A Pivot Towards Boutique Consulting Firms
Why elite consultants are leaving a corporate setting for a nimble consulting environment.
Burnout rates at the biggest consulting firms remain stubbornly high. Kennedy Research estimates big firm turnover at 18-20% annually, an average that is influenced by “lifers” who have been with firms for decades. A truer picture would be median tenure, which is unlikely to exceed 2.5-3 years at most of the big consulting firms.
While burnout and the resulting turnover are as high as ever, we’re seeing a shift in the direction elite consultants take after leaving the big name firms. The traditional transition from consulting to “corporate” is being upended.
As consultants transition out of big consulting firms, those firms generously open their client Rolodex. The underlying goal of this generosity is to position transitioning consultants in roles that may later require consulting services. While access to the firm’s clients is surely welcome by consultants, the approach fails to address a primary motivator for leaving the big firms: a rigidly corporate environment.
Many of these consultants thrive in a creative consulting environment and would like to continue the focus on addressing clients’ mission-critical challenges. However, this new generation of consultants in particular seeks a less corporate feel than either the biggest consulting firms or their clients can offer. Correspondingly, we have observed top consulting talent shift towards boutique consulting firms rather than to the client side.
Driving this shift are four core benefits of boutique consulting firms:
An entrepreneurial culture The typical founding Partner of a boutique consulting firm left the relative safety of a big firm to control her own destiny. Founding Partners with this irrepressible entrepreneurial instinct tend to hire others with a similar spirit. This entrepreneurial approach often pervades a boutique consulting firm’s internal culture, and even its approach to client service.
Vertical or functional focus Boutique consulting firms often have a clearly defined angle which they use to compete against larger, less-focused firms. Some firms may win on functional expertise (e.g. customer experience, sales) while others win on vertical expertise (e.g. biopharma, financial services). Boutique firms can offer consultants with specific areas of passion an opportunity to specialize in that project work without being “matrixed” into a vertical/functional niche that is narrow.
Potential lifestyle benefits Travel and hours are a notorious source of burnout for consultants. While every firm is different, many boutique firms have a lower travel burden and greater flexibility than the big firms. Consulting will always be consulting, but many small and mid-sized firms take on an almost familial responsibility for maintaining employee balance.
Increased influence and responsibility As with early members of a start-up, every employee at a small consulting firm has a direct impact on the direction of the firm - and even the overall success of the firm. Boutique shops expect team-members to take on significant responsibility, both because it is good for career development and because it is a structural requirement of a small, fast-growing firm.
These benefits are both measurable and meaningful. The absence of an up-or-out philosophy coupled with the presence of a nimble, collaborative structure results in significantly lower turnover at boutique firms. When a firm has very low attrition (as is the case with several of our clients), they are likely doing something right.
Despite these many benefits, boutique consulting firms still have a brand awareness problem. With hundreds of small firms out there, it’s difficult for a consultant to know which firms align with their DNA (who they are), Experience (what they’ve done), and Motivation (what your goals are). Talent Response aims to provide scale to a fragmented boutique consulting industry, giving voice to firms that may not have the brand awareness of their more corporate consulting competitors. Professionals, view the jobs we're hiring for and join our curated library of consulting talent.