Paul Cordasco looks at the role of consultants in the PR firm selection process.When David Sandor decided he needed to review his company's relationships with its PR agencies, he picked up the phone and called Jerry Swerling. Sandor, a veteran of the agency ranks, had previously crossed paths with Swerling while pitching some accounts. Now that Sandor was heading PR at retailing giant Home Depot, he decided to bring in Swerling & Associates to help steer the company's agency search. Swerling, a former agency man himself, has built a niche business around advising corporate clients on their hunts for outside PR help as well as evaluating the efficiency of business entities' in-house PR operations. Sandor says Swerling helps lend credence to the search process inside a company. "He was helpful as an objective third party that gathered information and opinions from various people within our organization," Sandor says. "He also helps you get people in your organization to buy into the review process by outlining a clear path throughout." While many companies still handle a search on their own, Swerling and a handful of other PR management consultants occupy a powerful position in the PR space. They have both a unique window on how clients view their agency relationships and a role in guiding a procedure that is crucial to the outside players. While consultants' participation in reviews is not new, several people involved in rainmaking activities at agencies say they are seeing more reassessments involving such firms. "They're definitely getting in the mix a bit more," said a head of new business at a top-ten PR firm. For many agency executives, the consultants' view of their firm can be crucial to winning a new client. Indeed, several top agency people declined to comment on the record about the role consultants play, citing their power over the process. "Look, it's a touchy topic for us," said one. "They have a lot of power over us in some cases." Consultants define their role While each consulting firm says it has its own approach to helping companies find outside help, and some appear to steer the process more than others, none claims to make the final decision on any agency assignment. These consultants are quick to try to dispel the notion that they do anything other than shape and facilitate the task. "I tell clients that my job here is to help you see the pros and cons of the agencies competing for your business, so don't ask me who to hire," says James Arnold of Arnold Consulting, who has helped the United States Treasury, the State of Florida, and others find outside PR partners. "I'm just the tailor who makes the suit, you're the ones who have to wear it." Nearly all the management consultants are quick to reject the "broker" label that some people put on them, pointing out that agency searches are only part of what they do. Many say that it's their work with clients on overall communications structure and strategy that leads to an assignment to help find outside PR help. Some go so far as to say that they never sign on just to handle a search. "At this point in time, with the crunch on corporate budgets, companies are trying to do more with less," says Peter Osgood, partner at consulting firm Osgood, O'Donnell & Walsh, which worked on IBM's widely watched agency consolidation in 2001. "We are trying to help companies do that, especially in-house. We help them decide what they can handle inside and what they need an agency to do. Sometimes that means rethinking agency relationships and even starting an agency search. But that's just a small part of what we do for our clients." While the management consultants say they do not pick the ultimate winner in an account contest, they do acknowledge taking an active role in helping compile a list of likely candidates early on. Most say they keep close tabs on the agencies and conduct their own research into the capabilities and offerings of each to help clients get a good sense of the industry landscape. "I attempt to get clients away from the usual-suspects syndrome," says Swerling. "By that I mean, there's too much of a tendency for the client to say, 'Hey, off the top of my head, I can name seven or eight agencies - let's include them.' But when you do some digging and really look at the client needs, oftentimes there are lesser-known smaller or midsize firms better suited to the task." Indeed, Sandor says one benefit of working with Swerling was his help in narrowing the search. "Once he helps you figure out your needs, he then helps identify the universe of agencies out there that fit those needs." Yet developing short lists - deciding which firms will be given a chance to pitch for business - can be the most controversial part of a search. Some agencies say that consultants sometimes exclude outside firms that are natural candidates for the account. The consultants counter that the agency universe is large and clients retain them to act as gatekeepers. Executive-search and consulting firm The Repovich-Reynolds Group (RRG) is currently handling an agency review for a major corporation. It recently received a call from a top executive at an agency who was extremely unhappy that his firm wasn't involved. "He was very mad - like a bull in a china shop - over the phone," says RRG president and CEO Smooch Reynolds. "I told him that his firm was not the right cultural fit. And while I understand his disappointment, he needs to understand that our clients hire and trust us to present them with agencies we think can routinely exceed expectations." Bringing structure to the search The one positive that agency people consistently cite about a consultant-driven review is that the third party nearly always brings more structure. All the consultants claim to do extensive research within their client's organization before ever contacting a firm. Some, like Swerling, begin with a "request for information" - a sort of agency resume tailored around the client's needs. Others go directly into request-for-proposal mode. Indeed, each consultant seems to have developed his or her own road map for whittling a list of potentially more than a dozen candidates down to a final two or three from which the client chooses its new PR representative. Agency people say dealing with each consultant is also different in that each brings unique wrinkles to the process. For instance, Swerling insists that clients visit the offices of each of the finalist agencies. He says doing so gives a better sense of and feel for the firm. The agencies, in turn, say being put through such paces by the consultants comes with the territory. Says an agency executive who has gone through a Swerling-led review process: "Well, it gives your people extra motivation to clean up their cubes." ----- A conflict of interest? Some management consultants who help corporations choose an outside PR agency also do consulting work for the agencies themselves. That can raise the question of whether this presents at least the appearance of a conflict of interest for the consultants. This is especially so when a consultant's agency client ends up on its corporate client's list of agency finalists. Jerry Swerling, who runs management-consultant business Swerling & Associates, received a consulting fee for speaking at a Ketchum workshop in spring 2001. At the end of 2002, he began helping Home Depot lead an agency search that this year led to Ketchum snagging an agency-of-record assignment. All three parties say the fee had no influence on the choice of Ketchum. "I can certainly say from our perspective that it was a very unbiased and objective review on his (Swerling's) part," says David Sandor, director of PR for Home Depot. "I've made no attempt to hide my agency-consulting work," says Swerling (Ketchum appears on his list of clients). "I think my reputation speaks for itself at this point, and my clients will speak to my professionalism." Mercer Island Group, which does consulting and agency searches, also lists PR firms as clients on its website. "When we work on a search, we inform our client at the beginning of any agency-consulting relationships that we have," says founder Steve Boehler. The Repovich-Reynolds Group (RRG) makes most of its money as an executive recruiter in the communications arena, but also helps companies find outside PR agencies. One of its headhunting clients is Fleishman-Hillard. Smooch Reynolds, president and CEO of RRG, says the situation presents no conflict because two sets of practitioners do the different work. "Most importantly, we always discuss with our corporate clients for whom we are conducting an agency review the totality of our other work and where we think they might perceive a conflict." The Council of Public Relations Firms says it has no policy on the issue. But a similar situation arises in the advertising world. The American Association of Advertising Agencies' (AAAA) policy is that consultants that help companies pick an outside agency "should neither solicit business from agencies nor accept assignments requested by participating agencies." But it goes on to say that the consultant should disclose to clients any fees it has or will receive "from any agencies involved in the search process for any type of services rendered to those agencies." Though guidelines don't exist in the PR world, some consultants are promoting the fact that they work only for corporate clients. "We never take fees from agencies, and I'm not trying to cast judgment here, but that's always been our position," says Arthur Anderson, managing principal of Morgan Anderson, a marketing consulting firm that does searches for nearly all areas of marketing. "The AAAA has said this represents a conflict of interest, and indeed it does."