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The Professional Services Career Path: A Big Four Employee Perspective
The Professional Services Career Path: A Big Four Employee Perspective
I’m frequently asked by friends, family, clients, job candidates and random people I encounter on my travels what it’s like to work on the advisory side of a Big 4 firm. Typically, if there’s time to discuss and there’s mutual interest in the exchange, I’m immediately bombarded with a slew of follow-up questions like: What do you do exactly? How does one get into that line of work? How much do you travel? Is it a good career path? Is there such a thing as work-life balance? Is it challenging? Do you think I’d be good at it? And so on…
The reason I’m so consistently willing to discuss my perspective with so many people, especially young professionals, is that I was once in their position and had many of the same questions. When I received answers to my inquiries from people in the profession, many of whom continue to this day to be my friends, I was intrigued. After some time contemplating the potential challenges that such a job would offer, I decided to pursue a chance opportunity to join the ranks of Ernst & Young LLP. I’ve been with the firm almost three years now. Looking back, I feel as though the six years of professional experience I had accumulated prior to joining E&Y, although invaluable on many levels, simply did not hold a candle to the client exposure, professional networks and shear rapid-fire experiences afforded to me in my present capacity. I must confess, however, that this outlook reflects how I feel today, which wasn’t always the case. Reaching this point has taken an immense amount of patience, hard work, resilience, ambition, and even a little luck. Yes…I said luck.
To be clear, this article has not been written under the guise of any Big Four recruiters. Its goal is not to solicit top talent or self-promote services offered or whatever other angles you might have running through your head right now. I respect all of the Big Four firms, especially mine, a great deal but feel that the only way to offer up a truly unbiased perspective on the lifestyle is to provide genuinely candid insight. The primary purpose of this article is to offer a balanced perspective to those who may be interested in such a career path regardless of industry focus or subject matter area.
The article is structured with bold headings and key takeaway bullet points for those only interested in a quick scan. Feel free to bounce around if you already have a solid understanding of certain sections.
Chapter 1: Advisory Services
A former colleague of mine summed it up with the following catchphrase: “What we sell is the space between these two ears.” This bit of Yoda-like wisdom was followed by a slowly pointed finger to my forehead.
At its simplest form, “professional services” is an industry where firms like Ernst & Young provide clients with the right subject matter experience via resources at the right time and place and, of course, at the right price. As advisors to industry, we provide a valuable benefit, since large businesses are regularly confronted with a bevy of challenges that range from the commonplace, such as not having the internal subject matter experience needed in order to execute upon critical initiatives, to the less mundane, such as perhaps a regulatory mandate to leverage independent third-party consultation. The list in-between these two examples are vast to be sure and vary greatly in complexity.
Now that you understand the demand from the client side, let’s take a look at the delivery or firm side. Firms as you might expect are structured in such a way as to meet client demand. Ernst & Young, like any of the Big Four or large professional services firm, is composed of a series of “practices” or unique groups of resources, ranging from a handful of people to several hundred, which tout similar subject matter experience. These practices are then lumped into larger organizational categories that support the firm’s overarching strategic vision. Confused yet?
Here’s an example which should clarify things for you a bit: I’m part of the “Program Advisory Services” practice, or PAS for short. My practice then rolls up into the “Risk Advisory Services” service line. Let’s forget what these groupings actually do for the time-being. Now, imagine twenty (random number) other practices such as PAS which falls under the RAS umbrella. Hold that thought. Now once again try to imagine ten or so other service lines like RAS with once again a bunch of sub-service lines such as PAS. These groupings also vary from country to country and region to region depending on client demand in that particular geography. These “service lines” then roll into four major divisions which are: Assurance, Transaction, Tax and Advisory. Confusing, right? Ah, such is life. Here’s the cherry on top! New practices form and old practices consolidate just about every year. Want to know why? It’s no secret. Because they have to so in order to remain current with the rigorous demands of an ever-changing market landscape.
Here’s an example: Imagine for a moment that a new regulation to govern “Wall Street” firms is passed and will be enforced in one year’s time. This is a possible scenario, I might add, given today’s market conditions. The new regulation will have a significant impact on these companies for obvious reasons. It may be a “bad luck” scenario for companies, but it could be a “big opportunity” for their professional advisors. This event could provide the foundation for a “business case” to create a new practice in order to address this potential need of the future. Once the business case is formally presented and a firm commits to the investment…Recruit, train, sell and bam! We now have a new practice with a new focus. This exemplifies why professional services firms cannot have a flat or rigid hierarchy. It is for that main reason that such a fluid organizational structure must be in place. It may not look pretty on an organizational chart (that is if you could even find one) but I assure you there is critical logic behind this labyrinth of practices.
Here’s a visual that will hopefully bring things further into focus for you:
- Advisors at professional services firms sell the space between their ears. Industry perspective, experience and subject matter experience are what clients are really paying for.
- Firms are equipped to address client demand by providing the right resources, at the right time and place and at the right price.
- The professional services industry is a very dynamic one, which does not follow a flat or rigid organizational structure.
Chapter 2: Assurance vs. Advisory
This section is specific to Ernst & Young, but more than likely holds true for other firms in the Big Four. The content intentionally touches on only two of the four divisions, since its purpose is to help further distinguish the concept of organizational groupings used in major professional services firms and to provide some practical perspective on their differences.
The first division we’ll take a look at is “Assurance”. The second is “Advisory”. Assurance mainly encompasses classic audit services, including financial audits. Assurance is a very mature service offering with very well structured methodologies and reoccurring annual audit business; it holds the top spot in terms of the most annual revenue generated for the firm. Advisory, on the other hand, is more similar to a classic management consulting mold. It is not nearly as consistent as Assurance work, but it is one of the fastest growing offerings within the firm.
Compare & Contrast:
You might be thinking at this point, “Which group is right for me, Assurance or Advisory?” Well, they are significantly different from one another. Hopefully, the following explanation sheds some light on this early career decision that you’ll need to make. Assurance work is typically very analytical and often time-consuming. Auditors during the busy season can easily spend sixty or more hours per week combing through data, searching for anomalies, and ultimately preparing reports that highlight their findings to a client. Depending on the engagement, assurance work generally staffs younger personnel to handle the lion’s share of the research, which is then reviewed by seniors or managers and ultimately signed off by a partner before the findings are presented to a client. This type of structure where engagement teams utilize less experienced personal to do the bulk of the work, with oversight provided by senior management, is called a leveraged model. The leveraged model is an optimized cost model for clients, which generally yields higher profits as well. The work is very well organized and methodically run with time-tested frameworks, checklists, etc.
Based on my conversations with audit colleagues within the firm, this type of work can be quite grueling at times and not very dynamic in the sense that, once mastered, the process becomes rather routine. However, I know many senior resources who absolutely adore the audit career path they’ve chosen and wouldn’t have it any other way. Assurance work is also a great opportunity for young graduates who are looking to get into the field of accounting, audit, etc. Because of the leveraged model and consistently growing demand, Big Four firms are constantly recruiting for these types of positions.
Advisory work, on the other hand, typically staffs a larger number of seasoned resources (Deleveraged Model) to address complex business challenges that don’t always fit neatly into a service methodology. This type of work requires resources to be keenly aware of all the challenges a client is facing, whether the client recognizes the challenge or not. Resources must have the experience and skilled ability to tailor a solution that meets a client’s needs, which can sometimes mean deviating from an “industry best practice.” The key is to find the right solution for the client at a single point in time and given all possible variables.
Some Advisory engagements can be just as grueling as Assurance engagements, but the dynamic is significantly different. For instance, Assurance work typically focuses on producing audit reports or official attestation to formally document findings for a client. As you might expect, these reports carry with them significant implications. Clients have a tendency to be very cautious in their interactions with auditors, since it is essentially the auditor’s job to ask probing questions to understand the current state to support their findings. Relationships, while typically collaborative, can be underscored by a tension which is rather difficult to explain. In fact, I would love to hear from my Assurance counterparts in order to gain their perspective on this particular point.
Advisory work, on the other hand, requires extensive interaction with the client to support them collaboratively in reaching a successful conclusion to their business problems. Interactions with clients can quickly develop into strong, long-lasting relationships, since Advisory work in many cases requires working closely together in order to reach a client’s goal. The essence of Advisory work is essentially to advise the client based on the advisor’s knowledge.
- Assurance typically means you’re formally telling the client what you found via an official attestation or report.
- Advisory typically means you’re advising the client on ways to help that client with a problem via a report or collaborative interaction.
- The type of channel you work in will more then likely determine the type of environment you’ll face. You can imagine why an Assurance client may behave differently than an Advisory client based on the examples mentioned earlier.
Chapter 3: Getting In
Joining a Big Four firm or any reputable professional services firm is extremely challenging. They look for the obvious traditional strengths in candidates such as good attitude, subject matter experience, education, etc. But there are major differences between hiring a candidate straight out of school versus hiring an experienced professional.
When graduates or inexperienced candidates are fortunate enough to be brought in for an interview, it is usually based on impressive academic credentials and successful internships that have caught the hiring manager’s eye. Education is a major qualifier that is used to qualify candidates right off the bat. However, once a candidate is brought in for an interview, the entire focus shifts from academic to interpersonal qualifications. The hiring manager will be focused on three elements (not necessarily in this order):
1. Social Competencies: Can this person hold a dynamic and/or challenging conversation? Is he or she likeable? (This is extremely important when you consider the significance of client interaction) How effective is this candidate’s communication skills? Will the candidate be able to interact well with other team members? Does he or she exhibit leadership potential? Does the candidate have the ability to sell him or herself? (This is crucial, since if you cannot sell yourself to the hiring manager, how will you be able to sell yourself to the client?) These are some of the critical questions that will be running through the hiring manager’s head as you speak and react to the questions asked. How you sell yourself is vital in this interaction.
2. Experience and Potential: This trait is a bit more traditional and expected but equally important. Does this candidate possess the prerequisite skill sets to get chargeable work (i.e.,billable to a client for services rendered) right out of the gate? Does he or she possess experiences that may be marketable to a client? Does the candidate have the potential to be successful in the role?
3. X Factor: Though the bulk of the interview sessions will focus on your social competencies and experience, I feel there’s one more element that’s always considered in these interviews. I like to call it the “X Factor.” The Big Four and other major professional services firms all hire “Type A” personalities or “High Performers.” This means that for any given role that is available, there could potentially be a large number of candidates with exceptional competencies and experience. How do you separate yourself from the pack? Well…Highlight something unique, something uncommon, something that will stick in the hiring manager’s head once you’ve left the room. For me, my X Factor was highlighting my business start-up ventures while still holding a full time job and going to school. What’s your X Factor? Give it some thought, as it could end up being the tiebreaker between two highly qualified candidates.
When hiring experienced candidates, I feel that the same qualifiers listed above do apply, but the trait that now carries the most weight is the candidate’s ability to sell. The candidate must posses either the ability to sell work to clients, or he must bring with him a book of business or a major network of opportunities. Although you will still be utilized for your superior subject matter knowledge and leadership, your success ultimately will be judged by your ability to generate revenue for the firm. It is for that reason that many seasoned subject matter professionals who try to make the leap into the Big Four world are denied entry because of their lack of sales experience.
Of course, the sequence of importance when it comes to these elements varies from practice to practice. A more mature practice may already have a robust pipeline of
opportunities, and the focus may be on hiring resources to deliver “sold” work. A less developed practice, on the other hand, may need seasoned rainmakers to help stabilize sales goals and/or grow the pipeline. It all depends on the need at the time.
Chapter 4: “Engagements” Defined
While “Project” is the commonly used vernacular across corporate industry, “Engagement” is the internal buzzword used by professional services firms. It basically means the same thing. More specifically, “Engagement” is the terminology used to describe a project that will be worked on for a client. Engagements vary in size and staffing requirements. Staffing resources for engagements typically funnel through a “Resource Scheduler” who keeps track of all resources available at any point in time. The early stages of an engagement require interaction between the client and the “Engagement Manager,” the resource who is charged with organizing, kicking off and controlling the project, typically a senior resource, in order to negotiate the terms of the project.
Once the timeline, budget and resources needed have been established, the engagement manager will simultaneously create a statement of work (SOW), a document which legally establishes the expectations of the project, and will reach out to the resource scheduler in order to view available personnel and formally obtain the dedicated resources needed for the engagement. Depending on the type of project, these resources can be obtained from multiple practices and even different countries if necessary. Once the SOW is signed by the client and the resources obtained, the project can then officially commence.
Chapter 5: You have a paycheck but you don’t have a job
Working at a professional services firm is a very fast-paced and demanding environment where superb networking abilities mean a better shot at advancing up the ranks. Even if you’re a newly added hotshot to a firm, it does not guarantee that you will jump onto a major client engagement right away. This has to do with a number of critical factors such as:
- Sold opportunities may not need your type of skill set.
- Sold opportunities need your skill set but someone else in the firm beat you to the punch.
- Sold opportunities need your skill set but the client did not feel you were the right fit for the project.
- Sold opportunities need your skill set but the internal engagement manager did not feel you were the right fit for the project.
- You may need specific training to position yourself for an opportunity.
- There’s a lull in opportunities within your practice.
Once you join a firm, it is imperative that you network with as many people as you can. Introduce yourself to everyone in your practice and in other practices. In fact, introduce yourself to as many people in your firm as you can! Take people you meet out to lunch or coffee. Get to know colleagues and tell them what you’re capable of and always offer to help out with anything you can. Sound a bit unsettling? It can be.
When I first joined Ernst & Young, I was “unassigned” (not on a billable project) for the first month-and-a-half. It was unnerving, to say the least, but it does happen. The market had slowed considerably, and the project my partner had lined up for me had fallen through. It is at that time when a new hire has a choice to make. Sit back and wait to be placed somewhere (not a recommended option, as you never know where you might end up), or proactively market yourself and build up your knowledge. I chose the latter by taking internal educational modules and classes (I took so many that I met my three year target in several months) and networking with as many people as I could.
Over a two month period I had scheduled and met with over thirty different Partners, Senior Managers and Managers just to introduce myself and get my name out there. It was out of those interactions that I stumbled upon a few leaders who appreciated my unique skill sets and took me under their wings. An opportunity eventually came up which landed me in California for a successful two-month gig. This project helped build up my personal brand within the firm. From there, I was immediately placed on a new opportunity. This was due to my success on the previous engagement and recommendation from the previous engagement manager. This is what I like to call the “Snow Ball” effect, where you build brand momentum from one engagement to the next. If you can manage to keep this momentum going, you’ll be sought after within the firm and frequently pitched as the right candidate to clients.
- Be prepared for the reality that you might not jump onto a major client right away. It may require patience before you get your first major opportunity to shine.
- You have a paycheck but you don’t have a job. It is your responsibility to be proactive and position him or herself for new projects.
- Build your professional network and relationships, as they will pay dividends when the time comes to land new projects.
- Create brand momentum from one engagement to the next so you become a desirable resource to senior leadership within your practice.
Chapter 6: Client Relationships
No two clients are alike. Remember that. They each have own personalities, expectations, quirks and experiences. You’ll be faced with rational clients with great personalities and realistic expectations. You’ll also face irrational clients with difficult personalities and sometimes unrealistic expectations. Client types are infinitely different from one another. You need to be able to work with all of them in order to help them and your team to be successful. At the end of the day, you must earn the client’s trust in order to level-set expectations so both parties are getting something out of the transaction.
When it comes to relationships, the goal will always be to strive to build a long term relationship with any client. One rooted in trust above all. These relationships can yield mutually beneficial results for both the client and the advisor alike. Short-term relationships happen as well with the hope that one day they will blossom into something sustainable. A top tier firm worth its salt will always think longer term and never think of a client as quick boost in revenue. That type of behavior simply devalues an organization’s overall brand which really doesn’t help out anyone in the long term.
With all that said, exposure to these personalities and challenges is extremely valuable. Organizational leadership style has a tendency to trickle down to employees. In many instances, the manner in which a client behaves is due to the fact that he or she is simply a product of his or her own environment. There are always exceptions, but you’ll be exposed to numerous environments and get a sense as to why certain styles work for some organizations and not for others. You will carry this exposure and these insights with you to every client or job you tackle in the future. In my opinion, you can’t put a price tag on this type of exposure. Once you get a taste of these rapid-fire experiences, it will be hard to find a job anywhere that will build up your experience faster. Working on successful projects across multiple Fortune 500 companies makes for unbelievably powerful resume fodder.
- You’ll be faced with very different types of client. You’ll need to adapt.
- Successfully establishing a relationship with a client requires a tremendous amount of observational abilities, patience, timing and trust.
- You’ll be exposed to how companies work, which ranges from brilliant to draconian. Learn from them! Take those experiences with you from client to client.
Chapter 7: Key Metrics
I touched on chargeability earlier but felt it was important to expand upon the topic, given its underlying significance. In any major professional services firm, the primary metric to determine how successful you are over the course of the year is that of “Utilization”. This metric essentially indicates how profitable you are. More precisely, it is the comparison of your charged hours against your available hours. There are two different calculations for utilization:
- Full Utilization: includes all available hours, including vacation.
- Effective Utilization: subtracts vacation time from available hours.
Here’s an example for you: 40 (available #hrs per week) x 52 (Weeks in a year) = 2080 – 80 (2 weeks of vacation). I chose 2 weeks as it rounded out the number nicely. It does not represent reality. That gives us a total of 2000 hrs of available time for the year. Let’s say that you charged 1500 hrs of time to client work over that same year.
Let’s do the math:
1500 / 2000 = 75%.
75% = Effective utilization
1500 / 2080 = 72%
72% = Full utilization
Now that you know how it’s calculated, think about the implications of having a personal target of 75% full utilization over the course of a year. Play with the numbers. Input 5 weeks of vacation time into the formula and see how much it affects your percentage. The purpose of this exercise is to demonstrate not only how the figures are reached but what that means for you personally. Think about it: Having a consistent 40hr/week billable time for an entire year is not always a common situation. You will have good months where you charge much-needed overtime hours to get the work done, but there will also be those months where you might not be charging anything at all. Being “on the beach” for a significant period of time could bring you down just as quickly as that overtime earlier in the year brought you up. It’s something you always need to have your eye on, as you better believe the partners will.
Other Keys Metrics:
- Sales: Managers and above are held accountable for reaching yearly sales targets. Meeting, exceeding or missing sales goals will play a part in determining your annual rating. Sell, sell, sell!
- Quality: Client deliverables and internal initiatives generally are reviewed by peers or those senior to you in order to ensure the materials are of the highest quality. Not producing high-quality deliverables is something that could impact your brand negatively. Again, this too will play a role in your annual rating.
- Personal Goals: Every person is responsible for establishing personal growth goals with his or her counselor (everyone gets one). Once a goal is documented and approved by the counselor, you will be held accountable for meeting it by the end of the fiscal year. For instance, most practices require team members to obtain some sort of professional certification to bolster their marketability. If you set one of your goals to obtain the PMP certification, for instance, and you end up not obtaining that certification during the originally targeted timeframe, you will be held accountable.
- Extracurricular: “Extracurricular” essentially focuses on additional accomplishments over the course of the year which may not necessarily be client-based. Think of these as brownie points. For instance, I teach a project management course every 3 – 4 months to internal employees. Although I enjoy doing it a great deal, my main motivation behind this activity is to help differentiate my brand from my peers.
- Administrative: The final metric I wanted to bring attention to is that of administrative activities. This is something that blindsides many new hires to the industry because they generally have no idea how much administrative overhead is involved from week to week. Every week, you are required to submit a timesheet detailing how you spent every working hour of the completed week. There are also frequent mandatory online courses, training sessions or independence confirmations that must be taken on a periodic basis. You’re also in charge of your own expenses and credit card when working on an engagement. Just because you use a company credit card does not mean you don’t have to worry about it. I regularly spend 1 – 2 hours per week submitting my expenses. I can’t tell you just how infinitely painful this process is. However, it is a necessary evil and does become easier over time because it tends to evolve into second-nature behavior.
Chapter 8: Is it right for you?
A career path in the world of professional services can yield very exciting and fulfilling life experiences. It places you on the fast track to obtaining impressive professional credentials that can very well propel you to high places. This statement holds true for both young and experienced professionals alike. However, it’s not all rose petals and blue skies.
As in any career path one must always consider the work/life balance dichotomy. It’s a critical element which undoubtedly plays a role in everyone’s career decisions at one point or another. I believe entering into the world of professional services is oversimplified by labeling it as just a “career path”. It’s a rollercoaster ride of unparalleled excitement one minute, which can be punctured by more sobering realities the next, all of which are experienced at break-neck speeds with little to no time to recoup. I firmly believe it takes a special type of person to thrive mentally in such an environment. Can you balance the rigors of the lifestyle, which often requires extensive travel, long hours and time away from your family and friends? The field pretty much guarantees at least 2 out of 3 to occur on any given engagement.
Please do not misconstrue this perspective as blatant discouragement from pursuing the profession. Like I mentioned early in the article, I personally adore the field and all the professional/life experiences it’s afforded me thus far. I wouldn’t have it any other way. I just feel it is important to strip away the mystique because consultants are often perceived or imagined as having glamorous lifestyles where they jet set around the world with their big paychecks and not a care in the world. Don’t get me wrong, there are tremendous advantages to the lifestyle. But just as there are advantages, I want to make sure the disadvantages are equally transparent. With that said, I feel the following would be a worthwhile exercise for young professionals. I’ve put together a list of pros and cons, as seen through my eyes, to provide some meaningful decision-making context.
Pros Vs. Cons:
My hope is that this article provided some unique perspective which you may not have received before. And if you have, then good, it means you’ve been doing the necessary research in order to make an informed career decision. Just like any other career path, professional services may very well provide the types of opportunities or challenges you’re personally looking for. On the flip side, it may not. In any case, the materials presented before you should have provided enough meaningful context to decide whether or not you’d like to learn more about the profession or perhaps steer away from it altogether. At the end of the day, the most important thing is that you do what’s right for you and your family. It’s not for everyone. If it’s right for you….Congratulations! Strap on your safety belt and get ready for the ride.