In a time of political and economic uncertainty, while many companies are seeing their market share threatened by the gig economy (Airbnb, Kapten, etc.), the management consulting firm business model is as stable and brighter than ever. Might freelance consulting shake up their long-established position?
Management consulting as we know it…
Consulting as people “think” they know it has always involved sending smart junior consultants into organizations for a finite period of time and asking them to recommend “copy-paste” solutions for high fees in return. Easy right?
Well not anymore! Like every firm in the 20th century, the archetypical model developed by the big consulting firms is undergoing profound transformations. As we know, consulting is primarily a client-driven industry, and the changes encountered by clients in every field are obliging management consulting firms to always adjust their services, methods and strategies in order to survive.
Clients are longing for higher flexibility, lower costs and more personalized services.
Is the era of big firm consulting coming to an end?
Following the recession, increasing numbers of independent consultants entered the market. Freelancing offers consultants flexibility and freedom while offering clients a more on-demand service at lower costs. With several studies predicting that up to a full third of the workforce in the next 10 years will consist of freelancers, the question emerges: why are more consultants shifting towards the gig economy?
“I wonder why I didn’t do it earlier”, replied Thomas (who worked previously for 6 years as a BCG consultant and who kicked off his freelance consulting career back in January) when asked about what surprised him the most about freelance consulting. We can’t talk about consulting without mentioning work-life balance. According to a study, 76% of respondents to B2E’s poll cited greater flexibility as one of the main reasons why they opted for freelance consulting, and Thomas couldn’t agree more. According to him, the ability to control your agenda and adapt it to your pace is amazing.
Added to that, money is also not a problem. As stated by Thomas “consulting firms take 80% of what they charge. While I charge 3 to 4 times less and take 80%”. Thus, he finds himself making in 9 months what he would’ve made in more than 1 year at BCG”.
Evidently, freelance consultants initially presented minimal threat to the dominating market leaders. So, the primary question that remains is: how do they get clients and compete with well-established firms? NETWORKING. Clara, a freelance consultant and former junior consultant, was highly surprised by how much it depends on connections. She expected to wait a few months before finding a first client, but after one LinkedIn post where she announced her new career in freelance consulting, she received 3 queries expressing interest in only 2 weeks.
The freelance consulting world isn’t all sunshine and rainbows
Despite all the freedom and prestige that comes with being a freelance consultant, many parameters seem to break the dream. Working alone also means missing the culture and collaboration that comes with permanent consulting. Added to that, many freelance consultants might find themselves lost, especially at the beginning of their journey, with no mentor or manager to train and guide them on their strategy and no tools, which are abundantly available when in a firm.
Furthermore, the biggest challenge described by both interviewees is dealing with the uncertainties and the risk that comes with it. The moral of the story, as accessible as it might seem, is that freelance consulting is no joke. It takes considerable risk aversion, self-discipline and a significant tolerance towards uncertainty.
[Plot twist] Management consulting firms are the main catalyst for future successful freelancers
While many might argue that there are little to no barriers to entry for this market, the value of big consulting firms (at least for consultants) is still pretty much irreplaceable. As Thomas explains, “consulting firms are excellent schools”. It was BCG and its brand image that allowed him to flourish later on as a solo operator and he does not see any alternative easy way.
The other main reason why big consulting firms are not really the enemy is the different client targets. Freelancers would be a good fit for younger types of company, bringing a unique perspective based on their experience. While big consulting firms are more suited to long-term/big missions which need lots of human resources.
Freelance consulting is not the future, but “a big part of the future”
With that being said, independent firms won’t totally replace consulting firms, but a revolution will definitely shake up the long-established world of management consulting, pushing them to adapt and change the way they work, in order to co-exist with the rising number of independent consultants.