knowledge and then build expertise that can bridge many industries and functions across projects.

Project management: The lowest level staff begins as a team member, developing the skills necessary to manage increasingly complex projects and eventually evolving from a supervisory to advisory role.

Account management: Over time, staff increase both their frequency and quality (in terms of seniority) of client contact. Senior staff own client relationships and are responsible for developing and maintaining new relationships for the firm.

Business development and implementation of marketing plans: Eighty-six percent of consulting firms have no salesforce, relying instead on the partners and other staff for business development. New staff initially contribute to client proposals, but over time their role evolves into responsibility for revenue generation and the management of a portfolio of clients.

In addition, over time, employees are expected to increase their competency at firm administration and staff development, as well as to contribute to the firms marketing efforts, initially by supporting the development of new ideas through directed research but eventually as visible and internationally recognized thought leaders (see Exhibit 9.3).

Organization Model Example

The general principles of career progression are similar across professional services firms regardless of specialty.

Firms are generally organized by practice model, with practices identified according to industry and/or functional specialization. The leverage of junior to senior staff is usually fixed. In a typical consulting firm, for example for each partner, the firm has an average of five to six full-time equivalent (FTE) professional staff as follows:

1.25 project managers (senior associates/principals at Booz Allen)

1.75 consultants (associates)

1.5 associates (consultants) 1 support staff

The organization structure usually includes an explicit career development path with well-defined standards for promotion in relation to performance, behavior, and client development. For a consulting firm, titles of levels might be:

Exhibit 9.3 Professional Services Firm Competency Models. Source: Mercer Compensation Survey, Booz Allen Analysis.

Consultants, senior consultants (entry level to between one and four

years postadvanced degree) Associates, senior associates (four to seven years postadvanced degree) Principals (7 to 12 years)

Partners, senior partners, and managing partners with ownership stakes (greater than 12 years)

Some models also have a nonpartner track and provide long-term career options for individuals with specialized knowledge or training.

Because only a select few progress to partnership, hiring and promotion model plans for natural attrition. If the workflow demand varies or changes occur in the business environment, lateral hiring is used to replace associates lost to attrition, or up or out policies are increased to diminish supply.

Under this career progression model, formal and informal training and mentoring on every level are perceived as investment in the assets of the firm and are expected to be core competencies of senior level staff.

In professional services firms, the management of complex interactions among client staff and support staff is critical to ensuring overall quality of work. Because under this model partners are the leaders and leading administrators of the firm, the ability to manage these complex interactions well is another core competency expected of senior client staff.

Summary

A firms reputation and success depend exclusively on the talent and intelligence of the people delivering it. The optimal organization model for professional services firms is the one that allows the firm to best leverage its resources and intellectual capital for optimal competitiveness. Regardless of which model the firm chooses, it must allow people the freedom to operate effectively while supplying needed structure as well as checks and balances to keep the firm on track. It must incorporate transparency throughout the organization, clearly define roles and responsibilities, and make knowledge sharing a part of the corporate fabric.

RESOURCES

FIDIC (International Federation of Consulting Engineers): The Professional Services Firm: A Training Manual and Guide to Practice-see http: www1.fidic.org /resources/capacity/wb flier final.pdf for details on this publication.

Maister, David H., Managing the Professional Services Firm (New York: Free Press, January 1993).

Maister, David H., True Professionalism (New York: Free Press, January 1997).