Top 50: growth industry

Consulting revenues have grown impressively this year and if this boom
continues, we can expect more emphasis on this service line from the Big Four in
the future.

PricewaterhouseCoopers’ figures made analysis complicated, though, as the Big
Four firm supplied business advisory, corporate finance and insolvency as one
figure. Our sister publication Management Consultancy has endeavoured to shed
some light on these mysterious numbers, by estimating that PwC picked up £216m
in consulting revenues.

Last year, the firm provided these figures under the corporate finance
banner, more evidence of a sea change. Perhaps next year, it will be joined by
Ernst & Young, which has made it clear that it is recruiting heavily in
‘business advisory’, and is looking to grow revenues to more than £1bn a year by
2010, according to chairman Nick Land. Its UK firm could contribute as much as
£150m by then.

E&Y has been shy about referring to this stream as ‘consulting’, due to
concerns that it will appear as if the business has returned to IT
implementation – which the firm says it has no plans to do.

There are no such concerns with IT advice, though. KPMG revealed incredibly
strong figures for the year in this field, and revenues grew by 48% to £225m.
The firm was careful to point out, however, that it provides IT advice and not
‘implementation’. ‘The market is still growing, there’s more for everybody,’
says PKF consulting partner Cath Hardaker.

One of the key indicators of consultancy’s buoyancy, according to Hardaker,
is the aggressive recruitment undertaken by firms of all sizes. Paradoxically,
this search for top talent also affects the firms’ clients, who are often
looking for the same people.

‘Clients aren’t finding it any easier to recruit, so they look to the likes
of us, who have people that can meet deadlines, deliver on projects and have
attention to detail,’ she says.

Public forum

There’s also been no let up for demand for consulting advice in the public
sector, whether it needs help managing NHS finances, or helping government meet
efficiency targets set through the Gershon Review. ‘The pressure central
government is under at the moment, I don’t see any fall in demand,’ says one
insider.

The mid-tier firms are taking up some of this demand, and those that provided
a breakdown for consulting revenue performed well. Consulting revenues at Moore
Stephens and RSM Robson Rhodes grew by more than 40%, which compares favourably
with audit, tax and insolvency streams in terms of size.

PKF and Macintyre Hudson also saw growth, albeit more modest. Surprisingly,
Baker Tilly, which has a thriving IT advisory arm, did not divulge its figures.

There were some notable exceptions to growth. Chantrey Vellacott’s consulting
figures stand at £800,000, a 25% fall on 2005. Haines Watts saw an 8% drop in
fees and Kingston Smith posted a 6% drop on the previous year. Smaller firms
Mercer & Hole, Price Bailey and Francis Clark also saw consulting dips –
despite posting overall growth in fee revenues.

In general, though, it was a good year for consulting as firms showed that
they could still provide expert advice that makes money.