PROFESSIONAL SERVICES FIRMS HAVE been threatened with disruption for a long time. In 2015, Richard and Daniel Susskind foresaw that technology would cause a "steady decline in the need for traditional flesh-and blood professionals," while more recently, CB Insights said that "a tectonic disruption is hitting management consulting."¹ Even earlier, Clayton Christensen and colleagues warned, "Although we cannot forecast the exact progress of disruption in the consulting industry, we can say with utter confidence that whatever its pace, some incumbents will be caught by surprise."
But things have not played out as predicted. In consulting and law, the established firms are as influential and profitable as ever.³ Many potential disrupters have come along. Some have failed, some have gained strong niche positions, but none has challenged - let alone toppled - the existing order. Most established leaders have used a wide range of strategies and tactics to adapt quickly to the threats.
As is the case in many well-established industries, professional services markets are dominated by a small, clearly identifiable group at the top and large numbers of lower-tier firms operating in their shadow. Consulting's giants include McKinsey, Boston Consulting Group, and Bain; technology-based firms Accenture and Capgemini; and the Big Four accounting firms Ernst & Young, Deloitte, KPMG, and PwC. In law, the top tier includes the five London-based firms informally known as the Magic Circle Linklaters, Clifford Chance, Freshfields, Allen & Overy, and Slaughter and May - along with Kirkland & Ellis, Latham & Watkins, and DLA Piper.
This story is from the Summer 2023 edition of MIT Sloan Management Review.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the Summer 2023 edition of MIT Sloan Management Review.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
The Trouble With Your Innovation Contests
Not all innovation contests should be winner-takes-all or judged by senior executives. New research shows how to structure contests to meet specific goals.
Scaling Automation: Two Proven Paths to Success
Lessons from two leading hospital systems show how to overcome the obstacles to automation.
How Tech Fails Late-Career Workers
Managers must make deliberate choices to support older workers' use of complex technologies.
Building Culture From the Middle Out
Midlevel leaders are critical to fostering an organizational culture that’s healthy and vibrant.
Why Manufacturers Need a Phased Approach to Digital Transformation
Those that succeed with this difficult work break it into three stages, each with its own guiding metrics.
Will Large Language Models Really Change How Work Is Done?
Even as organizations adopt increasingly powerful LLMs, they will find it difficult to shed their reliance on humans.
How to Make Better Friends at Work
Friendships in the workplace can enrich our lives and make us better leaders and workers if we make the effort to cultivate truly healthy relationships.
Health Care Platforms Need a Strategy Overhaul
To succeed, digital health platforms must shift their approach in three key areas.
Steer Clear of Corporate Venture Capital Pitfalls
Big companies and risk capital can be awkward partners. Here’s how to get corporate venturing right.
New Markets, New Opportunities: Identifying Where and How to Make Your Play
How do leaders determine whether to build a new business around a promising new technology?