My advice may be a little different than others and may not represent the experience of the majority of applicants. . . but here it is anyway. You specifically mentioned Counseling Psychology PhD, which is different from Clinical Psychology, including in the application process. Many clinical programs don't require any sort of Master's degree, however there are several Counseling Psych that do. Often, those programs don't care if it is from an M.A in Psychology or a degree that is practice based. I recently applied to and was accepted into a few Counseling Psych PhD programs and I found that many of the programs preferred those that had some kind of counseling background in their Master's degree because you come in pre-oriented to the 'Counseling' way of doing things (i.e. CACREP accredited programs).
For me personally, I got an M.Ed in Professional Counseling (Specialization in Community) and I found it very helpful. This was because after my first round of PhD apps I did NOT get into a program, yet I was able to practice for the year in between as a Licensed Associate Professional Counselor in my state, giving me a leg up on practical experience, including working with managed care, maintaining my own client caseload, working withing a community mental health organization, receiving additional trainings, etc. For me I purposely chose the M.Ed which allowed me to be licensed as a back-up if I didn't get in the first time, which worked out perfectly. It also helped me sharpen my reasoning for applying to PhD programs and helped boost my statement of purpose as I could speak to first hand experience of why PhD positions differed from the M.Ed positions in my organization and practice in general. Also, during interviews this time around, I was in several groups where it was clear that my clinical experience put me in another league compared to some other applicants, including how I was able to respond to social justice related questions (I work with only Medicaid clients as an LAPC).
Having said all that, a practicing degree typically offers NO RESEARCH EXPERIENCE. This is not good when applying to PhD programs, Counseling, Clinical, or otherwise. So make sure that, if you choose a practicing degree, you will have access to professors who do research. At my school the M.Ed faculty were also the faculty for the PhD program, so I was able to join a research team and do research for almost the entirety of my program. I also continued to work with the team for ~4 months after I graduated. This helped my applications tremendously, especially during interviews when I was able to speak about seeking out research opportunities on my own. I think it really showed my dedication vs. having mandatory research.
