Hired Guns?

In today’s blog entry on David Maister’s site, he discusses the issue of consultants as “hired guns”. Is there any way for a large firm to maintain ethical standards, as a firm and as a group of individuals? Whose ethical standards should they uphold? Are individuals who would otherwise be ethical or at least true to their own values, compromised once they work for a larger firm?

I believe that a very good explanations for this phenomenon (larger firms becoming immoral or amoral) is taught in the seminar, “Leading Professional Services Firms, ” in Harvard Business School’s Executive Education program.

Here, the professors espouse three main priniciples for professional services firms:
1)Partnership structure is ideal.
2)Small is beautiful.
3)Organic growth is superior to growth by acquisition.

When a professional services firm strays from these principles, they run the risk of sacrificing the values, culture, code of ethics and requirement to put the client’s interests above theirs that is inherent in being a “professional.” A corporate structure, for example, causes the firm to focus on financial results and meeting shareholder expectations rather than meeting partner expectations within the constraints of the values, expertise and professional code of ethics that the firm agreed on when it came together.

Growing too large or acquiring firms that may be very different in values or culture, even within the partnership model, can also stretch the limits of aligned behavior.

There is an interesting corollary to the “Poor me, I’m a firm that has to prostitute myself in order to make money,” ethical challenge. When a firm strays from the professional services firm principles above, temptations to take advantage of clients and conflict of interest issues can also develop. Unethical activities like the recent T&E overbilling/non-disclosure scandals in the Big 4 are a case in point.