Killing Consulting: Knowledge Draculas Live Forever
July 14, 2025
No smart software involved with this blog post. (An anomaly I know.)
I read an opinion piece published in the Substack system. The article’s title is “The Consulting Crash Is Coming.” This title is in big letters. The write up delivers big news to people who probably did not work at large consulting companies; specifically, the blue chip outfits like McKinsey, Bain, BCG, Booz, Allen, and a handful of others.
The point of the write up is that large language models will put a stake in the consulting Draculas.
I want to offer several observations as a former full-time professional at one of the blue chip outfits and a contractor for a couple of other pay-for-knowledge services firms.
First, assume that Mr. Nocera is correct. Whatever consulting companies remain in business will have professionals with specific work processes developed by the blue chip consulting firms. Boards, directors, investors, non-governmental organizations, individual rich people, and institutions like government agencies and major academic institutions want access to the people and knowledge value of the blue chip consulting firms. A consulting company may become smaller, but the entity will adapt. Leaders of organizations in the sectors I identified will hire these firms. An AT Kearney-type of firm may be disappeared, but for the top tier, resiliency is part of the blue chip DNA.
Second, anyone familiar with Stuart Kauffman (Santa Fe Institute) is familiar with his notion of spontaneous order, adjacency, and innovations creating more innovations. As a result of this de facto inferno of novelty and change, smart people will want to hire other smart people in the hopes of learning something useful. One can ask a large language model or its new and improved versions. However, blue chip consulting firms and the people they attract usually come up with orthogonal ideas and questions. The knowledge exercise builds the client’s mental strength. That is what brings clients to the blue chip firm’s door.
Third, blue chip consulting firms can be useful proxies for [a] reorganizing a unit and removing a problematic officer, [b] figuring out what company to buy, how to chop it up, and sell of the parts for a profit, [c] thinking about clever ways to deploy new technology because the blue chip professionals have first hand expertise from many different companies and their work processes. Where did synthetic bacon bits originate? Answer: A blue chip consulting company. A food company just paid the firm to assemble a team to come up with a new product. Bingo. Big seller.
Fourth, hiring a blue chip consulting firm conveys prestige to some clients. Many senior executives suffer from imposter syndrome. Many are not sure what happened to generate so much cash and market impact. The blue chip firm delivers “colleagues” who function to reduce the senior executive’s anxiety. Those senior executives will pay. My boss challenged Jack Welch in a double or nothing bet worth millions in consulting fees regarding a specific report. Mr. Welch loved the challenge from a mere consulting firm. The bet was to deliver specific high value information. We did. Mr. Welch paid the bill for the report he didn’t like and the one that doubled the original fee. He said, “We will hire you guys again. You think the way I do.”
Net net: Bring on the LLMs, the AI, the smart back office workflows. The blue chip consulting firms may downsize; they may recalibrate; they will not go away. Like Draculas, they keep getting invited back, to suck fees, and probably live forever.
Stephen E Arnold, July 14, 2025
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