For many years I have been a partner at a highly regarded consulting firm but have been considering going out on my own. I was also recently offered a position at a boutique firm. Given the current market, what factors should I consider?
Because you are making a choice that could affect you for many years, the factors to consider do not change that much with year to year market circumstances. There are benefits of large and small or solo practices, although the distinctions are disappearing.
With the economic downturns in consulting in 2002 and 2009, many large firms cut back hiring and, among several, partners left to start their own firms. The rise of boutique firms in this decade, and the realization among clients that marquee names do not always equate to top performance, have opened the consulting market to smaller and smaller firms. Clients are looking for the best talent on the consulting team and are less concerned about the company they work for.
Large firms have more resources, can field larger teams, have internal knowledge resources and tested processes, are more likely to work for recognized logo clients, and can (or at least used to) provide more career stability. Smaller firms have more flexibility, greater discretion in selecting clients (they are less compelled than large firms by firm economics to grow year over year), and can assemble consulting teams with more flexibility and speed. Many smaller firms and solo practitioners staffed by large firm refugees (many of whom took their clients with them when they left) and successfully compete against established large firms. The sophistication and visibility of the work, assuming your skills and marketing are done effectively, are less distinguishable as a function of firm size. Tip:
More than ever, the choice of firm size is about lifestyle and risk. If you are looking for flexibility, a chance to put your own mark on your practice, and are willing to tolerate some risk, a smaller or solo practice is attractive. If you are looking for the largest engagements or prefer large teams, prefer or need knowledge assets developed by larger firms, and prefer the more institutional lifestyle, then a larger firm is where you need to be. No decision is forever, so if you want to try a boutique firm and you don't like it, you can always switch. © 2011 Institute of Management Consultants USA