Does anyone know what kind of hierarchy exists in the consulting world? How high is a "Principal" position?

Answer 1

Consulting breaks down into three general categories: Effeciency, Experience, and Expertise.

Efficiency-based companies, like bookkeeping firms or phone support, rely on low-wage people at the bottom and very little above them (one or two levels of hierarchy).

Experience-based companies, like most law firms or computer consultancies, rely on managing the learning curve. They create more hierarchy to give incentive to loyalty. These will have three or four levels of hierarchy, the principals at the top.

Expertise-based companies, like strategic consulting firms and investment banks, rely on being the best. They have the grandest hierchies, the broadest group of associates. The economics of these is a big pool of associates that get filtered out between years 3 and 5. In those years, associates become managers and later group managers. Between years 5 and 7, they start getting promoted to principal or partner (depending on the company). It takes about 5 associates to create a manager, 5 managers for a group, and 5 groups for a principal. Thus, you can see that for every principal, there are 125 people leveraging his/her expertise, and 124 people that didn't get his/her position.

David Maester (Maister?) is the best reference to this world. He's written several books on the subject that assist people wanting to get into a larger firm as well as those positioning themselves as consulting firms.

Also, you can find great recruiting resources on any of the major consultancies' websites. This site (http://www.soyouwanna.com/site/syws/consulting/consulting.html) is a little outdated, but good. Vault.com used to be a site I visited regularly while in grad school. They had a lot of resources for learning the biz.

Good luck

Answer 2

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Answer 3

I'm sure a "Principal" position is fairly high if not the highest position. But the Principal of what? It sounds like it would be the one who is the decision maker or part of the decision making process.
I am an educator (a high school career counselor) and for me a principal is in charge of the daily operations of the school .. in my case a high school.
But in my experience I don't believe there is a hierarchy in consulting. When a consultant is hired they bring with them their expertise in an area of high demand for the company/organization hiring them.

Answer 4

It's different in different companies. In some sompanies, analysts work for associates, in others, associates work for analysts. Principal sounds pretty high though. Usually, it's the person in charge of a whole line of business. Say, you've got Strategy, Marketing, and Operations lines; each of them could be headed by a person called Principal.

Alternatively, though, a Principal can be a one-man band or the only consultant in the firm, with the rest of the firm being his/her secretary and/or a research assistant.

Answer 5

Titles can be anything really. If someone said they are "a principal consultant", then that would mean they're on a team.

If they say they are "THE principal consultant," then they are the main person.

Either way, they're probably a key person to be talking to and working with.