What is a Consulting Firm, and How Does it Work?

 

Introduction

     There are some common misunderstandings prevalent regarding management consulting firms. People often believe that these firms have the job of “solving conflicts”, but they do not know-how. So we will try to find the answer to this “how” in the following lines. 

What is a Consulting Firm?

     Consulting firms are business houses whose job is to sell business advice to organizations and help them resolve their issues. They do it by in-house experts and external experts. Consulting firms operate from a range of one or a few industries to hundreds or thousands of areas. Most of them are grouped as partnerships, principles, or directors. Some are categorized into offices, projects, and support centres. 

How do these Work?

Partnerships

     These king of consulting firms are organized as multiply independent but mutually supporting entities and have separate owners and management. McKinsey, BCG, and Bain are the most famous and prestigious consulting firms. 

For instance, the McKinsey network consists of projects, offices, and support centres. The main stuff happens at the projects- the problem-solving sessions, presentations, etc., happen here. However, projects need more than this, so they hire HR firms. This structure is beneficial not just for business firms but also for law firms, accounting firms, and other firms.

Corporations

     These firms operate solely as a single entity. It has a single owner or a group of owners, and management work on the top. This structure is more important in the prominent British accounting firms where the old consulting divisions exist. Small and medium-sized consultancies use this structure as well. 

Pyramids

     Large consulting firms, particularly the MBA firms or the Big 4 divisions, use a hierarchical and pyramid-shaped structure. These firms have a top-down structure. So it works like this: at the bottom, the junior consultants, senior consultants and managers are in the middle, and a few partners or senior managers are at the top. While the former structure is beneficial in cost-effectiveness, most of the grunt work is done by analysts or junior consultants, and a few managers supervise the quality of work.

Diamonds

     This type of structure is followed by the firms that operate on a small scale, such as boutique firms. They have junior consultants at the bottom, senior consultants and managers in the middle, and a few managers at the top. This structure is born from the fact that most of the work at niche consulting firms is done by senior consultants and managers who are experts in industrial affairs. These are done to ensure quality. 

The Project consulting Cycle

     This process begins with marketing, where the partners or the senior managers publish research, hold conferences, and perform speeches and press releases on industry matters. All this assists the firms in building a reputation with the partner, informal contacts, and potential clients. So whenever they land in chaos, they know where to go. That is why the top hr consulting firms are quite opinionated on the significant issues raised in the public and industrial sectors. 

After this indirect marketing, the managers build relationships with prospects meeting up with the key people, and these relationships, in turn, convert into sales. Id sales are successful, and the project commences. After the project is finished, the firms or may not continue working with the same old client on the follow-up projects for further investigation. 

Conclusion

     The choice of the firms should thus depend on what you want from the consultant. Most people go for the short-term consultation, which is three-years-then-out and the long-term. So the patterns of your organization should are carefully studied and examined, and the scale of the firms is also a must factor to be considered while opting for these firms.