Big Four burst back into market

The Big Four’s consulting and advisory services revenues could be between 30%
and 50% higher than in 2004 when they reveal their next year- end results,
according to industry experts and observers.

Kevin Narain, MD of Parson Consulting, said the bar ‘would be raised by up to
50%’ on top of existing revenues when the Big Four’s results emerge over the
coming months.

‘If you think that on average the Big Four charge between £180,000 and
£200,000 per delivery, per head, multiply this by 150 or 200 staff then you will
have a very large figure in the next set of year-end results.

‘’The Big Four are heavily involved in Sarbox work helping get an
organisation ready for that piece of compliance legislation on top of audit
work, and this is a huge driver.’

Despite not splitting its revenues, PricewaterhouseCoopers’ consulting
figures are estimated to be around £200m, which could rise to £300m, while
KPMG’s are currently around £150m. Deloitte, the only firm not to have
previously hived off its consulting arm, has consulting revenues of £315m, while
Ernst & Young only re-entered the advisory services market in May this year.

An E&Y spokesman said he ‘wouldn’t be surprised’ if the other three
firms’ consulting revenues grew ‘dramatically’ due to the ‘very attractive’
large public sector projects on the market.

Fiona Czerniawska, director of the Management Consultancies Association think
tank, said rises were almost certain, but that the true level of consulting
revenue could be distorted.

‘Their figures in this area are certainly rising but there is an awful lot of
variety in the work they do and it is often blurred. Some work is tax advice and
consulting, some is in compliance and some is strategic. It is very difficult to
tell where this is being placed and how it is defined.’

A PwC spokeswoman said that the firm would not speculate on its consulting
revenues before its annual report was released next month. As Accountancy Age
went to press, Deloitte was due to release its results but refused to comment.
KPMG also refused to comment.

Related reading