Market conditions

Our latest survey of buying trends among clients has a curious anomaly in it.
When we ask people which consulting services they’re planning to purchase, we get a broadly, though not massively, positive response. Technology is high on the agenda as organisations move beyond the cost-cutting and regulatory change that dominated the consulting industry during the recession and its immediate aftermath. Outsourcing consulting, too, appears to be making something of a comeback after two very lacklustre years.

Everyone in consulting knows that the Big Four accounting firms (Deloitte, Ernst and Young, KPMG and PwC) have all grown significantly in the last few years. Indeed, many of us have suspected that they may have out-performed the market, sometimes by a factor of two or three. But none of us could put a figure on what that means for market share.

As part of our research on consulting in Europe, the Middle East, India and Africa, we inevitably asked consulting firms how much they’d seen prices fall during the recession.

Overall, we estimate that fee rates among multinational corporations have dropped by between 10% and 15%, and those among large regional or national companies by as much as 50%. The most precipitous declines have now levelled off and in some highly specialised and sought-after areas there are even indications that prices are edging up.