Lucy Hodges talks to some versatile men who know how to sell talent. Six years ago Graham Richards was a humble chemist at Brasenose College, Oxford, entirely dependent for his living on his academic salary and known for the quality of his mind. Today at the age of 56 he is a millionaire - at least on paper - famous for having established the academic software company, Oxford Molecular, in collaboration with a colleague and a graduate student.

Endearingly, Richards remains modest about his achievement. He has chosen to stay at Oxford where he is reader in computational chemistry and a fellow of Brasenose. His company, Oxford Molecular, which was floated on the stock market last year, may be valued at Pounds 100 million, but Richards has his feet on the ground.

"It looks as though we have been fairly successful," he says. "It's all a very happy story really. The thing that interests me most is my research and the best place to do that is in a university. I am still a college tutor. I teach undergraduates and like doing so."

His rags-to-riches tale is unusual but it reflects what many academics are doing, particularly in the sciences, law, economics, medicine and business areas. Most lecturers would be hard-pushed to become millionaires but many are looking outside academe for consultancies, research projects and other work as a way of making money and contacts, and stimulating their brains.

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Richards is candid about how much money he has made, because he says the information is public. The same cannot be said of most other academics. In Richards's case, the shares he holds in his company are worth Pounds 2 million (he gave one-third of the equity to Oxford University) and he is not allowed to cash them in for another year under floatation rules, assuming that he wanted to anyway. He is paid Pounds 24,000 a year to be technical director of the company. That sum supplements his Pounds 35,000 annual salary. So, he is not a very rich man other than on paper.

Richards was lucky because the opportunity to make money was staring him in the face. His graduate students were producing software of interest to pharmaceutical companies. In fact, the drug companies came knocking at the door for the stuff. Richards gave it to them, or let them have it for Pounds 50 a go. Cheap, you might think. But he could not charge much for it because of its raw condition and because he could offer no support to users. "It made sense to do it more professionally," he explains.

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Mrs Thatcher played a role. Academics may think they owe the former prime minister little thanks, but Richards at least has her to thank for giving him his chance. Mrs Thatcher made it easier for new companies to attract venture capital and changed the rules so that ownership of intellectual property rested with universities rather than the research councils.

Other academics benefited from the entrepreneurial wind blowing in the 1980s. Stephen Littlechild, director general of Electricity Supply, left Birmingham University in 1989 (he is still on leave of absence from his job as professor of commerce) to pursue his ideas about privatisation and competition, and how beneficial they would be to the consumer. "I had a chance to put these ideas into practice," he says. "I thought it was a challenge I could not turn down."

The challenge for him has been to make privatisation and competition work. He has had to develop his ideas and to persuade people. He has also had to learn management skills. Academics work on their own, but in his current job Littlechild manages a staff of 200. "I think I have learnt a lot," he says.

By working outside a university, he is learning more about how an industry and government function, and how regulation works in practice. Things a professor might regard as extremely important turn out to be less important on the ground, he says.

Conversely, issues accorded importance by practitioners may turn out to be less important when they think about them as an academic does.

Like Littlechild, many professors and lecturers are studying issues which have some kind of public policy impact. That gives them the chance to use their expertise to advise government or other groups, for which they may or may not be paid. The outside work helps academics to ground their thinking in reality. It also enables them to spin the new knowledge into further thought.

One of the most energetic professors in this respect is Ross Cranston, Cassel professor of commercial law at the London School of Economics. He combines academic work with private practice at the Bar and being a part-time judge. But in the past year he has also advised the Wolf inquiry on access to justice. Before that he did jobs for the World Bank and Third World governments.

"I try to do things where there is an almost immediate academic pay-off," he says. "If you go abroad with the World Bank or the Commonwealth Secretariat, you get access at a high level to people in government, so you get information more readily."

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Cranston is today at work on his fifth book - a textbook on banking law. He could earn far more money in private practice, he says, (probably ten times as much) and receive higher status, but chooses to remain in academe for the intellectual reward.

Law is probably one of the few areas in which practitioners receive more status than academics. Certainly it is a discipline in which academics can earn good money outside. The same goes for business.

Senior academics in business schools can earn Pounds 1,000 to Pounds 3,000 a day without too much trouble. The middle-ranking are paid daily fees in the hundreds of pounds, so the temptations are obvious. They explain the joke about business schools which appears on their lavatory walls.

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"Where is God?" runs the first line. Answer: "Everywhere." "Where is Professor Bloggs?" Reply: "Everywhere but here."

Business schools are very keen for their staff to have outside consultancies. "You want people to consult," says George Bain, director of the London Business School. "It grounds people in real, concrete business problems which can feed back into their teaching and research."

But the perennial problem is how to stop academics doing the easy "song and dance" acts, the equivalent of after-dinner speeches, and ensure their outside work is of high quality, capable of generating new ideas, and developing the person and the institution.

All schools try to restrict the amount of time academics spend on outside work, but many ask no questions about fees. Strathclyde's graduate school of business forbids its director, Chris Greenstead, from doing outside work. Strathclyde also forbids academics to do outside teaching or "song and dance" acts. Says Professor Greenstead: "With outside teaching they're simply making money in competition with their main employer. My staff are not allowed to do that."

As everyone knows, the job of being an academic has become more pressurised in recent years - more students, more paperwork, more accountability. It is therefore not considered as pleasant as it once was. Even so, many academics believe it is preferable.

One such is Nicholas Barr, senior lecturer in economics at the LSE. He is on leave of absence this year working at the World Bank in Washington DC. Dr Barr has carved out a niche through his research on welfare safety nets.

Going to Washington is stimulating for him. It enables him to meet new people, to travel and to influence thinking at an international level.

But Dr Barr has no intention of leaving the LSE. "It gives me the freedom to pursue the work I want to pursue," he says. "It doesn't give me power or money, but I am not into those things."

Such thoughts are echoed by Peter Hennessey, professor of contemporary history at Queen Mary and Westfield College, who is able to view academe from a different perspective. In his former life Hennessey was a Times journalist. He points to the status that comes from being a professor. People take him far more seriously now he is an academic.

Academe may not be brilliantly paid. (The minimum professorial salary is Pounds 32,000 a year.) "I don't want any perks," Hennessey says. "I want the company of intelligent, decent people and I get it here in buckets. It's worth several thousand pounds."

People like Hennessey and John Carey, Merton professor of English at Oxford, supplement their academic work with journalism. Carey is a prominent Sunday Times book reviewer who earns good money in addition to his salary. What is also important for him is being able to reach a wider audience than he would through academic books.

"That is a very good exercise for an academic because you have to make yourself intelligible," he says. He also likes being made to read books he would not otherwise read. "Deadlines keep coming up and it means you read more"he says. "I find that very stimulating because it feeds into my work."

But he would not stop being an Oxford don unless he had to. He likes the social and intellectual life; being your own boss and setting your own schedules. "It is a matter of whether you want freedom to produce your own thoughts," he says.

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