Business model

Client-side or supply-side? It seems such a simple question, but in practice the response is much more complicated.

Consulting firms can be notionally divided into those that offer independent advice and those which have obvious ties, perhaps to a specific vendor if they’re an IT consultancy or to a parent company in the case of the consulting arm of an outsourcing company. In theory “tied” firms have a vested interest in selling the services of their partners or parents and therefore cannot be trusted to act in their clients’ best interests.

One of the points often made about the consulting industry is that barriers to entry are low.  But this isn't strictly true.  They're low in theory (there's no regulation to keep new entrants out, for example) but history suggests they're high in practice.  Over the last 30 years there are remarkably few firms which have entered the market and achieved sustainable growth.

Why is it so difficult for small firms to become mid-sized firms, and for mid-sized firms to become large ones?

Second tier. Middle tier. Neither term is particularly flattering. Both inherently suggest the existence of a first tier or a top tier, which in turn suggest that the distinction between the two tiers is one of quality. And with the ‘third’ tier cornering the ‘specialist’ tag, that one’s out of the question, too.