Ethics in professional consulting

It is not always the first thing on the organizational agenda. But, having been described as there to
help ‘identify and solve managerial and operating problems of the various institutions of our society’,
consultants are bestowed with a considerable amount of trust and responsibility. Ethics should
therefore be at the forefront of any professional consultant’s (and their firm’s) minds and actions.

Not all situations lend themselves to being easy ethical decisions. In the past, I have found myself
having to question the actions or requests of others from time to time, whether it is on a piece of
work we are delivering, how we are selling work, or our approach. At times we could find a conflict in
what we are contracted to deliver and the “next piece of work”.

Making the right decisions

These ethical dilemmas are commonplace and to help us in navigating these, Michael Davis provides
a seven-step guideto ethical decision-making that should be adopted by the consultant and the
organization alike:

State the problem – what is it about the situation that creates discomfort, presents a conflict of
interest or ethical dilemma?

1. Check the facts – what are the root causes of the issue? Do these still hold true and
therefore is it still an issue?

2. Identify relevant factors – what are the internal and external contributors to the issue?

3. Develop a list of options – find ways and people that can help solve the issue – the more
creative and imaginative the better – as long as it doesn’t lead to another ethical dilemma.

4. Test the options – use these tests to ensure the solutions are appropriate:

o Harm: will this bring less harm than any other option?

o Publicity: if published in the Sunday Times, will it be okay?

o Defensibility: would this option be defendable in front of a committee?

o Reversibility: is this still a good option if the consultant or organization is negatively

affected?

o Colleague: what is the response of objective colleagues with this option?

o Professional: how would this option be seen by the CMI’s Ethics committee?

o Organization: how would NTT DATA’s ethics officer and legal counsel react?

5. Make a choice – understanding steps one to five, decide and act on the best route forward.

6. Review steps one to six– limit the propensity of having to make these decisions again and
learn from the process.

It is critical to drive the correct culture from the onset – the recruiting process – and then
consistently drive the desired culture from the top down. Leadership can therefore be challenged
to choose between revenue and ethics.

A good example is that of data protection and integrity. As remote work and globalization become
more commonplace, professional consultants need to be acutely aware of how data is accessed and
transferred across jurisdictions, and whether this is acceptable legally and in line with the client’s
policies.

Navigating ethical dilemmas

This is a critical skill set needed for all professional consultants, due to the raft of situations where
ethics will be challenged – challenges that become more high-risk and prolific the more senior in the
organization the clients are. To deal with these challenges, it is important to always refer to one’s
moral compass, which should be closely aligned to that of the organization.

There needs to be a broad-based, conscious adoption by professional consulting organizations to

be the guardians of ethics when advising clients, in the same way auditors are intended to be for
financial reporting.

In Search of the Moral Manager, Archie Carroll presents a valuable framework outlining the essential
characteristics of moral management (see table below).

Immoral management often results from overtly selfish intentions, and not taking the client into
account. Although actions may be within the law, they may be designed to find gaps and
opportunities to exploit the client’s weaknesses and focus on those, and not what is in the clients’
best interests.

Amoral management is when a firm needs to develop a product or service, but doesn’t have the
funding to do so on their own. Rather, they engage with their client, selling the output as proprietary
(often for a limited time), on the premise that they pay for the development and tolerate delays that
are often inevitable.

Mental and physical health, moral standards and personal values have taken priority; these areas
are therefore clear focuses for organizations who wish to operate more ethically and enhance the
experience for staff and clients alike.
Managing Client Expectations Responsibly
Managing client expectations responsibly is a key ethical practice in consulting, as it builds trust and
fosters a sustainable, collaborative relationship. Here are some key principles and practices for
managing client expectations ethically:

1. Transparent Communication
Setting clear, honest expectations from the beginning is essential. Consultants should
communicate what they can realistically deliver, including timelines, potential challenges,
and the level of involvement needed from the client. Avoiding overpromising helps ensure
that clients understand the scope and limits of the project.

2. Commitment to Feasibility
Only commit to what is feasible given the client’s resources, timelines, and the consultant’s
expertise. This includes an ethical duty to assess the client's objectives critically and suggest
achievable goals. Consultants should advise clients of any potential limitations and set
milestones that reflect a realistic trajectory toward success.

3. Regular Progress Updates

Keeping clients informed about progress and any potential deviations from the plan is
crucial. Regular updates prevent misunderstandings and help clients adjust their
expectations as necessary. This also includes informing clients promptly about any setbacks
or delays, explaining the causes, and outlining steps to address them.

4. Accountability and Ownership

Consultants should take responsibility for their recommendations and work. If something
doesn’t go as planned, it’s important to address the issue with honesty and propose
corrective actions. Owning up to mistakes and showing a commitment to solutions can
reinforce trust and demonstrate a dedication to the client’s best interests.

5. Managing Scope Creep Ethically

Scope creep—where additional tasks or changes are added without formal agreement—can
strain resources and lead to unmet expectations. Consultants should discuss the impact of
any requested changes transparently and obtain client approval before proceeding. This
ensures that both parties have a mutual understanding of the expanded scope and potential
costs.

6. Educating the Client

Often, clients may not fully understand the complexities of the work involved. An ethical
consultant will take the time to explain the process, risks, and methodologies used. This
empowers clients to make informed decisions and aligns their expectations with the realities
of the project.

7. Setting Measurable Outcomes

Clearly defining measurable outcomes for success helps clients understand the project’s
progress and value. When both parties agree on KPIs or success metrics, it minimizes
ambiguity and keeps expectations grounded. It also allows the consultant to demonstrate
accountability for specific results.

8. Boundaries and Professionalism

It’s essential to maintain professional boundaries and avoid becoming overly influenced by
client demands, especially if they conflict with the consultant’s ethical standards. Being
 willing to diplomatically refuse requests that could compromise the quality, integrity, or
ethics of the project demonstrates a commitment to responsible consulting practices.

9. Ethical Client Education on Risks

Consultants have a duty to inform clients about any risks or limitations associated with
proposed solutions. Ethically, they should clarify any assumptions and limitations in their
recommendations, empowering clients to make fully informed decisions without unrealistic
expectations of guaranteed success.

10. Continuous Ethical Reflection

Consultants should continually reflect on their practices to ensure they are upholding ethical
standards. This might include soliciting feedback from clients and peers or adjusting practices
to improve transparency and honesty. Remaining self-aware and committed to ethical
integrity reinforces a strong, trust-based client relationship.

By responsibly managing client expectations, consultants ensure that their clients understand both
the potential and the limitations of consulting engagements. This ethical approach builds long-term
trust, enhances client satisfaction, and preserves the consultant’s professional reputation.

Confidentiality and Intellectual Property Rights

Intellectual property (IP) refers to the legal rights that are granted to individuals or businesses for
their creations or inventions. It encompasses a wide range of intangible assets, including patents,
trademarks, copyrights, and trade secrets. These rights provide protection and exclusivity, allowing
the creators to control and profit from their innovations. Understanding intellectual property is
crucial for both individuals and businesses as it plays a significant role in fostering innovation,
promoting creativity, and safeguarding the interests of creators.

Intellectual property rights in consulting agreements serve several critical purposes. Firstly, they
ensure that the consultant retains ownership of their creations and inventions, allowing them to
leverage their intellectual capital for future projects or business endeavours. Secondly, these rights
protect the client's interests by granting them exclusive use and control over the intellectual property
developed specifically for their project. This prevents the consultant from sharing or selling the same
intellectual property to competitors or other clients.

Key Considerations in Intellectual property Ownership

When negotiating consulting agreements, it is vital for both parties to clearly define the ownership of
intellectual property. Ambiguity or oversight in this area can lead to disputes and complications
down the line. Some important considerations include:

A) Scope of Work: Clearly outline the specific intellectual property that will be created or developed
during the engagement. This may include software code, algorithms, business processes, or creative
content.

B) Ownership Transfer: Determine whether ownership of the intellectual property will be transferred
to the client upon completion of the project or if the consultant will retain certain rights or licenses.

C) Non-Disclosure and Confidentiality: Ensure that the agreement includes provisions to protect any
confidential information shared during the engagement, safeguarding trade secrets and proprietary
knowledge.

Different Types of Intellectual Property Rights in Consulting Agreements

1. Copyrights: Copyrights protect original works of authorship, such as literary, artistic, and musical
creations. In a consulting agreement, copyrights may be relevant when the consultant creates
written reports, designs, or software code for the client. The ownership and usage rights of these
copyrighted works should be clearly defined in the agreement. For instance, the consultant may
grant the client a non-exclusive license to use the copyrighted material for a specific purpose, while
retaining the copyright ownership.

2. Trademarks: Trademarks are distinctive signs, symbols, or logos that distinguish goods or services
of one party from those of others. In consulting agreements, trademarks may be relevant if the
consultant is involved in branding or marketing efforts. For example, a consultant may be hired to
develop a new logo or slogan for a client's product. It is essential to address the ownership and usage
rights of any trademarks created during the consulting engagement to avoid disputes in the future.

3. Patents: Patents protect inventions and grant exclusive rights to the inventor for a limited period.
In consulting agreements, patents may be relevant when the consultant contributes to the
development or improvement of a product or process that may be eligible for patent protection. The
ownership of any patentable inventions should be clearly addressed in the agreement. In some
cases, the consultant may assign the patent rights to the client, while in others, the consultant may
retain the rights and grant the client a license.

4. Trade secrets: Trade secrets are confidential and valuable information that gives a business a
competitive advantage. In consulting agreements, trade secrets may come into play when the
consultant gains access to the client's proprietary information or trade secrets during the
engagement. It is crucial to include provisions in the agreement to protect the confidentiality of such
information and restrict its use or disclosure by the consultant.

5. Know-How: Know-how refers to practical knowledge, skills, and expertise acquired through
experience. In consulting agreements, the consultant's know-how may be a valuable asset for the
client. The agreement should address the ownership and usage rights of the consultant's know-how,
especially if it is unique or specialized. The client may seek to obtain a license or exclusive rights to
the consultant's know-how to ensure its continued availability and use.