From what I remember in the novel, Vito naming Tom the Family Consigliere ruffles a lot of feathers in the crime world, they take a serious blow in the respect department (as I recall, they're called the Irish Family or something by the other Families). Not only that, but to the underlings in the Family, the made guys, it had to be a slap in the face, especially in the 1940s when Italians and Irish people didn't get along. Also, imagine if you're Tessio say. You're smart. You've been with Vito almost as long as Genco was. This Irish lawyer kid gets a promotion that technically puts him above you in the pecking order.

It's a choice that's never made sense to me. Yes, Tom's savvy as a lawyer was extremely helpful, but I feel like they could've still exploited his skills without making him Consigliere. He doesn't really do much in the role, either - Sonny doesn't seem to take much of his counsel, for example, and Michael removes him as soon as he takes over. Even when Michael technically makes him Acting Boss, it's really only Acting Boss of the legitimate Nevada wing of the Family, not the crime family as a whole (presumably, Joey Zasa or someone else is given Frankie Five Angels' role as Street Boss of NY).