When is a new consultancy not a new consultancy? Perhaps when it's the product of many years of both experience and long-term planning. Jess Varughese, managing partner of New York-based Milestone Advisory Services, has an extensive history in mergers and acquisitions with KPMG, and between Varughese and Milestone's other two partners, Konstantine Kostakis and Peter Bond, Milestone's leadership has more than 50 years of capital markets and wholesale financial services expertise. How is the nine-month-old firm different? Varughese points to a number of factors, including its completely independent nature and its market-focused philosophy, adding, "We like to take pride with that we're different from the typical consulting firm in that we're not all about consulting speak and mounting presentations. Everything we do is focused on that ultimate deliverable for our client." To learn what else makes Milestone special, Consulting recently spoke with Varughese. Consulting: How did Milestone come to be?
Varughese: The partner team at Milestone—Konstantine Kostakis and Peter Bond—has been with me for about 12 years. [We] spent a fair amount of time working with clients on operational technology finance transformation work, and all through that time we were looking at the consulting model that we were in and [its] evolution.
[When BearingPoint went public,] we decided it was time to look at an alternative model. [Navigant] approached me to lead its financial services practice. Still a public consulting model, but very different than BearingPoint in that they weren't a 17,000-man global consulting firm; they were very U.S. focused. Very well run, very profitable, well managed. And it was essentially a way to try the public consulting model in a different way and see if we could truly impact how their financial services practice went to market. Spent two years there; we had a tremendous set of results. We essentially doubled the practice there.
But I think the [issue] was always in the back of my mind that the public consulting model relative to the work we were interested in doing (e.g. playing in the true business advisory space)—were not really compatible. The quarterly cycle is one very much focused on transactions as opposed to being a true trusted advisor. I think we got to the point where we said, "Look, we've talked about this long enough; we know that there's a model out there that we think works better."
So we're not reinventing the wheel with the Milestone model; what we're doing is I think going back to the partnership model but doing it in essentially a new and fresh way. We're doing what we did maybe 10 years ago but we're doing it in a market that's rapidly commoditized.
Consulting: What kind of growth do you predict for Milestone?
Varughese: We have at this point just shy of 30 people deployed in New York. We have about 18 full-time staff [and] we have a team of contractors who we work with which allows us some flexibility. Our goal is to have approximately 50 people deployed within the next six months.
We've had to be very selective about the kind of projects that we take on because I think we're all about credible delivery and execution. Our clients call us and have called us for years because they know that we're guys who come in with a level of expertise and the ability to execute and have had a track record of credible delivery.
I don't think we're ever going to be a 20-client firm. I don't think we want to be a 20-client firm. We're a three-partner firm now; we want to expand to five partners in the next six months…with probably five or six referenceable, significant clients.
Consulting: Who is your ideal client?
Varughese: I think it's no different from the client base that the large consulting firms have. It's the buyers who are different. Our clients are basically the large global investment banks [and] institutional investment managers. It is very much the who's who of the large global financial services houses.
The client base does differ, though. We don't do the $30 million systems integration gig, what we would do is probably work with clients on a major outsourcing initiative. Last year Wall Street was very much focused on going retail with all the mortgage companies that they acquired. We worked on several of those transactions, helping clients integrate retail origination businesses into the wholesale sales and trading side of the market. But a lot of what we did was very much focused on developing the right operating models for new and expanding businesses.
Consulting: Who is your ideal hire?
Varughese: It all depends on the level of consultant that we're bringing in. Expertise is something that we're looking very strongly at; we're not hiring a lot of junior people. I think the problem-solving ability, the adaptability of consultants to basically constantly innovate with clients, the ability to communicate and manage clients is a major attribute for us because we're very much in the trusted advisor mold, [not one] where people can essentially disappear in the background. Every one of our staff is client facing. I think [we're looking for people who are] just very energetic and very ambitious. We're a very entrepreneurial firm. Everybody here is treated like an entrepreneur.
Consulting: Is it hard building a brand coming from an established name like KPMG?
Varughese: I think again it comes back to the type of business you're in and the relationship base that you have. Our model is all about business advisory work, and clients tend to be very comfortable dealing with folks who have proven expertise in a specific subject matter. I think expertise, credibility, the ability to execute, and track record speaks volumes over brand with confident business buyers. People who have the right level of authority and mandate typically don't shy away from working with the boutique.
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