I can just see that this Partners only chat went from discussing net worth and global vacations to doom and gloom. Did the consulting environment really change that much in just under a year? Or, are we leaders over reacting? All opinions and thoughts are welcome. We can only impact positivity based on discussions (hard or soft) and helping each other grow together.

I can’t speak to the tone change, but I do think that many Partners are realizing this is a different business than the one we started our careers in. And AI may have the same tectonic impact on our business model that the Internet had on retailers and retail stores. Some will adapt and thrive, but the business model is shifting and none of us know where it will all shake out. Add in the political craziness (at least in the US) and the fact that the economy may be teetering on a knife edge, and I think there is legitimate reason for pessimism around our industry in the near to medium term. I would not want to be just starting my career in consulting today because I don’t know what the next 5-10 years will hold, but I LOVE the 25 years that I’ve been doing it.

It has been a fantastic run, even through the up and down cycles for me, but I think that reasonable skepticism about the future prospects of “consulting” (and probably professional services in general) is fair.

I think the large consulting firm model is broken. The value of that model was access to global knowledge and smart young talent that weaponizes that into billable hours. AI democratizes that. And then industry has also tooled up with consulting-trained talent the last 20 years. Other trends like jumbo-sized firms like Accenture, PE money, driving commercial priorities towards long term stable EBITDA, which means taking on PMO/staff aug projects and a race to the bottom.

There’ll be three main consulting models in the future: 1) platform agnostic SIs (not really consulting in my estimation)
2) those that rely on a proprietary tech stack to unlock insight and help client operations, and
3) medium-sized boutiques with specialized industry knowledge and high margins.

Well globalization is unraveling, and all of our businesses are based on our ability to optimize for this status quo. Now we don’t know what’s going to happen so it’s impossible to plan for anything.

Uncertainty is the enemy of business progress.

And to make this local - I just cancelled a $400k home renovation. Might need that cash.

Just hit 20 years at ACN, 5th year a MD. The financial promise of MD no longer holds water and we’re not keeping up with the market in terms of MD Comp.
1. Well we’re not partners any more, we’re MDs, which is one of many the many negative tectonic shifts at ACN.
2. Celebratory grant hasn’t changed in 20+ years.
3. Stock price under Julie has been terrible, shocked she’s not gone. Went from 4 acquisitions per year to 25+, no organic growth. We have lots of money to reward MDs and we’re being told “tough year”/take one for the team even when we meet our goals.
4. Too many ineffective experienced hires, need to get back to Analyst basics.
5. We’re over priced in the market and senior leaders don’t believe it. See #4.
6. No MD SAL raises (insane and immoral), L5&6 almost make as much as me now. We have 20 something L7s making $200k. WTF.
7. Manish moved the PA goal posts to engineer yet another way not to reward MDs.
8. I have 2 years of stock left before I have to move my family of 5 into a condo.

I know, woe is me MD but I thought I’d be more financially stable as MD at the largest consulting firm in the world.

Beyond the concern about the declining remuneration, do you find consulting less fun than it used to be? I was a management consultant 1993-2021. In my early days at Booz Allen (when it was still an MBB-type strategy firm), we often had small teams solving tough strategic problems. The camaraderie with colleagues and clients was great. Travel budgets were generous. Junior people felt like they were part of the firm, not just a unit of capacity. We worked hard, but we did so together in team rooms -- not alone at home. Practice meetings were held at fun locations and had fun activities (e.g. skiing). Although the attrition rate was pretty high, advancement was generally fast for people who stayed in the firm. Those were the days :-)

I can only speak for myself. In 18 months, I went from “let’s look for a new house that’s bigger” to “let’s make sure we start saving more”. It’s a very different world now where I went from pushing away executive recruiter reach outs to getting nothing when I proactively reach out.

6 inches

I'll speak for myself OP. I've been affected unfortunately by all the "doom and gloom", but having been around for a quite some time, I know that the market is correcting itself after the rollercoaster we all experienced in the past few years, so I'm not letting that psyche me out, and I'm pushing along to find my next role.

Its all a matter of perspective and mentality. Positive mentalities remain positive in the most dire circumstances, while negative ones will consistently fail in seeing the upside in any situation.

And on that note, I wish everyone good luck and more success (especially for anyone in the same shoes)

We as a couple decided to live off one income about 18 months ago just due to the shifts in what we saw on the horizon. And it has been more disruptive than we even expected. All about insulating ourselves so we paid off the house (zero debt now) and now live off just one of our incomes and save the rest. It is the only way I can see us feeling less stress with everything changing so rapidly. But I hope for all of us this is just a doom cycle and we all start feeling more optimistic soon. Wishing you all health and prosperity.

AI (winter) is coming

I’m 39 and this is a hell of an opportunity for young gun leaders in consulting. The staff will shrink by half in the next 7-10 years and the word consulting will die (much like strategy consulting is dead). Meanwhile platforms may become more powerful and sticky. My view is that the biz model is going to look a lot similar to professional services units inside tech firms. It will take its course though

Reality is that the markets are changing in u précédent ways and consulting firms are still using outdated tools and an astonishing lack of innovation to adjust for market changes. No one was able to productive their offering, we are still and P x Q businesses, we have no annuity incomes at all, so our funds are at risk quite constantly. It is astonishing how consulting firms are not able to move as far as the market.
I don’t think it is a doomed business, but if we don’t get more innovative on how to deliver services, we will get outpaced quite fast

I expect there to be a seismic shift in the industry over the next few years. AI, clients generally souring on the benefits of external consultants, uncertainty with the US economy - while there have always been cycles, this one feels different. I have loved this career, but it feels like a good time to start thinking about what’s next.

We are growing organically and seeing solid demand for differentiated capability

No doom and gloom outside of the nationalistic fascism impacting the public sector practices

I think it’s a long term decline that’s accelerating. For most people in the industry relative rewards have been falling for 20 years. The combination of increasing competition, more savvy buyers and now AI does not bode well for the future of the industry.

Strategy consulting is dead? You mean as a standalone offering or nobody does strategy anymore?

I appreciate everyone’s thoughts and participation. It does seem like we are in one of those glut times.