I can tell you that at my last job I became good friends with my boss. It actually made work really fun but it did add some stress. First of all, I always wondered if he treated me differently than the other guys because we were so close. Second, when I realized that it was time for me to move on to another job it made that decision much harder. It also made me worry that I would not get a good reference from him because leaving the job was also leaving a buddy and sometimes people's feelings get hurt over that type of thing. Fortunately that part did not happen though.
I'm sure it was also stressful for him because he probably could not get onto me over mistakes and stuff because we were buddies. I doubt it made his job as my boss any easier.
I was also a full time employee and not a consultant. That may change things a bit, but I would say that if it were me, I would not do it.