In the last few years, the global consulting firms have had a mixed ride. Client litigation, strategic missteps, regulatory constraints, and firm spin-offs sent “newco” firms into a tight market in search of the next mega-client.
The big firms are leaner, but many have familiar handicaps: top-heavy organizational structure, burdensome overhead, high rates, and reluctance to pay top people the premium they deserve for enduring the consulting lifestyle.
Refugees from the big firms have spread into the industry, forming their own firms and joining others to take on Goliath. Except for clients who are joined at the hip with large firms, in many cases, small firms are winning.
The fact is that clients aren’t defaulting to the big-name firms like they used to, and many of the blue-chip brands are competing for work against tough, smaller firms.
Clients are looking for results, and they don’t care where those results come from. If a small firm offers a better, more experienced team at a lower cost, clients will take it. A past relationship with a big-time firm won’t sway the buying decision like it did in the past.
This is a golden time for smaller firms, but only if their marketing is on target and their people are superb.
Realizing this, the big firms are using their deep pockets to upgrade talent and bring focused services to clients, as they continue to pitch the one-stop-shop advantage. Reading firms’ public declarations confirms that the big firms will also continue to push hard into the middle market.
Even so, the narrow, problem-focused small consultancy can grab a fair share of the work from the giants by bringing talent, solutions, a track record, and a reasonable rate structure.
This battle is far from over.