Suddenly Cozy: MBA Consultants and B-Schools

The relationships have led to co-sponsored studies of students, expenses-paid trips for consultants to B-school campuses, cocktail parties at downtown hotels and the occasional dinner. Many believe a line was crossed in 2008 when Wharton’s associate director of admissions, Judith Hodara, was found to be on the advisory board of an MBA admissions consulting firm in Tokyo. As a top official at Wharton with inside knowledge of the school’s admission policies, she was advising the firm on how it could best serve its applicant clients, including those who applied to her own school. Wharton asked her to resign the post to avoid “an appearance of a conflict of interest.” Hodara quit the Japanese firm, subsequently left the school and is now a consultant in Atlanta where her website notes that she has “personally evaluated over 20,000 MBA application files.” (See “A Yale Ethics Professor on the ‘Arms Race’ To Get Into An Elite Business School”).

In part, the admissions consulting biz is simply riding the swell of students interested in the still widely coveted MBA degree. MBA programs received more than 196,000 applications last year, up from 81,500 in 2005, according to surveys. When Rod Garcia took over as admissions director at MIT’s Sloan School in the late ’80s, the school attracted 1,700 applicants. Last year, 4,782 people applied for admission. Over the same period, the number of consultants has exploded. AIGAC alone now has 93 members from 11 countries, though there probably are as many as 300 firms with more than 500 MBA admission consultants around the world. Overall, MBA consultants are now racking up annual revenues of at least $35 million worldwide.

UP TO A THIRD OF TOP-TEN APPLICANTS USE CONSULTANTS.

And consultants have become a much more common part of the process. Exact numbers are hard to come by—partly because students are promised complete anonymity from their consultants, a vestige of the old stigma—but more than a dozen consultants estimate that a quarter to a third of the applicants to the top 10 business schools now use their services. At Harvard, Stanford and Wharton, as many as half of the applicants now pay for advice. These aspiring MBAs pay handsomely for the counseling, often between $5,000 and $10,000 a pop. The top players can charge as much as high-end attorneys. A grad-school essay package from Hernandez College Consulting, for example, costs $900 an hour. Some offer “a la carte” counseling: a Boston consultant named Sanford Kreisberg charges $300 for a mock interview to prep an applicant for a school interview and $900 for a “one-time sanity check” to critique a completed application before it’s sent.

Hiring a consultant is "well worth it," says Jamal Motlagh, a second-year student at Harvard Business School.

By and large, their clients are happy with the results. Applicants who have used consultants say they improve their chances of getting into a top school. Jamal Motlagh, a second-year MBA student at Harvard, says he believes the few thousand dollars he spent for help on his essays paid off. “It’s money well worth it,” he insists. Besides, even $10,000 in consulting fees is a drop in the bucket compared to the total cost of a top MBA program, which can now set students back more than $300,000 once you toss in their lost income over two years.

TRACE THE EARLY BEGINNINGS TO A HARVARD OFFICIAL.

Today’s consulting biz can trace its roots back to Maxx Duffy a one-time associate director of admissions at Harvard Business School who left her post for personal reasons in 1976. She never thought to sell her insider’s knowledge, but almost immediately friends besieged her. “’C’mon help me. I want to go to Harvard!’” they’d exclaim, and with Duffy’s help, “lo and behold, they were successful,” she says. Before long she started charging for her services, discreetly handing out fliers at GMAT testing centers around Boston. In 1985, she moved to Los Angeles and officially launched Maxx Associates.

In those early days, schools made it clear that students should complete their applications on their own, period, even forcing them to sign statements attesting that they had no help. So, Duffy flew under the radar for many years, never letting former colleagues know that applications were being guided through the door assisted by someone with inside knowledge. A trickle of other admissions officers followed her footsteps in the 80s. By the end of the 90s, the trickle became a flood, with most consultants following the blueprint laid down by Duffy.