As long as there have been consulting and professional services giants, there have been split-offs — groups of experienced experts deciding to start their own firms and control their futures.

In recent years, I have witnessed this trend rapidly accelerating, aided by low-cost technology, clients’ growing acceptance that the highest levels of skill can reside in smaller firms, and the broad economy’s embrace of nimble startups.

A decade or two after the founding of these firms, however, there has typically been a vexing question: to whom do the founders sell? Certainly, it seems, not to one of the very large firms an upstart has successfully offered itself as an alternative to — for employees and for clients. (More on that below.)

Thus, the decision of one of the country’s fastest-growing consulting firms, 300-professional MorganFranklin Consulting, based in suburban Washington, D.C., stands as a valuable lesson for small- and mid-sized professional services firms everywhere. MorganFranklin’s choice offers a path to long-term sustainability for other professional services firms, one that also offers financial rewards for founders and employees alike.

MorganFranklin, founded in 1998, chose to remain independent and, after an exhaustive investigation of ownership structures, the founders, senior management, and equity plan participants sold the firm to an Employee Stock Ownership Plan, or ESOP. The move positions MorganFranklin to retain its impressive talent and recruit still more stars from successful consulting firms as well as large public companies and other sources. It also provides a platform for increased engagement and productivity by employees who are now owners.

The firm’s leaders surprised themselves, says C.E. Andrews, CEO, in choosing employee ownership: “You could not have started with a more dismissive group of skeptics, including myself. The ESOP option sounded too good to be true. We thought there had to be a catch, so we knew we needed to thoroughly educate ourselves.”

Indeed, at each meeting to consider the firm’s future, each member of the senior executive team recalls expecting to finally hear the problem that would rule out the ESOP format. Instead, says CFO Jeff Pagano, “one by one, it checked every box we were looking for.” Adds Eric Reicin, the general counsel, of the team’s initial ESOP negativity: “We set aside our pre-conceived notions and, in the end, a group of ESOP skeptics turned into employee ownership supporters.”

This was not a case of a single ESOP enthusiast persuading the others, but of a senior executive team feeling duty bound to investigate every viable option. The episode helps explain why MorganFranklin has been so successful, gaining very large private- and public-sector clients and attracting top talent from around the accounting and consulting industry. They’re intellectually curious and honest. And they’re self-effacing. Just the kind of people everyone likes to do business with.

Co-founder Ron Morgan, 45, says the commercial- and government-consulting arm of the firm was founded, like many businesses, almost by accident. He and two partners, Robert Morgan (Ron’s brother and CEO of MorganFranklin from 1998 to 2013) and Robert Franklin (leader of the firm’s former National Security Solutions business), were starting a national security government contractor. Ron Morgan, who’d worked at PwC, was to be the startup’s CFO; the other two founders had applicable government experience. Before he left PwC, Morgan says, a client tried to hire him. Morgan demurred, but ended up taking on the work as a consultant, figuring the new startup could use the cash flow, even if the work was unrelated. Over time, other clients and consulting professionals came aboard.

The national security business was a huge success, growing to about 200 employees before it was sold to SRA International, Inc. in 2012.

That left MorganFranklin’s commercial and government consulting business, which had also grown rapidly with Ron Morgan as its leader. Early on, the Sarbanes-Oxley Act of 2002 loosened traditional public company auditors’ grips on consulting projects at their clients, channeling much work to smaller firms like MorganFranklin. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and additional regulations further accelerated these opportunities. At the same time, the federal government increased its use of outside accounting consultants, and the firm won large amounts of that work. MorganFranklin in recent years has also built a strong specialty working for financial services, consumer products, and technology companies, and shepherding initial public stock offerings.

The sale of MorganFranklin’s national security business provided an opportunity to rethink the consulting firm. And, in what I view as a sign of unusual modesty and unusual business savvy, the first thing the three founders did after the sale was to decide to go looking for a big-time CEO to lead the consulting operation. That’s right, the three founders stepped aside, seeking a replacement CEO with the experience of building and running far larger and distinctive business services firms.

Enter C.E. Andrews, former CEO of Sallie Mae, who had earlier led Arthur Andersen’s worldwide audit and business advisory practice. Most recently the president of RSM McGladrey, Andrews’ profile in the accounting and consulting world is such that, in recent years, when major executive vacancies occur, he’s among the rumored candidates.

Ron Morgan knew, after the sale of the national security business, that any sign that the consulting operation might also be sold could cause an exodus of talent. “It takes six seconds for people to say, ‘What’s next? What’s going to happen to me?’ ” And he and the other founders wanted the business to remain independent and to grow. Attracting someone of Andrews’ stature helped reassure and convince all hands that the aim was to expand MorganFranklin, not to sell it off.

The founders “wanted to do something,” Andrews recalls. How does a 300-person firm succeed in a world with so many high-quality brands like the Big 4, McKinsey, Booz Allen, and Accenture? “First, we view these firms as ‘partners,’ not ‘competitors.’ We want to earn their trust and respect, leading to their comfort with our presence at their clients, often from their referral and endorsement.” How does a firm earn such a role? Hire fairly senior, exceptional people from those very firms, for a start, a few capable of bringing business with them; offer clients a more experienced project team, absent the newbies assigned to big projects by major consultancies; move fast, and perhaps do the work a little more cheaply.

Without legions of inexperienced employees to keep busy, MorganFranklin can take a different approach on some consulting work. For instance, the firm hired Charlie Price, a 28-year veteran FBI Special Agent specializing in major fraud investigations, to co-lead its corporate investigations and dispute solutions practice. And while Price is capable of overseeing a massive document analysis, that’s not his preferred approach. Rather, he’s known as a highly skilled interviewer of witnesses and suspects who advises clients to seek to short-circuit what could be drawn-out investigations by turning such interview subjects into helpful guides to the workings of a fraud or other scandals. Quick yet thoughtful results, as opposed to turning over every piece of paper, can produce loyal clients.

What’s more, the significantly lower overhead of a small- or mid-sized firm can, at the same or even lower billing rates, make it more profitable. MorganFranklin’s 2015 revenue reflected a more than 50% three-year growth rate, and the firm is solidly profitable.

After C.E. Andrews came aboard, the three founders wanted to move ahead with selling their stakes, initially to MorganFranklin senior leadership. As is common in the professional services sector, the firm set up an LLC and about a dozen senior leaders borrowed funds to buy roughly 20% as equity participants. That went fine. But when it came time a year or so later to sell them a second tranche, the value of the firm had risen and the personal debt obligations involved began to look a little scary – something that gave Andrews pause as he considered the potential toll on senior leadership. The plan wasn’t going to get to 40%, let alone the target of 100%. It was time for a Plan B.

The founders and senior leaders had examined the prospect of selling the firm to a bigger consultancy. But that was rejected. Employees – and many clients – had come aboard specifically for an environment that was different than the industry’s largest players. “It really would be quite disingenuous” to sell to a large, strategic buyer, Andrews says. As for private equity buyers, the founders did not find appealing the lengthy earn-out provisions and other contingencies involved in selling a service business to financial buyers. “And, even more important, we feared dilution of our special culture and identity,” Andrews says.

An advisor had suggested an ESOP. And the MorganFranklin leaders had heard the usual (if not entirely accurate) warnings: corporate governance would be a messy democracy; the format would prevent future acquisitions and limit growth; and it is just too complex and isn’t competitive on value to the sellers.

Wary, but diligent, they found otherwise: the governance of the company post-ESOP on a day-to-day basis is pretty much what it was before, with a board and senior operating executives calling the shots; while there’s some debt to pay down from the ESOP transaction, the format actually works quite well in acquisitions and MorganFranklin now plans a mix of organic growth and, longer-term, external growth; any transaction involving multiple layers of equity and debt is somewhat complex, but MorganFranklin is full of professionals who advise clients on these matters regularly; ESOPs compete effectively on value to sellers.

Sums up C.E. Andrews: “We can do this.”

I should point out: Companies with severe top-down management approaches rarely adopt an ESOP ownership; it just isn’t in their blood. MorganFranklin already had a highly engaged workforce, less regimented than its larger competitors. (Full disclosure: MorganFranklin is a client.) And the firm was well set up to take advantage of employees’ initiative. Jeff Henry, a 28-year old senior manager who came from Booz Allen, has led client engagements. He has already brought some business in at MorganFranklin, receiving a bonus for doing so, and he was recently named to Consulting magazine’s annual Rising Stars of the Profession list.

“I learn significantly faster,” Henry tells me, “as opposed to, OK, you’re the young guy, just sit in the back.” MorganFranklin, with the ESOP, has a better chance to keep Henry longer-term, too. “I’ve wanted to get to the point where I had an ownership stake,” he says. Upon joining, “I never really thought MorganFranklin would be the place. I thought it would give me experience.” With the ESOP, “it makes you think about your work at the firm in a different way.”

Aryn Christman, 27, came to MorganFranklin seeking more varied assignments after spending two years working with a single client at a Big 4 firm. She’s been working on IPO teams for numerous MorganFranklin clients. “It’s pretty cool to be in these environments,” she says. “There’s an energy and a buzz.” Employee ownership “is another lever that really gets you thinking long-term,” she says. Christman is now on the employee engagement committee, which, among other things, is helping explain – and find ways to capitalize on — the ESOP to rank-and-file employees. She’s engaged.

Ashley Baquié, the human resources chief at MorganFranklin, sees the ESOP as a major tool in recruiting and retaining professionals in what has become a very competitive market. MorganFranklin plans to add at least 25 people this year. Doing that with high turnover would be very difficult. So far in 2016, turnover is running far below past years. People like working at places where they can contribute, where they matter, and where they can share in the results individually and as a team.

Any ESOP-owned company will tell you that increased engagement comes from at least two sources. One is the simple fact that workers are now owners and feel differently about their company. The second is the specific value they realize from that ownership; annual retirement statements start out showing modest sums and then typically grow more rapidly as companies grow, pay down ESOP acquisition debt, and retain talent.

For MorganFranklin, it’s just beginning. Says Ron Morgan, who serves as Chairman of the Board of Directors and stays actively involved through a business development role: “It’s too soon to declare ESOP victory and say our workforce engagement has risen. But we were already at high levels of engagement, fortunately, and more and more I’m hearing from our people that being an owner changes how they feel about MorganFranklin. There is no question in my mind that it will reinvigorate our workforce.”