DATE: January 16, 2009
TIME: 9:30AM – 11:00AM
SPEAKER: Dr. Jeffrey MacKie Mason, Associate Dean for Academic Affairs, School of Information, Arthur W. Burks Collegiate Professor of Information and Computer Science, Professor or Economics and Public Policy, University of Michigan
TOPIC: Consulting
NOTES TAKEN BY: Devan Donaldson

His Experience as a Consultant:

Jeff started consulting work as a graduate research assistant while at MIT.

His consulting work dealt with economic anti-trust and energy economics issues.

In one case for DuPont, research from this turned into a journal article. It is less common that consulting work turns into journal publishing opportunities, because, a lot of times, consulting deals with confidential information and usually one case in particular—which doesn’t allow you to publish results or is not large enough in scope to warrant journal publication.

All of his work is for private clients, i.e. corporations, class actions on behalf of consumers, etc.

Rise of Reputation/Business:

Jeff became an expert by having experience in successful cases for which he was a consultant. Continued success led to him being sought after by others who wanted to benefit from his expertise.
What began as a side for job for Jeff grew into a business of which he was the sole proprietor. The first case he did alone went to trial and won. The trial ended up going to the Supreme Court. This positive publicity led to more opportunities for him to do consulting and, in part, led to the expansion of his consulting business.
His consulting workload averaged a steady flow of one or two cases, each of which normally lasted for about two to three years.

He was able to hire graduate students as research assistants.

As time went on, he got bigger cases, which required more people, i.e. a case he got against Microsoft.
The volume of large cases necessitated expansion of the company to a LLC, sharing proprietorship with three other experts who work in Ann Arbor, MI. The company, ApplEcon, is housed in the top two floors of Harris Hall and currently has 18 full-time employees.

Jeff focuses his consulting work on issues of technology; past/current clients include; HP, AT&T, IBM, Compuware, Electronic Arts, etc.

Jeff only takes cases he’s interested in.

Why Consult?

1) Intellectual benefits
2) Real-world experience
3) Entrepreneurial experience
4) Managerial experience
5) Money – (the money can be good, but remember, just because you open up a consulting firm does not automatically mean you’ll make money)

Overall, Jeff warns against letting money be your primary motivating factor for getting involved in consulting or starting a consulting firm—primarily because it’s not worth the hassle. He recommends doing consulting because you get something out of it intellectually as a primary motivating factor.

Sacrifices

1) Your time (consulting is a time-commitment with unpredictable demands on your time because of the nature of the work and the parties involved. For example, in anti-trust consulting, your schedule is dependent upon the court system—which has no regard for your personal schedule.)
2) You give up sleep
3) You give up vacation time
4) You give up time with your family

Advice

1) Prioritize—Let what do you want to do and what you want career-wise to govern how you move forward.
2) Once you decide what you want to do and how you want to do it, keep a focus!
3) Always keep the mission/your mission in mind. This will allow you to make decisions more quickly.
4) Think long term! Weigh long-term considerations when making decisions.
5) Think about what’s important to everything you’re doing. In Jeff’s example, successfully attaining tenure was important to his career as an academic, but also very favorably affected his credibility as a consultant. Thus, making sure he did everything he needed to do to get tenure helped out both of his jobs.
6) Conflicts of interest—if it turns out you have them, it doesn’t automatically mean problems for you. You must make sure, however, that you manage them well! There are several different types of conflicts of interest: 1) time—as part of having a full-time position as a faulty member at a university, your contract might limit the amount of time you can devote to other activities. Make sure that you familiarize yourself with your school’s policies regarding this. Also, remember that the school is trying to help its faculty to not become over-committed. 2) competition—make sure the activities and services you are providing elsewhere do not compete with the activities and services of the university by which you are employed. Otherwise, this could constitute a conflict of interest. 3) In your role as a research assistant adviser – make sure your interests don’t interfere with your research assistants’ academic progress. For example, you might not want them to leave because they do good work, but they need to graduate—whether you want them to leave or not! Make sure you’re not exploiting students just because you may be in a position to provide funding and support for them.
7) Make sure you manage relationships with your colleagues in academia well, even if some of your colleagues might misinterpret your reasons for working both as a professor and consultant. Sometimes misunderstanding and jealousy can arise, but remember to manage your relationships well because your colleagues most likely will remain your colleagues for a long time.
8) Your work as a consultant can reflect well on the University, so manage the work that you do as an academic and the work that you do as a consultant well.
9) Be careful what you write! Make sure something you say cannot be used to come back to haunt you, no matter how harmless you may think it is at the time. Don’t say anything you don’t mean, and make sure you’re very careful in articulating what you mean.

Integrity:

Rule of thumb: Make sure you aren’t engaging in any activities in your role as a consultant that you wouldn’t feel comfortable sharing with your Dean or Department Head.
Make sure you’re making decisions out of honesty as opposed to just saying or doing things to make your clients look favorable because they are paying you.

Jeff says that at ApplEcon they only take cases where: 1) they think their clients are on “the right side”, and 2) the outcome of the case will make a difference in society.

Answers to Questions/Statements from Doctoral Students:

The issue of time-constraint on hours for outside activities can be managed in a number of ways; 1) sometimes people don’t work on consulting some weeks, and during other weeks, focus on consulting more, 2) sometimes people with 9-month appointments can use time during the summer months to focus on consulting, 3) sometimes people take leave/sabbatical to focus on consulting. 4) sometimes people reduce their university contracts (i.e. reduce their hours of obligation to the university and pay) such that they are allowed to devote more time to outside activities (i.e. to start up a company). It all depends on your situation.

More on conflicts of interest: You have to be careful when using university resources. For example, if you develop software for research you are doing on behalf of the university, you cannot go off and make money on that invention without the university. There are intellectual property issues to bear, and you need to make sure those considerations are appropriately sorted out before moving forward.
Universities typically have a share in patents and innovation, so you need to make sure you’re abiding by proper university guidelines.

The Range of Consulting:—1) Advice to people on how to run their business(es), 2) product consulting, 3) managerial consulting, 4) technical consulting, 5) non-profit consulting, etc., 6) People might want to hire you to help them learn how to do something.

If you want to be a consultant and you know you want to be one, here’s what you should do:

1) Develop your reputation, and then the people come to you
2) The university will help you—put your info in a specific database, list your expertise, and people will contact you based on their needs
3) Some firms act as matchmakers; the idea here is you tell a firm that you want to be a consultant, list your expertise, and they match you with the appropriate consulting firm. Be careful with which firm you deal with to play matchmaker for you because some firms exploit people who don’t know the business.

How much money should we be asking for if we want to begin consulting now?

You should be compensated at least as well as you are now. Because GSRAs including tuition, insurance, etc. cost about $50,000/year, you should be making at least that much, or better, as it would relate to an hourly wage.

Beyond the monetary benefit, sometimes the real benefit of consulting to you could be the access you could get to information, i.e. data sets, that you wouldn’t ordinarily have access to.

In terms of testifying—even if lawyers on the other side try to make you look bad, just continue to be honest and maintain your integrity. It might be their job to make you look bad (so that they can win the case) but just do what you know is right.

What skill set do you recommend?

In Jeff’s case, the skill set needed for consulting is identical to the skill set needed for academia. People hire him for his expertise and research skills. In other cases, like technical consulting, the skill sets between academia and consulting may be more divergent.