Chapter 6 – Organization and Management of MAS Practice

Learning Objectives:

1. Understand the basic techniques in developing MAS Practice

2. Describe the organizational structure of the MAS Practice or Division
3. Understand the role, responsibilities and qualifications of the personnel in
consultancy practice.

If one wishes to be a consultant, he/she must first:

 assess his/her own talents and expertise

 review his/her communication skills, both oral and written
 review his/her sales ability
 review his/her ability to focus on a project and carry it to conclusion
 review his/her ability to maintain objectivity
 evaluate his/her business and professional judgment

The scope of a consulting practice is defined by the expertise and experience of the
consultant within the practice. This can be technical consulting in:

a. engineering,
b. industrial management,
c. marketing,
d. business management, or
e. financial areas

To be successful, it is extremely important to recognize the firm’s background and

expertise so that the scope of the consulting practice can be well defined for proper
communication to the potential clients. The firm should not “over sell” these abilities
or accept work outside the firm’s capabilities.

Prior to entering into a consulting practice, the prospective co nsultant should conduct
market research to identify opportunities in the marketplace.

This will specifically involve:

a. study of the listings of management consultants

b. survey of local CPA firms to determine which are offering consulting services
c. determination of possible oversaturation of consultants in one’s specialty area
d. identification of new services that may provide a competitive edge
Although economic statistics and financial information concerning consulting
practices are not readily available, most of this information may be obtained from
word of mouth discussions with other consultants and knowledge of the local
marketplace.

Quite frequently, a consultant gets started when his or her clients indicate that they
would like to use his/her talents as a consultant. This limited number of clients will
provide a sufficient base for the individual to get started and maybe even keep busy
started on a full-time basis.

In any case, a practice development program needs to be initiated to target potential

clients. Market research is important both for the new firm and established consulting
practice. Every practice needs to have a continual flow of work and steady stream of
new opportunities and new contracts. Some effort has to be made to reach out,
contact potential clients and make them aware of one’s consulting services.

Equipped with necessary information, one needs to establish an operating plan for
the practice – that is, to set goals and objectives. These goals and objectives should
include:

a. a desired income level,

b. potential clients, and
c. strategies to obtain those clients.

*explanation in book*

Organization of MAS Division

Should such deficiencies exist, a consulting firm can apply these approaches:

1. It can employ additional consultant with adequate knowledge and skills or

2. It can undertake a variety of “staff development” activities that are intended
to endow the presently employed consultant with needed knowledge and skills.

Staff Pyramid and Fee Structures

 Level
Partners
Principal
1 1 Director

Senior Managers
2 1-3 Managers
Supervisors

3 1-5
Senior Consultant
Senior

4 Associate
2-6 Consultant
Staff

Each pyramid is built around a partner, principal or director. In large practice, there
will be multiple pyramids. The numbers in the pyramid refer to the typical number of
personnel at each level (per pyramid).

Partners, Principals, Directors

 This individual is typically the most experienced highly paid professional

 Normally responsible for the successful completion of engagements, dealing
directly with clients and for selling work.
 Principal activities of partners include:
o performing practice planning,
o administering and developing practice,
o consulting with top-client managers,
o approving engagement reports, and
o managing client crises.

Senior Managers, Managers, Supervisors

 These individuals perform week-to-week management of the engagements

 Responsible for identifying new client prospects
 Assisting in the sales process
 Principal activities of managers include:
o planning engagements,
o evaluating consultants,
o supervising consultants,
o writing proposals,
o reviewing working papers and reports,
o consulting with client managers, and
 o serves as expert in one or more applied knowledge areas.
 A firm that intends to recruit a manager will probably seek the following
attributes:
o previous successful consulting experience
o previous successful middle and top management experience
o specialized or advanced knowledge in major areas where the recruiting
firm’s practice has identified needs

Senior Consultants, Seniors

 These individuals typically have 2 or 3 years of consulting experience and are

capable of supervising the daily work of the younger staff.
 They possess the right combination of experience and dedication to complete
different projects with limited supervision.
 Seniors are normally in short supply in most firms.

Associate Consultant, Staff

 “young or new staff”

 Depending upon the firm, these individuals usually have less than 2 years of
consulting experience and may have been hired directly out of graduate or
undergraduate school.
 Some firms require prior business experience, while others prefer to train their
own personnel and hire some undergraduate students.

Billing Rates

The typical range of billing rates of the four pyramid levels are as follows:

Level 1 P6,000 to P12,000 per hour

2 P3,600 to P 6,000 per hour
3 P2,000 to P 3,600 per hour
4 P1,200 to P 2,000 per hour