Since helping to start Strategic Planning Associates in 2005, I've had the opportunity to work on a freelance basis with several other consulting firms (the competition!).  In some cases, the arrangement was made for clients needing services the firm either didn't provide or didn't do well, like employee surveys or communication.  In others, the firms lacked capacity at peak times and needed additional support.  And, on occasion, it takes an outsider's perspective to help pull together a strategy for a client.  Professional service firms partner with small businesses for a variety of reasons.

When I'm serving in the role of helping a client review proposals, I'm frequently asked about the efficiency of these alliances.  Do they suggest that a proposer isn't fully qualified?  Do the arrangements complicate things for the client, especially in regard to consistency and quality of work product?

The short answer is — it depends.  As someone who's been involved on both sides of that equation, I've learned that a lot of variables are involved.  And there are guidelines, clear and subtle, you can use to make decisions in your best interest.

Here are a few things to look for.

Minority Opinion  

In some bid situations, a client awards extra points to small or minority-owned businesses.  Since most responders don't qualify, they frequently partner with firms that do.  I've seen cases where the minority enterprise plays a major role in the assignment, as well as ones where the partnership is struck for "face value" only.

Often, the alliance is for the right reasons.  For example, Strategic Planning Associates (which happens to be female-owned) frequently teams up with the minority-owned firm, Benalytics, to supplement each other's strengths.  Charles Atkinson, the founder of Benalytics, and I had worked together at Buck, and I came to value him as one of the best data and claim analysts in the business.  When our group needs help in evaluating medical plans, or getting competitive bids for other benefit services, Charles is the first person I call.

But, usually, these alliances are struck solely to land a client's business.  They wind up being bad deals all around.  For the winning bidder, a portion of the fee, often a substantial amount, must be directed to a partner, who does little or no actual work.  When I was at a prior employer, I managed a project for a large city in which the minority partner collected 35% of the fee, solely for showing up at client meetings.  We therefore had to complete the job at an unexpected, and large, "discount," which adversely affected our ability to deliver quality work product. 

What's Going On?

The best way to determine whether or not the minority partner will actually add value to you is simply to ask about the nature of the relationship.  On how many projects have the firms collaborated?  What role did each partner play in the engagement?  If the answers are vague, chances are the arrangement is not likely to improve service to you.

You can also find out the specific services each entity will be responsible for delivering.  In our case, as a firm that does a lot of communication work, we partner extensively with several minority-owned printers.  That's because, over time, we've found them to be both more cost-efficient and more responsive to our needs.  And I prefer to work with them not because they're minority-owned enterprises, but because they've been consistent, client-focused, and highly attentive to us.

Other Alliances

Of course, there are many other professional alliances — such as those between specialty consulting firms.  A firm specializing in one service area may partner with one that's strong in another, therefore expanding each company's value proposition.  Our firm provides survey and communication services to some brokers and consultants that lack these resources; we provide strategy and creative services to others that concentrate on technical and compliance services.

Professional pairings like these often provides higher quality, and greater value to our clients than do so-called "turn key" services provided by larger firms.  Why?  Because large firms manage their service lines as independent businesses.  Quality, responsiveness, and even professional standards aren't uniform across service lines.  In addition, each practice is responsible for its own profitability.  In some cases, work is viewed not as opportunities to help a client address an important organizational issue, but as an opportunity to generate revenue for specific lines of business.  I've even seen practices fight over revenue allocation, with little regard (if any) about how the skirmishing might affect focus on, and service to, the client.

You can determine which type of service arrangement is best for you by grilling proposers on how the different specialty areas work together.  Whether the finalist is a large company or two aligned small companies, the issues are the same.  Ask for specific examples of cross-disciplinary engagements.  Then drill down on (a) what the team did to identify the client's needs, (b) how they conducted the assignment (was it a true team effort, or did each practice work independently?), and (c) the results/outcomes for the client.  In this latter case, be sure to get key details, such as savings produced, efficiencies enhanced, and the ultimate "return" (dollars spent vs. dollars saved) for the client.  If the proposer fudges on any of these inquiries, you should view it as a "red flag."

Who's In Charge?

Often, clients fail to be assertive enough with their providers.  One of my clients uses a large, brand-name outsourcing company, and is reluctant to challenge them about unreasonable requests or push back on uncomfortable deadlines.  Another routinely approves the medical vendor's rate requests each year, without question, demand for accountability, or even a request for data to confirm whether the increases are justified.  ("I'm afraid they'll drop us," the benefit manager explains.)

The fact is that, as the client, you are in charge of the relationship.  Your vendors may think they work for the company that signs their paychecks, but the reality is they serve your organization at your pleasure.  If you have a question, ask it.  If you want additional documentation, request it.  And, if you're not satisfied with something you're told, challenge it.

In selecting a consultant, learn all you can so you can protect your interests.  Large companies can be efficient, or they can be a money pit.  Small-company alliances can be great, or they can be a disaster in the making.  Either way, it's up to you to determine the difference — because it's you who is in charge. 

After all, in the end, it will who either reaps the rewards of a good decision — or has to provide justification for a bad decision.