The Rise of the Rogue Executive: How Good Companies Go Bad and How to Stop the Destruction

Chapter 10. Fees Galore

Fees for this, fees for that—pretty soon, it adds up to real money. Professional service firms grew and sprang up through the 1980s and 1990s, and individuals hung out their own shingles in the wake of downsizing. Service providers proliferated their products. A host of middlemen surfaced to broker deals for independent contractors, and outsourcing became popular. Internal accounting systems now routinely track internal “funny money” fees or cross charges within the company, often referred to as “internal consulting.”

Here, we discuss trends in the use of services by corporations and the enormous outflow of cash that accompanied these trends. Traditional service providers, such as auditors, attorneys, and bankers, offered ...