Pursuing a career in management consultancy can be a richly rewarding decision, from the perspective of both personal growth and financial reward. The following discussion of the pros and cons of big and small consultancies is the second in a serialisation of more than 100 pages of career editorial from The Definitive Guide to UK Consulting Firms. Professionals seriously considering the option of furthering their career in consulting may download the full guide.
Big firms vs. small firms
Given that I come into contact with dozens of consulting firms each week, one question candidates often ask me is: Where would it be best for me to pursue my consulting career? By which they are often looking for steer on whether a career with a large global consulting brand or a small niche practice is going to be the right choice.
In truth, for no two people will my answer be the same.
There are undoubtedly significant differences between a career pursued with one of the majors versus one pursued in a niche consultancy. Some of the differences are firm-specific, so comment can not be made without knowing the exact firms (and offices) under consideration. But many of the reasons to choose one over the other relate to consistent organisational traits of large and small consulting businesses—and the career characteristics inherent in working for each. Which of the two is right for you will very much depend on the importance you attach to various components of the consulting career proposition.
I present below five key considerations for readers weighing up the pros and cons of working for a large vs. a small consulting firm. Only you can judge which of these factors is the most important to you:
1. Work/life balance
2. Earnings potential and remuneration flexibility
3. Career risk
4. Challenge/exposure, sales responsibilities and training
5. Becoming your own boss
Of course characterising what constitutes a small and a large firm is a challenge in itself. You may find yourself presented with the opportunity to work in a newly opened office of a large global firm. If this is the firm's first foray into that geography, then that particular office may display many of the traits of a smaller consulting business. Similarly one can find smaller firms who are extremely specialised but have a very global footprint—and so differ somewhat from the characterisations I present below.
In sharing these five key considerations, though, I provide the foundations for you to assess the options you have under consideration and to determine for yourself where your prospective employers fall in each of these five areas.
1. Work/life balance
Enhancing one's work/life balance is often a key reason why consultants leave a firm for pastures new. I've known plenty of consultants at both large and small consulting firms who've had reason to complain about the work/life compromises they've felt compelled to make. So I would start this piece by stressing that neither type of firm inherently shields you more from this career downside than the other.
Consulting firms predominantly serve clients who have timecritical issues that need addressing. One of the key reasons they pay consulting firms to tackle these issues—rather than dealing with them in house—is that they want to accelerate the timescales in which these issues will be addressed. The very nature of consulting is that staff will be working in time-pressured situations such that compromises will need to be made in order that pressing deadlines be met. These compromises often impinge upon a consultant's work/ life balance.
This is not to say there is a uniformity of work/life balance issues across the industry—indeed I would say quite the opposite. There are some firms where this is a far more demoralising issue than at others. But it's not the size of firm that influences whether work/life balance is a problem or not. Rather the scale of the problem is a function of the individual managers and partners you are working for and the culture that pervades the practice.
In small firms—even those with the best cultures—you'll find you have periods of work/life imbalance simply because in small firms everyone 'pulls together' when it's needed. This isn't peculiar to consulting; it's just the nature of working in a small business where at any point in time you're only a few months of client-order-bookvalue away from the firm going bankrupt.
This aspect of working for a smaller firm is offset by the fact that a closer-knit team will usually have a greater regard for one another's life outside of work and so managers will be more inclined to try and accommodate personal commitments in a smaller firm. But countering this is the fact that the biggest global consultancies have introduced policies to try and make flexible working more viable, to foster parental leave and to encourage mothers returning to work to find a work pattern that fits with their commitments.
So, in conclusion, on this first consideration I would say there is very little to choose generically between firms big and small—but rather this is something that needs looking at on a firm-by-firm (and even office-by-office) basis.
2. Earnings potential and remuneration flexibility
Smaller firms offer some advantages in the sphere of remuneration and career progression. As a general rule, below Partner grade, it is possible to earn more and see your career progress faster at a smaller firm. Firstly, larger firms are often able to attract hires thanks in part to the strength of their brand. A strong consulting brand enhances a consultant's CV and so candidates as a whole tend to be willing to work for the most established brands for less than they would demand to work for a lesser-known firm. To counter this, lesser-known firms often pay more.
Smaller firms often offer more sizeable bonus pools too- tied to the performance of the firm and the contributions of the individual. This is arguably because the firms are more reliant on exceptional endeavours from their staff (as opposed to the pull of their brand) to drive forward the business—and so are more willing to pay for such behaviour.
Lastly—and most notably—are the differences in promotion rates between big and small firms. Most large firms are bound by time in service 'promotion norms' that make it harder for them to make exceptions for exceptional performers. Stephan Butscher, Chief Talent Officer at Simon-Kucher & Partners, says that 'smaller firms tend to promote people primarily on their personal performance rather than some form of quota or the overall company performance.'
The above points paint the picture that two similarly gifted candidates are likely to see their careers and remuneration progress at different rates if one joins a major global firm and the other joins a small niche firm. I would hold that—as a generalisation—this is broadly correct. However four important caveats must be made.
Firstly—and covered below—is the fact that with this higher remuneration comes a higher degree of risk at smaller firms. Secondly, the packages offered by larger firms are likely to be more flexible in terms of benefits composition, with less variability in pay, which are factors that appeal to many. Thirdly, a candidate's ability to secure a role with a different employer is likely to be enhanced with a major brand on their CV. Lastly, it must also be said that the ultimate prize for those who do make it to Partner level is likely to be considerably greater at a larger firm—with scope for further career advancement that simply plateaus out in a smaller consultancy. Adds Stephan Butscher: 'In particular the speed at which top performers can achieve full Partner level is appealing at smaller firms; 7-10 years after joining as a graduate is r