Hire a big consulting firm, specialist or boutique?

Clients seeking to hire consulting firms always face the same trade-off: should they obtain the expertise and reputation of a global consulting firm, or should they work with a more specialised consultancy, or even a boutique player?

The world’s largest consulting firms include the likes of the Big Four and the three larger strategy consulting firms of McKinsey & Company, Boston Consulting Group and Bain & Company. These are firms which work across a huge number of service areas and industries, and maintain an international presence. As a result, they can deploy teams to clients anywhere in the world, and typically win a lot of work from larger mid-market companies, corporates and governments.

Specialist consulting firms focus on certain areas of the consulting market. For instance, industry specialists could focus on telecom and media, or financial services. There are also functional specialists, like consultancies which focus just on finance and risk, strategy or mergers and acquisitions.

These firms can be large or small: Mercer for example is dedicated mainly to human resource consulting, but generates multi-billion revenues. Most specialists are smaller than the large global consulting firms though, simply due to the fact that they specialise. When specialist consulting firms are small in size, they are also known as niche consultancies.

There is no formal definition for boutique consulting firms, but the most common defining factors are size and focus. A ‘boutique’ is typically a small shop or business offering up luxury goods or services; similarly, when the term is used in the consulting industry, the term boutique tends to refer to smaller firms with tightly defined focuses. While there is perhaps less emphasis on size here – a boutique management consulting firm could have anything from one to 200 employees in larger markets – a boutique tends to be highly-specialised in one or two areas.

When choosing which type of consulting firm to hire, here are some considerations:

Specialisation versus scale

Boutique consulting firms might be of more use to your situation as they have small teams that are highly experienced, increasing the chance of having a senior consultant working on your project. This is in contrast to large firms, where the existing talent is stretched across a vast pool of clients, reducing the likelihood of having a concentrated team of senior experienced consultants at your disposal.

In a similar vein, some boutique firms operate in a niche with a very specific set of expertise. Provided that you are looking for something specific, hiring a boutique consulting firm will give you a dedicated team of specialists, often backed by experience.

On the other hand, big consulting firms operate in such a diverse set of fields that you are likely to get a more multifaceted set of voices supporting your business. These firms also have the resources at their disposal to deploy as and when it is required. The fact they work internationally may also be a major benefit, as it means they can bring global experiences and international best practices to the table.

‘Trial & error’ versus ‘tried & tested’

Boutique firms are said to be more flexible and tailored in their approach, customising their solutions based on your specific problem. These firms work with you on problems and help overcome barriers that might emerge while solving them. This is an advantageous approach if you have time at your disposal to work through solutions.

Big firms, on the other hand, work with a number of clients on similar issues, and therefore develop a more standardised approach to problem solving based on generalised experiences. This can be an advantage when looking for quick and easy solutions to general problems, but could prove a problematic approach when your business is facing a highly unique problem that requires a customised solution.

Price versus prestige

While this is not set in stone, it is likely that engaging boutique firms will cost your business less than engaging one of the big names. The quality of the solution delivered often depends on the type of firm hired and the relationship with the client, and not necessarily the size of the consulting firm.

As most boutiques do not organise themselves into ‘pyramids’ – where junior consultants are deployed to a higher number of engagements – they often supply more senior consultants to their clients' projects. With this in mind, boutiques can be seen as more cost-effective, as they may provide deep functional or industry expertise for a lower price.

However, big firms come with a high basic standard of services, and a great deal of prestige. While you pay a higher price for these firms, bringing a big name on board can considerably boost the credibility of solutions presented to management, shareholders or employees.

To that end, it is commonly felt by larger client organisations that “you can’t go wrong when hiring one of the big consultancies.” The renowned brands are seen as having high levels of professionalism, quality control and reputation – and in an industry which still does not require chartered status for entry, that goes a long way.

Local implementation versus global roll-out

Large international consulting firms have global presence, and can therefore support projects in most countries. For corporates which are looking to expand changes beyond their headquarters to all the country divisions, this is useful as using a single consistent consultancy can ensure a standardised methodology and one point of contact.

For local implementations, this benefit drops, and it could provide more valuable to hire a local or regional consulting firm. They might be better aware of what happens locally, and can also bring networks or local expertise to the table. As a result, it might be smart to focus more on the expertise a consultancy can bring to an organisation, rather than its scale or size.

In summary

There are projects for which either large or boutique firms can be the best solution. Projects which require creative solutions or projects which require smaller teams of consultants and flexible delivery models and collaboration might be suited to boutiques. Meanwhile, international scale-ups or cross-departmental transformations may require the large pool of consultants and the broad and diverse expertise of a big firm.

Overall, there is no right or wrong answer to any of the previously mentioned questions. Clients must determine on a case-by-case basis whether the higher price of bigger consultancies is justified by their reputation and international reach; or whether the specialist expertise and high ratio of experience consultants mean it is worth taking the risk of hiring a less expensive smaller consultancy.