The Hidden Gems of the Consulting Profession

Each year, Consulting magazine recognizes the Seven Small Jewels of the industry. But our annual celebration of the little firms that could has evolved from simply a way to recognize those often overlooked firms to a testament to the impact that all small firms are having on the industry. They are helping shape and redefine the consulting marketplace. In many ways, the seven firms featured this year represent a snapshot of the new consulting landscape. Smaller firms are no longer flying under the radar. Rather, they are playing in the big leagues and challenging the legacy firms by going after their clients and their talent. And, in many cases, they are winning. The 2008 Seven Small Jewels—ranging in size from $3 million to $52 million and from just 13 billable consultants to 200—are leading the charge of the resurgence of the small, niche, consulting firm that plays a major role in the profession today.

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True Partners Consulting

Cary McMillan, co-founder and CEO of True Partners Consulting

Managing Directors

James Kane

Stanley Jozefiak

James Sweeney

Holly O'Connor

Sometimes, all a consulting firm needs is an opportunity. In the case of Cary McMillan, co-founder and CEO of True Partners Consulting, that opportunity came about six years ago with the passing of the Sarbanes-Oxley Act. True Partners, a tax and business advisory firm, actually didn’t even launch until late in 2005, but the groundwork for that launch was laid back in 2002 with Sarbanes-Oxley. “Sarbanes-Oxley was a once- in-a-lifetime thing. It was the best thing to happen to auditors since the passage of the Securities and Exchange Act in the 1930s,” McMillan says. “But the act meant that audit firms needed to distance themselves from their audit clients. As a result, we’re getting an opportunity to bid on work that the auditors would have previously done.”

Chicago-based True Partners, like so many other success stories in consulting over the last few years, was founded by six ex-Arthur Andersen partners. Five of those partners were in the tax practice at Andersen. McMillan left Andersen before its demise in 1999 and was the chief financial officer of the Sara Lee Corporation before launching True Partners.

“The genesis of True Partners was our thought of, ‘Why be partners with auditors when you can’t share clients with them?’ The answer was True Partners. We tried to create the same quality and feeling of a big accounting firm for our tax people without having the downside of the auditors,” McMillan says. “We offer the best of both worlds: We’re a firm with Big 4 expertise, but without the accompanying bureaucracy and potential conflict of interest.”

When he launched the firm, McMillan says he was concerned about how it would be perceived in the marketplace. “We’re not one of the Big 4. Will we be accepted by the types of clients we wanted with a name—True Partners—that’s only been around for a few years,” he says. “The most encouraging part of this so far to me is that the client reception and reaction to us has been extremely positive. We’re thrilled with our client list, and I would match it up with any of the Big 4.”

And that client list must be growing, as well. From its original Chicago office and six co-founders, True Partners has grown into a firm with seven offices and 200 billable consultants. McMillan says he expects the firm to do about $35 million in 2008—more than 50 percent higher than the $23 million the firm did the year before. Meanwhile, it increased its revenue nearly 200 percent in 2007 from 2006, when it billed $7.8 million in revenue. By 2011, McMillan expects the firm to be between 400 and 500 billable consultants and $70 million and $100 million in revenue.

“We started with six, and now we’re closing in on 200 people, and we pretty much built this business from scratch,” he says. Building a firm that grows some 50 percent every year organically is no small task. And, like with many firms, finding and hiring qualified talent has been the biggest challenges and impediments to growth for True Partners, McMillan says. “That first year, our eyes were bigger than our stomach,” he says. “The problem was recruiting. If you can’t find the right people, you can’t do the work. And, initially, we were looking for experienced hires, which makes it even more difficult. That first year, you need experienced folks to do the client work. When you walk into a client site with an experienced workforce, you tend to get asked back.”

Now, True Partners has shifted its approach to focus on hiring more junior people coming out of school. But the recruiting game is never easy, McMillan says. “We’re not going to bring someone in here who doesn’t fit our culture,” he says. “I’m a big believer in culture. We’re building that culture one person at a time. That culture at a firm is very difficult to articulate and very difficult to get, and it’s very easy to wreck. You wreck it when you do acquisitions and bring other people’s culture into your own firm.”

Which is why all of the firm’s future growth will be organic, McMillan says. He is looking at two potentially two new U.S. locations—the Southwest and metro New York. Internationally, True Partners already has a Paris affiliate and eventually will have affiliated members in Western Europe, Asia and possibly Latin America.

“Good things happen to those who grow,” McMillan says. “It’s what we tell recruits all the time, growth is a big opportunity presenter. At True Partners, you’ll be part of a growing firm, and you’ll be getting all those opportunities that come with it.”