GLG Expert Consulting Model

GLG (Gerson Lehrman Group) operates an expert network that connects industry consultants with investors and companies seeking specialized knowledge. The business model involves facilitating paid consultations between experts and clients, particularly in contexts like IPOs and investment research.

Key Points:

• Core Service Structure:

  • Banks/investors connect with industry experts for specialized knowledge
  • Experts are paid hourly rates (can be $2,000+ per hour)
  • Consultations help evaluate companies before IPOs or investments

• Example Use Case:

  • Bank taking a company public (e.g., HubSpot)
  • Connects with email marketing experts to evaluate software
  • Experts provide insights about industry and competitive landscape

• Revenue Model:

  • Experts charge hourly rates
  • GLG takes a portion of the consultation fees
  • Recurring revenue from regular client consultations

• Abuse Potential:

  • Some hedge funds used GLG to gain insider information
  • Would build relationships with consultants for non-public information
  • Example: Steve Cohen's SAC Capital spent millions yearly on GLG consultants
  • Used consultants to get information about drug trials and other sensitive data

• Market Size:

  • 10% of US doctors admitted to being consultants on these networks
  • Suggests large available expert pool across industries