I would add one more category, which is large design consultancies such as Ideo and DC. I think they provide an environment in between regular sized firms and in house design. They all have their advantages, so it’s a hard choice.
Here’s my opinion and break down:
You get to be a part of the entire process, from sketching to your design going onto the shelves.
Able to work side by side with various departments, like marketing and engineering.
You have more projects making to the shelves than dying.
More stable employment
Possible better benefits
Projects may take many years to complete, so it’s bad for junior designers who need stuffs in their portfolio to show.
Process is stretched, so it’s rather low energy environment.
Harder to push for progress because you got to convince the big shots who know nothing about design
Work becomes too formulated
Lots and lots of projects of wide range.
High energy, busy, but probably more fun.
Learn a lot simply because you are exposed to more things other than just design.
Hands on more things.
More showable work in portfolio, probably more opportunity to participate in various competitions.
Meet all kinds of clients.
Most projects are phase one stuff, and less likely to make it to production.
Maybe less pay due to competitive environment?
Less resources to make things happen.
Unstable work source
Probably not able to control the design too much as in the case of an in-house design department.
Excellent resources to push for improvements
Excellent resource to provide a whole package of services
Talent pool to learn from
Wide range of projects, and mostly production stuffs
Deal with various clients
Since the firm usually has good reputation, companies come to them for a reason, therefore usually have more room to explore and improve what the client wants.
High profile projects.
More stable job, benefits and such.
Corp politics may still kick in at times.
Bigger group means decisions may be harder to make. More considerations.
Energy level may be dampened by the size of the group, simple because the density of interaction between individual designers is lower.
So large firms seem much more attractive, but it really depends on the individual’s preference. Whether you fit in the group is the most important thing after all and this is independent of the size of the group. I myself have no idea yet.