Negligent Consulting Advice

A management consultant was hired by the president of an auto parts distributor to help the organization with staffing, budgets and executive decision making. The consultant implemented a reorganization strategy that redefined management roles and delegation, initiated spending controls and used a new staffing model to address the organization’s needs. However, eighteen months after the reorganization, the client alleged that the spending control solution and staffing model had a negative impact on its bottom line when the expense of hiring and training new employees was accounted for. The client sued the management consultant for negligence in rendering a flawed solution to its problem, seeking compensatory damages including, but not limited to, lost profits. Total Cost: $225,000.