One on One with Waite Associates' Thomas Waite

There is no doubt that this recession has been both brutal and prolonged for many consulting firms. And Thomas J. Waite, President and CEO of Waite Associates, should know. He's on the front line, advising the leadership teams of consulting firms on how to improve their market position. That's a difficult task, given that in today's environment revenues are declining, billable hours are falling, clients are slower in paying, and, as a result, partner incomes have dropped and scores of consultants and staff have been laid off. Consulting's One-on-One sat down with Waite to discuss why he thinks a recovery may be sooner than most think and what firms should do in the meantime.

Consulting: For consulting firms, what's the good news? Waite: Some firms, of course, are already faring better than others. For example, those focused squarely on government work are weathering the storm fairly well. Others have been adept at capitalizing on new opportunities. According to Business Week , The Boston Consulting Group is getting paid $7 million from the government for its work on both GM and Chrysler. For the rest of the profession, there are positive signs that the worst of the downturn could be behind us. According to the Bureau of Economic Analysis, businesses have slashed production at a much faster rate than overall demand has dropped. When inventories come into better balance with sales, companies start ordering again, which sets the stage for growth.

Stocks have steadily climbed higher, cheered on by a sharp increase in consumer confidence. The Conference Board reported that its index of consumer confidence for May jumped to its highest reading since September. The Economic Cycle Research Institutes' Weekly Leading Index—which tracks future indicators for sales, jobs, income and output—has been rising every month since December. Better yet, the Institute is forecasting that an economic upturn is finally in sight. In 16 of the last 17 U.S. downturns, a climb like this was followed by a recovery in about four months.