Skip to main content
Business Leadership

What are the Differences Between a Small Firm and a Large Firm?

By July 23, 2017January 3rd, 2023No Comments

When deciding to hire a consultant, you will undoubtedly find yourself research firms of varying sizes.   Which one should you choose?  Are large firms better than small firms?  What kinds of projects are better managed by a larger firm?

Most of what you will read on the Internet regarding this question pushes you in a certain direction.  Usually, someone is trying to sell you on using a smaller firm.  There is just not enough objective information on the subject.  Most of the time that is because the author is trying not to scare off a potential client.  I like to think I am not delusional.  I do not foresee Exxon calling me tomorrow to run a multinational technology deployment.  Even if they did, I don’t see myself taking that job.  How could that possibly be good for their business or my blood pressure?

In an attempt to clear the air, this guide will give you different things you can think about when making a decision about the consulting firm you hire.

Client Size Relative to Firm Size

I think it is worth considering the size of the consulting firm and how it relates to the size of the client.  While this may not be true in all cases, it definitely merits consideration.  In a small firm, you are more likely to be with or close to a small business owner.  Small firms can be a good match for small business.  The owners are likely to share common goals and mindsets.  In my experience, decision makers like to work with other decision makers.  This can be a plus in the client-consultant relationship.

For larger enterprises, bigger consulting firms do offer certain benefits that come from scale.  For instance, if a project required the consultant to manually deploy software to hundreds of client devices on a “one workstation at a time” basis, a smaller firm may not have the human capital to get the task completed in a reasonable amount of time.  Again, this is not always the case, but it is something to consider.  Additionally, when the nature of the engagement demands that the consultant work simultaneously with multiple client personnel, larger firms may be better suited to deploy additional resources.

 

General versus Niche Expertise

When looking for a very specific skill set, it is often easier to get from a smaller, niche player.  Small specialty firms like this are often hyper-focused on their field.  They also have a great deal of exposure to it on a daily basis.  Many of the top-notch experts I have dealt with, especially on the IT side of things, have come from smaller, specialized consulting firms.  This seems to happen because the enjoy the ability to just focus on their field.

On the other side, larger firms offer a higher volume of client experiences due to their size.  Their consultants have seen many different business issues and often can use a template to help work through certain issues.  When there is a large, complex issue that spans a global operations footprint, you might be more comfortable with a larger firm.  They will offices in those countries who can be immediately responsive at the local level.

Risk Tolerance

When working on massive, high-profile, high-value project, you cannot afford to make a bad choice for a consulting partner.  When there are billions of dollars on the line for a particular project, larger firms may be a better fit.  This is due in no small part to the fact that they have greater financial resources to draw on should the worst happen.  This might make more sense.  It may give the client a greater feeling of security.  It might reassure them they are not going to be left holding the bag.

Conversely, smaller firms can be a good fit when the client does not want to spend a lot of time dealing with the risk management aspects that usually come from working with bigger firms.  The contracts are usually much longer with a lot more language that attempts to mitigate the impact of a dispute.  More time and money has to be spent on the front end to get things moving, and your project may not need that sort of bureaucracy.

Conclusion

I think if you ascribe to black and white rules like “Never hire a small firm if your revenue is over X”, you may miss out on some great firms that can do your business a world of good.  At the same time, you cannot discount the advantage of a deep and immediate resource pool that big firms can offer.  Like any big decision, doing good research and trying to balance cost versus results versus risk tolerance are the keys to success.