In graduate school, I had a classmate who had previously worked at a boutique firm. She enthusiastically advocated that everyone interested in consulting should only go for boutique firms. Today, having acquired more perspectives from friends and colleagues with boutique firm experience, I have a greater appreciation of what it means to start a consulting career at a boutique firm.
In this article, I will give you a big picture idea of boutique consulting and what you should consider before starting your career at this type of firm.
Defining Boutique
There is no established definition of what identifies a consulting firm as boutique. I have seen some content that identifies any consulting firm that is not MBB or Big 4 as a boutique, which I personally think is a less than fair categorization.
For our purposes, let’s identify a boutique firm as one that has less than 100 consultants (emphasis on ‘consultants’ and not staff) and operates from at most only a handful of offices (even if those offices are in multiple countries).
Notable Considerations
1. Compensation
My classmate always emphasized that boutique consulting firms can offer more financial compensation than the major firms. This is potentially true if the boutique firm has an amazing year and is in an advantageous position to hand out generous bonuses. Not all boutique firms generously share profits with junior consultants, but some definitely do.
However, keep in mind that in the event of a shock to a boutique firm’s cash flow (due to an economic downturn or more unique circumstances), compensation can crash since they have comparatively limited resources to insulate against financial setbacks.
There is also much to be said about other types of compensation (e.g. healthcare and some form of childcare financial aid) that most major firms offer but may not be offered by boutiques.
2. Career Advancement
Some boutique firms offer rapid advancement. I have heard stories of people occupying Client Engagement Manager level roles with as little as 2 years professional experience. However, there are also boutique firms with comparatively glacial promotion trends, especially if the firm elects not to grow headcount.
At nearly all major firms, there are structured career paths that limit a firm’s ability to offer early promotion or retain someone who has not been promoted. Some have commented that structured career paths are helpful because they give firms an incentive to focus on people development in order to make sure that those who are promoted are prepared to handle the next level of responsibilities.
3. Career Growth
Boutique firms often focus on particular areas, be it a specialized function or industry. That means boutique firms offer opportunities for career growth and skills development that are more focused and relevant to a specific area of work.
Most major firms provide a broader spectrum of experience, and exposure to a wider range of consulting specialties and integration of specialties on larger client engagements.
4. Exit Opportunities
Boutique firms can have a highly recognized brand in the specific areas that their business occupies. However, outside of those specific areas, major consulting firms have greater brand recognition that can help consultants secure a broader range of exit opportunities. Of course, skills and experience can be even more relevant for recruiters, and boutique firms can be especially good at providing specialized skills and experience to help consultants move into specific follow on jobs.
It should be noted that someone jumping from a boutique firm to a major firm often enters at the same or lower level than previously held. It is more common for someone jumping between major firms to receive a promotion.
The Bottom Line
My classmate wasn’t wrong about some of the advantages she harped on about, but when launching your consulting career it is important to look at a boutique firm holistically and compare it to major firms and other boutique firms in its business area.
In particular, it is important to investigate the specific dynamics at play with a boutique firm which may take some detective work as information is less widely advertised and openly discussed.
At the end of the day, prospective consultants need to assess their own interests and what they are willing risk to determine if a boutique firm is right for them. I have known people to be amazingly successful at both boutique and major firms, but the career management challenges are decently different.
Hall Wang is a dual degree MBA and Master of Public Policy graduate from Georgetown University who has recently matriculated into a major management consulting firm. He has worked at America’s most innovative companies including Blue Origin and Facebook, as well as having done two combat deployments as a US Army Officer.
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