External consultants may be at a disadvantage because they come from abroad and don't know the organization. A disadvantage of consulting is that consultants often lack knowledge about internal procedures. This can lead to labor disputes, since your mode of operation can affect the workflow of your regular employees. You generally have limited control over independent contractors; they're only guided by what's spelled out in the contract.
If you run a multinational company, one of the disadvantages of consulting is that hiring consultants in foreign countries can be a challenge due to language difficulties and cultural differences, requiring additional resources to ensure productive participation. Instead, external consultants are hired for the sole purpose of taking advantage of their experience and ability to generate changes for a specific business problem. Despite the cost, outside consultants have advantages that in-house consultants can't necessarily replicate because of their long-term reputation for their good work and for hiring the best MBA graduates from the best schools. If you're deciding between forming a team of in-house consultants or hiring external consultants (or taking a hybrid approach) to solve your complex business problems, be sure to carefully weigh the advantages and disadvantages of each model and the associated implications for your company.
In addition, those interested in pursuing a consulting career should also understand the nuances between internal and external consultants. While in-house consultants fight company policies from within the company, employees often look suspiciously at outside consultants. While outside consultants have a limited view of corporate culture, an in-house consultant can quickly navigate an organization. Many smaller companies give up on in-house consulting teams simply because they perceive a lack of need or because of budgetary restrictions; in-house consultants are often much cheaper than external consultants.
While in-house consultants have the ability to navigate the waters of business policy, they are more likely than outside consultants to be stuck in the middle of a storm.