Starting a new firm in the worst downturn the profession has seen in at least 40 years isn't easy. Starting a new firm to compete with single-shingle and 1099 body shops has inherent risks, too. But so far so good for Loft9 co-founders Ed Beals and Mark Birzell. To learn more about the firm's unique model, Consulting's One-on-One recently sat down with Birzell.
Consulting: What gave you the idea to want to start your own firm?
Birzell: Ed and I were leaders in business development and client delivery programs at our prior firm [Point B] and saw a high volume of client needs that was being filled by single-shingle or 1099 shops. These projects didn't require big teams or much senior-level talent, but they were real clients that needed real help. The founders of Point B weren't interested in this business, fearing that it would dilute their firm's high-end operations and strategy brand, but they did become minority equity partners in our business.
Consulting: What's unique about Loft9′s business model?
Birzell: We do a lot of things different here. First, we offer clients value that far outstrips any 1099 shop. We're a true firm with 23 consultants and plan to have 35 to 40 by the end of 2011. The client may only see one to two of our associates on any given project, but there are typically three to seven other team members behind the scenes offering help, oversight and management of their engagement. The one-person shops can offer only that one person. We can offer a consistent front person, a primary contact, but swap out the consultant doing the work based on the inflection point in the project. You can have a project manager one day and then, when the next phase begins, we can bring in someone to work out the IT configuration and then replace that person later with a project leader. It can remain a one-person project, but depending upon the skills needed, it doesn't have to remain the same one person throughout the lifespan of an engagement.
Consulting: How is your firm different from the perspective of your consultants?
Birzell: We recruit young professionals who have very high potential and are very interested in wanting to learn. Roughly 20 percent of our firm is comprised of analysts, those just out of school. They go right to work supporting projects, with the oversight of senior consultants and partners. Most remain at that level for two to three years. The bulk of our employees—about 60 percent of our staff—are what we call consultants, those that work collaboratively on client projects. The expectation is that they'll remain at that level for three to four years. The remaining 20 percent is comprised of senior consultants. The training they receive is more about how to lead virtual teams and manage groups. We also work with them on how to take their careers to the next level, which may very well be outside of Loft9.
Consulting: You're training your most senior consultants to leave the firm?
Birzell: We know that with our business model we can't hold on to everyone for 20 years. We may be able to retain some of those folks as new management positions open, but we want to be supportive of everyone's careers and embrace the fact that we're a development and training firm. Ed and I are entrepreneurs and are willing to share what we learned in helping our senior staff start their own company.
Consulting: How does that 'development and training' mentality trickle down to the more junior staff?
Birzell: At other firms, employees are considered to be revenue-producing assets. We want to know, from day one, what they want to do next. We want to understand who you are as a person and as a professional. We take a lot of time to understand what you want to learn and work to fill those knowledge gaps. That message is really resonating with recruits. We're successful on campuses. And we recently hired two mid-level consultants from a big brand IT consulting firm.
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