The only person I know who ended up at a high-ish position at McKinsey with proper industry experience had as their only job being the founder of a company they worked quite hard for 15 years to build, and sold it. Still, it's someone who only had a narrow experience in their industry which is now advising companies in very unrelated fields.
Let's say you're a supermarket chain. You have lots of problems that only a small number of other companies - your competitors! - also need to solve.
If you hire a big enough consulting company, they will have a large amount of internalized knowledge relevant to those problems that they gained through previous projects working with your competitors.
Of course, they're never going to deliberately reveal other company's internal secrets, or directly assign people to work with you who worked last week with your competition... but industry expertise and "best practices" still flow through these channels.
I love how you summarized 99.99% of influencers and lifestyle/business coaches.
There's also asking for good advice for narrow problems from experts with decades of experience.
Both of these play major roles and they're often very easy to tell apart.
Two reasons:
- Expertise
- Bandwidth
That's it. That's the reason you hire consultants. Your team either doesn't have the expertise or the bandwidth to do the work you require. Could you hire for expertise and bandwidth? Absolutely. Is it hard ($$) to do that? Yes, and in most cases it's arguably WAY harder, especially when the effort is episodic.
Whether they are actually an expert, or just someone with a deep, confident voice who tells you what you want to hear is another thing.
Same reason all workplace PCs are Windows.
While I've done more than enough Powerpoint presentations telling clients what they already knew but didn't want to say out loud, there are some circumstances where bringing in a consultancy is a very good option.
Some examples:
As a software/cloud/data/AI/cyber guy (I wore a few different hats over the years...), I regularly caught up with buddies working in legal, tax, audit, retail, space travel(!!) etc. for coffee chats. It's surprising how often those of us who specialise in one domain had breakthrough moments from offhand chats with specialists in other domains. Very few people get the opportunity to have these sorts of conversations, and it's amazing how often you learn something relevant for your own work situation over a quick coffee.
When I needed expertise in one of those domains into one of my projects, I could send a message and almost always get someone on a call within a few hours. Very few organisations could get e.g. a high-ranking ex-NASA official on a call quickly to pick their brains, but I could.
Lots of times organisations don't have the deep expertise and/or available people to deliver on their internal projects. When a major rail transport provider needs to work out how to going to deal with new government critical infrastructure regulations for their IT systems, it's consultancies who can pull all the right skills together to help them out.
When there's a critical shortage of available IT skills in the marketplace, companies use consultancies to top up their workforce. Here in Australia, there were nowhere near enough GCP experts to go around for the last 4-5 years, so companies could either try to hire the very few people around at exorbitant rates, or tap a consultancy for resources.
Big 4 consultancies in particular throw high-quality training at their technical staff like nowhere else I've seen. One reason: quality training = billable hours. I had people around me burn out from too much training, and I'm pretty sure regular companies don't have that problem. For all the pointless Powerpoint presentations we did, there's a sh1tload of technical expertise sitting in Big 4 consultancies, waiting to be tapped.
Companies are always struggling with how to use the latest IT shiny tools properly. Right now it's AI - how can I use it to save costs or increase productivity? What are the ethical and legal implications that come with AI, and how can we deal with them? How can we deploy AI solutions securely? Which of our business problems are the best fit for AI solutions? How do we train our ops staff to keep these AI solutions running? - the list goes on and on.
Now a lot of people here in HN know how to do these things, but how does a regular business tap into that expertise and filter out the bullshitters? The answer is they go to a consultancy that (they feel) they can hold accountable.
On that point, sometimes execs in a company simply need someone to shield them from blame for unpopular decisions like mass layoffs. It's pretty well know that consultancies do a lot of that type of work, and they (justifiably or otherwise) cop a lot of crap over it so some exec can say "I didn't do it".
I'm probably coming across as a huge fanboy of consultancies, but remember - I'm an ex Big 4 guy. I think their influence is too large, particularly in government policy making; I've encountered way more sociopaths in Big 4 leadership roles for it to be down to chance; by any measure staff turnover and burn out is very high, and I'm convinced that's by design.
However, they have their place.
In some cases there is distrust from management on in-house employees or in some other cases they want to show quick results without distracting their teams from their planned tasks.
Of course there are the cases that managers have personal motives, either to add an extra (useless) achievement on their list or even worse to get referral fee or presents from the external consultancy.
You hire consultants when obfuscation is the point - it's not Jim from down the hall saying this, its the consultants. Sometimes there are legitimate reasons for obfuscation, but it's always some variation on "so and so needs to hear this, just not from me."
On the other hand, the people you get from the consulting firm, who were not hired with your particular needs in mind, and who are assigned by leaders who are both unfamiliar with what you do and have motivations which may not be perfectly aligned with yours, are normal people drawn essentially at random from a normal distribution. Maybe you don't need to have a particular skillset in house full time, but the person whose job is to do something will always outperform the person whose job is to maximize billable hours.
Then you sure as fuck don't want Deloitte within miles of it.
Personally consultants are just another tool in the mid-hi management toolbox. Just as a workforce on a payroll, this can be used in a good clever way and this can spiral into a shit show real quick.
1. The exec has been charged with exploring a new product space, a potential M&A deal, more vertical integration etc etc
2. The exec needs a gauge on the "size of the prize", is this thing worth doing? roughly how will it be done? how long etc.
3. The exec probably already has a rough idea or gut feeling about one such option
4. The consultants produce something that usually supports the gut feeling, other times it will suggest alternatives and provide some facts and figures to support
(This was long before his political achievements)
https://www.youtube.com/watch?v=9vMdZhIfPjs&list=PLtuDeBJEKi...
Hey this report was done by McKinsey and they hire from Harvard and Stanford, and hear how well they speak and look how soft their hair is, the report must be good!
Imagine one rogue employee out of 10 commits fraud, do you get all your money back? No you get the billable hours + damages for the fraud.
If it worked the other way contracts would be longer than the actual work to be performed.
The role of the outsourced consultancy in such a project is to make sure the findings withstand public scrutiny. They clearly failed on this. It's quite shocking that the only consequence is a partial refund rather than a review of any current and future engagements with the consultancy due to poor performance.
There shouldn't be a meaningful difference if the error in the report is minor or consequential for the finding, or if it is introduced by poorly used AI or a caffeinated up consultant in a late-night session.
Congrats clueless CEO… you’re now selling a worse product at lower margins. Success!
You have to provide scale and quality that was out of reach before and is now table stakes (whenever now is for a given industry).
Don't think they realized they'd also be driving the value to zero.
Is this bad? This seems good. The end goal being once it's cheaper, you can do more revenue. Also while I obviously don't stand by this Deloitte scandal when done right GenAI work is better
Before they used AI, they used just-out-of-grad-school interns...
People who've never work in consulting have no idea how crazy the gap is between the price of reports like these and the salary that's paid to the people actually writing them.
I've heard some horror stories with these.
tl;dr Make use of a good union or org to find out what a good salary is and don't get yourself ripped off.
Amen to that. They rip off the consolutant and the customer.
Could you develop on your experiences and what is the missing POV that makes so many HNers be against consultancies?
I refused because of the hallucination issues. But got overruled by the end users - who are going to use these documents. They are convinced that AI will move things faster. When it comes time to using the document they are most likely going to feed the doc to AI and ask for summary and steps.
Write document using AI and then read/summarize using AI.
https://www.deloitte.com/global/en/about/recognition/analyst...
It’s much harder to counter the reasoning word salad that LLMs sometimes produce, where A doesn’t really connect to B but the text insists it does.
And clearly its (almost) everywhere, including companies who should do and know better. AI will make humanity more lazy seems to be the conclusion.
Well fear not, those few who will not be lured by it will stand tall and far apart, and can achieve a lot more professionally and personally in crowds utterly reliant on their tiny little llm helpers. We all choose daily how our lives will look like from now on.
A person who has been in an industry for 10+ years will be fine from exposure to LLM’s. Because they already built the discipline. Frankly if you’re an expert I don’t see where the value of an LLM fits.
People keep talking about productivity increases. But that just speaks to the quantity. What about the quality?
It’s tiresome to see people who just don’t get this.
I stay slightly above my knowledge. I can ask it about concurrency patterns in Go because I can spot the bs.
But quantum physics or molecular biology? It could tell me anything that "sounds" reasonable but is completely wrong and I wouldn't know.
What's wrong with working at Deloitte that is does this to people?
There is a lot of prejudice against consulting. Places like Deloitte, Accenture, are some of the largest companies in the world, so when they fuck up (which they seem previously designed to do, Deloitte was the quest job I've ever had), they fuck up big and very visibly.
But there is a super long tail of consultancies that are basically mom-and-pop businesses offering expertise that other small and medium sized businesses can't afford to keep on staff 100% of the time. It's not just management consulting, there is a lot of consulting for execution in a wide variety of areas. We do our jobs and go away quietly and someone else gets to take the credit. That's pretty much the nature of consulting.
So you never hear about it. You just get the sound bites about McKinsey or whoever charging millions to tell NYC "use garbage cans".
- Find prior consulting products (reports) relevant to my situation. Maybe Deloitte produced a great piece of public advice back in 2007 and AI can style-transfer it to my set of 2025 vocabulary and assumptions.
- What would an average citizen, with access to AI, expect me to do on their behalf and communicate back?
- I meet with a consultant and provide AI with a transcript. It should research a reading list for us.
Well, then ...
The most egregious example of this is where the big accountancy firms offer political parties help in formulating tax policy and once it's enacted then go around charging companies for their expertise on how to comply/avoid the new rules.
https://www.theguardian.com/australia-news/2025/oct/06/deloi...
https://www.smh.com.au/politics/federal/labor-vowed-to-crack...
Why did you include the same article that you're posting on?
But while I'm here .. https://retractionwatch.com/2024/03/04/kpmg-government-repor...
"KPMG government report on research integrity makes up reference involving Retraction Watch founders"
An August 2023 report on research integrity by consulting firm KPMG, commissioned by an Australian government agency, contains a made-up reference, Retraction Watch has discovered.
This will also do nothing to this company.
They were calculating taxes in year when I moved from Europe to US and assigned two people, one for each country. For a month they were not able to make proper adjustments, until I realized they can’t talk to each other. One day I just started conference call from my phone to introduce them to each other and make sure they at least can talk. Nevertheless, in the end they made mistakes that cost me $5000. Luckily I was able to fix it with IRS two tears after
Can we get a refund for all of the others too?
> Anthony _Albanese_ is the name of the current PM of Australia
Which is probably why this Australian publication calls it the 'Albanese Government'. Not to be confused with the government of Albania.
