Open for business: consultants are not the exclusive property of corporate America. School districts are spending millions of dollars to tap into their expertise. Are the costs worth it?

Would you pay someone to tell you what to do? This millennium, K-12 administrators are increasingly answering in the affirmative.

The education market makes up nearly 40 percent of the consulting practice at McConnell Jones Lanier & Murphy in Houston, Texas. The Oakland, Calif.-based opinion research firm Evans/ McDonough has seen its clientele shoot from one or two school districts per year around its 1992 launch to a dozen today. Nancy Sulla, president and CEO of IDE Corp. in Ramsey, N.J., meanwhile, knows too many clients, not enough time can be a consultancy's downfall--so she put a cap on growth when she started the education-focused business in 1994.

Lonnie Palmer, director of AdvisorySolutions, a new consulting division at the New York State School Boards Association in Latham, N.Y., saw this coming when he retired from his superintendent position in April 2003.

"There will be a lot of rookies needing help at a time when No Child Left Behind has piled onto state education departments across the country," Palmer says. "And in [district] business offices, we have a number of folks with a CPA who have never worked in a school district, so they need some coaching and mentoring support."

The association bought that argument and accepted Palmer's proposal for a new branch to focus strictly on fiscal consulting among its members. The need was there. Palmer anticipates signing 40 contracts for $550,000 in consulting services in 2005.

"You bring us in for a short period of time, and when we're done you can throw us out. And we're not locked into tenure so if we don't do a good job, you can throw us out," Sulla notes. "A consultant doesn't become part of the culture and therefore can see things more objectively. We don't get caught up in the politics."

Palmer's market research of superintendents, business officials and school board members reveals that most administrators put financial services at the top of their help lists: anyone who can help them enhance revenues, increase efficiency or reduce taxes piques their interest. Even the second place winner--benchmarking, or seeing how your district's academic and financial performance stacks up against a neighbor's--is a spin off of the number one need.

With money and budget actions at the root, MJLM formally offers to peer into myriad areas in any school district: organization/management, educational service delivery, personnel management, facilities management, food service, transportation, purchasing/contracting, technology, public relations, community involvement and safety/security.

"Do we guarantee that we will find ways to lower costs? No, but we do almost always find ways school districts can streamline their operations and save money," assures firm partner Sharon Murphy.

That kind of promise is enough to keep the district business coming.

Wanted: Expert guidance

For the firm Evans/McDonough, polling for dollars is the big sell. In California, school bonds need a 55 percent voter approval and property tax increases a two-thirds agreement, so experts like Ruth Bernstein scientifically measure to see if a school district's plea stands a chance with the public.

"We don't just dump a bunch of numbers on them, and we won't tell the district where to spend the money. But we do work with them on what the numbers mean and how to communicate based on that feedback," says Bernstein, a principal at the firm.

And because consultants usually explore ways to make or save money, one size fits all in the K-12 world. Murphy has worked with enrollments as small as 80 students and as large as 210,000. Although, Sulla has found one sizeable difference: the inherent bureaucracy in districts with more than 10,000 enrollment can box her in at a lower level. "The more administrative layers, the more likely it is that a consultant's work can get lost or not taken advantage of. The superintendent may not even realize there's a consultant out there working on a issue," she notes.

When there are big numbers at stake, however, it's almost impossible to miss the consultant's impact. In 2003, for example, as St. Louis Public School District faced a $90 million budget deficit, Murphy's pencil marks on the books freed up $33 million. Dallas Independent School District also called on consultants at her firm, to compile a comprehensive review of where it stood to greet a new superintendent--a road map to improving areas that weren't efficient and keep his mitts off what wasn't broken.

The experts can also be called to zero in on what's missing from the budget books. Palmer's experts uncovered $229,000 in unclaimed state aid for one small, rural New York district--a common oversight caused by reporting forms that are "your income tax form times 100 in complexity," he says. The consultants then trained the district's staff on how to avoid similar misfilings in the future. And because AdvisorySolutions charges on a contingency basis for this service, the district only had to shell out a small percentage of its found money.

Of course, not all consulting help is so neat and tidy. Another AdvisorySolutions client was pulling $500,000 annually from its academic program to subsidize food service. Palmer's group recommended ways to stop the bleeding and make the program self-supporting.

But the district nixed the ideas. "In fact, they were a bit upset," Palmer notes, over the subsidy being seen as a problem at all. Ultimately, this academically underperforming district cut back on its kindergarten program instead. "They'll face the same financial pressures again," he adds. "And at some point there will be different leadership that will take a different look at that issue."

Likewise, school administrators in another district approached Bernstein to feel out residents on a $180 a year per household tax increase proposal. The feedback that flooded in suggested they were crazy. "We told them it could pass at $50, but they didn't think that was worth their time. So they put a high amount on the ballot and lost," she says. State rules required the school district to share in the cost of that election, so that stunt cost the district several hundred thousand dollars for nothing.

Meanwhile, a small school district in the Bay Area actually footed the bill for that much for a special election, since polling results from Evans/McDonough showed they had an ability to win their funding plea. In fact, the pre-numbers were so strong, the district successfully used them as a springboard to convince parents to contribute half of the voting costs out of their pockets.

Whether it's via a public opinion poll or a look at the budget books, a consultant's findings are not often a surprise.

"Rarely do we go into a school district and management doesn't know these patterns and trends exist," Murphy says. "That's why they contacted us in the first place. They're just in a little over their heads in an area where they don't have an expertise."

Outsider expertise

Indeed, some areas staffers simply can't handle. For instance, when it comes to polling, scientific results require a specialized touch in writing the questions. Otherwise, you might have effective telephone outreach but no reliable data, says Bernstein. "And if your parents or teachers do the interviewing, it's hard to stay impartial when someone says, 'No, I don't want to pay for that,'" she adds. That's why the phone work is part of the deal with this firm.

Pedro Garcia, director of schools for the Metropolitan Nashville Public Schools, keeps his administration costs to less than 1 percent of his budget, so when anything crops up outside those job boundaries, he calls in the consulting cavalry. To date, he's sought outside advice on everything from saving money on electricity and phone usage to overhauling office practices. Still another firm rewrote the employee manual, while another developed new job descriptions.

He has a friend in Cheryl Crates, the chief financial officer for School District 300 in Carpentersville, Ill. She even hired assistance for her team when they were charged with writing bid specifics for a new business office software system.

"The staff only knows what they have; they don't know what they don't have," she reasons. For example, they didn't realize software today is Web-enabled to the point where they could streamline everything from purchasing to payroll. "On our own this research would have taken years," she admits. The consultant timeline? Eight months.

"That's not to say we don't have ideas among our staff," says Sandra Mossman, superintendent of Clear Creek (Texas) Independent School District, located just outside Houston. "But are they the best ones? I firmly belong in the camp that says you learn from others. There isn't an area where I wouldn't consider enlisting a consultant's aid."

Nuts and bolts 

The consultant approach becomes doubly attractive when school executives realize these fees typically don't fall in the administrative cost column--an area communities and government bodies are trying to put a lid on. Instead, many consultants draw their paychecks from the operating budget, and occasionally from capital improvement dollars.

And while a majority still work on an hourly basis, Sulla's IDE Corp. and other firms are introducing a flat pricing structure. "I never liked the lawyer scenario where you spend 10 minutes on the phone and it costs you X," she explains. "So we build our fees around the fact we know pretty much what kind of offsite support is required, [and] then we spread the invoices out across the year."

Sulla doesn't tie districts to a contract either. That way, if a new superintendent wants to halt the project, everyone happily goes on their way. "We don't want to force anyone into working with us," she says.

Still, most districts hire their consultants using the familiar bid process. On the plus side, it allows administrators to pour over several different approaches to a particular problem and decide which method suits their style. Comparing credentials and price in one swoop can help, as well. Murphy doesn't blink at this competitive route on the first go-around, but she advises administrators to save the learning curve and flat out hire these same consultants for subsequent reports.

Nor does Pearl Iizuka let bids stand in the way of a good contract. There's no sense in taking the lowest bid if a firm won't agree to her terms. This deputy superintendent of business services for Palos Verdes (Calif.) Peninsula Unified School District specifies that her consultants take on liability insurance as protection, should the district be sued based on the firm's work.

Across the country in Florida's School District of Hillsborough County, chief business officer Mike Bookman insists on a performance bond. Should the consultant not produce to Hillsborough's satisfaction within the prescribed period, it will reimburse the school district for the entire value of the project.

Garcia's empowerment management style means he lets the team or department working with the consultant decide whether to accept or shelve consultants' recommendations. "I don't recall one where I've said no," he reports. "Maybe if something had an excessive cost or timeline ... but they haven't brought me anything ridiculously expensive or too long."

In some districts, the board picks through the details and calls the shot. Murphy's role in these politics, she insists, is to make the ultimate answer painless.

"Our job in getting school districts to take our advice is to come up with well-supported and well-documented findings based on operational data," she says. In other words, she presents scientific proof to make a compelling argument. By her estimation, school districts accept 85 percent of MJLM's blueprints.

"We're not looking to offend our [association] members, and we're not looking to put superintendents and business officials in a defensive position because, to be honest with you, sometimes our advice is, 'You could be doing better,'" Palmer notes. "If you're a brand new superintendent, you want to hear that. If you've been there a while, it's not exactly good news. So we try to be team players. A lot of it lies in how you work with people, not so much the advice you provide."

The softer side

There is some bad news for districts: School administrators say to a man that you don't give up a jot of control when you bring in a consultant. Good consultants don't "end up doing the district's work. They move the district in the direction they need to move," says Sulla. So any blame in the aftermath of a decision falls on the district.

Iizuka compares consultants to assistants--that is, as long as they aren't forced on her. But, as Cincinnati leaders learned this spring, rocky politics between city officials and the school board can turn consultants' presence--and probing questions--into a bone of contention. The two sides reportedly spent approximately two months squabbling over simply turning over the requested financial audits, budget manuals, organizational charts, board meeting minutes and operating budgets to a commission-appointed consulting firm.

And that leaves officials like Bookman of Hillsborough County in a pickle. When consultants impose on him, he smoothes the process by explaining the benefit to the employees involved. In other words, if a staffer is scared of having a program or activity chopped, he points out that, "by eliminating this program, some of the extra paperwork being opposed on you will go away" or "if we don't have all these people on the payroll, that provides additional discretionary money to pay additional benefits."

"Let them know what's going on, why, who is coming, what to expect, and I don't see where there's a problem," he contends. But just as a back-up, he also gives his staff a road map of who to see for conflict resolution should the staffer and consultant lock horns.

Likewise, Garcia ran into thorns when his consultants began asking questions for the job description revamp. The teacher's union griped that teaching was a generic job description that didn't need this kind of scrutiny. He eventually agreed, and asked the consultant to back off. "As long as people are involved, they seem to be OK [about the consultant's presence]," says Garcia. "It's when they're trying to guess and rumors are flying--then it becomes a whole issue."

Administrators should expect the consultant to approach people respectfully, as well. Murphy does her part by referring to her school district visits as "management and performance reviews" rather than "audits." She explains, "Audit sounds scary, and we don't want this to be a scary proposition for school districts," she notes. In the field, she softens her conversations with staffers by using non-threatening positions like "I see these trends here. Am I interpreting them correctly?"

Even when the situation is sunshine and roses, communication makes or breaks the results. Sulla advises administrators decide exactly why they're hiring this consultant: to speak for you or to you. When the consultant is your voice, that person is the outsider who comes in to present compelling evidence about a new direction. Consider it the modern version of "a prophet is never welcome in his own country" motto.

Or, administrators can choose to keep the bullhorn and the leadership it bestows, hiring the consultant to help steer the curves and bumps in the road. In School District 300's situation, this path meant the consultant helped Crates define who should be on a research committee, how often that committee should meet and what their tasks should be. The expert held committee members' hands as they wrote the bid, and then evaluated the choices and made the final selection. "But [the consultants] didn't make that choice. We did," she emphasizes.

No matter what the language, the business outsider gives insiders a chance to be heard. As Iizuka notices, many employees feel too intimidated to bring their ideas to the brass' offices, but they'll whisper a few tentative suggestions to a consultant. A lot of the ideas she implemented from a technology audit actually stemmed from the district's crew.

"Hiring a consultant is not a sign of weakness," Sulla points out. "I've had clients say, 'I need you here because my principals aren't that talented, but if they were good, I wouldn't need you.' My response is you always need me, because the outside perspective I bring you can't have inside the district, no matter how talented you are."

Forming a District/Consultant Duo

Consultants rarely meet a job they wouldn't take, so the responsibility for a match made in heaven lies with the school district. You know, of course, to check references. But here are tried-and-true tactics to help you dig far deeper:

* Don't assume you know how the consultant will tackle the task. Ask specifically what steps he anticipates so that you find out before you hire him that he insists on pulling teachers out of school for five days straight.

* Ask good questions up front, such as:

--Do you see this as a long-term position? If the consultant wants to take up residence, that's an outsourcing position, points out Nancy Sulla, president and CEO of IDE Corp. You want to hear an end date.

--Have you done this kind of consulting work before? It's one thing to solve a problem as an experienced business official or superintendent and another ball of yarn entirely to serve as a consultant, says Lonnie Palmer, director of the New York State School Boards Association's AdvisorySolutions.

* Weigh the expert's past work with inquiries like "Why did you recommend this?", "What is this method's success record?" and "Where have you implemented this before?"

* Watch videotapes of candidates' public presentations. These folks may need to handle themselves in front of an unfriendly crowd, say things your parents don't want to hear and do it with humor, clarity and respect.

* Level with the consultant on what you want to discover and what the budget can afford, and then gauge the reaction. The trick is not to be so specific that you paint your consultant into a corner where he or she can only confirm your assumptions. Pearl lizuka, deputy superintendent of business services for Palos Verdes (Calif.) Peninsula Unified School District, keeps it simple: "We can't go outside these boundaries and our budget is capped at X."

* Pay attention to personality. An expert who comes "across as a know-it-all who wants to tell everybody how to do their job [isn't] going to be a very good consultant," says Palmer. "A consultant has to be a teacher and a coach--not somebody you feel is the enemy in the room to make you feel bad."

A New Twist on Consulting

School districts in San Diego County would be budgetary fools to hire a business consultant to address their evolving issues. That's because Rudy M. Castruita, the county superintendent of schools, pays an internal staff of business consultants to be on call for his 42 districts.

It began 11 years ago when Castruita joined this California system and took to heart his charge to see that the districts under his wing remain fiscally solvent. He requires each district to make sure it's not only financially sound but also that it keeps a 2 percent reserve. Should a district begin to slip, the quarterly reports sound the alarm, and the county team of consultants rushes in to help those folks work through the process of righting the ship.

"I show them the numbers I need to see, and how they get there is their prerogative," he says. The system doesn't fall prey to usual arguments that staffers can't be objective, he contends, because he holds the oversight power to place these districts on probation should they fail. "They may have to cut staff, they may have to cut programs--that's not the decision I make. The local school districts are in charge there."

The districts get a good bargain, as the business consultant's evaluation and advice costs them nothing. Smaller districts have especially come to lean on this service, Castruita reports--and he readily complies, sending a consultant to camp out in the district or make presentations to the school board. Then, if there's a suggested funding cut or other bad news to deliver, Castruita makes a point to deliver it in person himself.

Julie Sturgeon is a contributing editor.