The Big Consulting Lie: Why Your $400K Project Should Cost $100K

What many execs would probably hate me for saying...

The consulting industry fascinates me.

In 2025, the big firms are projected to bill $280B globally. Their profits are at record highs. Yet something remarkable is happening beneath the surface - 68% of their digital transformation projects fail.

The economics tell the real story. Take a typical large consulting project - $400K . Only $100K goes to actual work.

The rest? Partner profits and overhead.

It's a model built for a different era, when knowledge was scarce and global reach required massive teams. Think of it as maintaining an expensive studio lot when Netflix is revolutionising the industry.

The A-Team Illusion

Every major consulting firm operates with what they call "talent tiers." The math isn't complicated - they have a small percentage of exceptional consultants, but every client expects them.

The solution?

The same one Hollywood perfected. Showcase the stars during the pitch, then bring in the supporting cast to do the actual work.

Unless you're spending north of $5M annually, you're not getting the team you met during the courtship.

The Economics

The traditional model made sense when you needed armies of MBAs to gather data, analyse markets, and build financial models. Partners were the gatekeepers of experience, and their networks justified their margins.

Then came the revolution.

AI, automations, big data and specialised tools have eliminated 40% of junior consulting work. Tasks that once took teams of analysts weeks now happen in hours. Research is 70% faster. Data analysis is way more efficient. Report writing is quicker.

I remember years ago being paid £400 for a 30-minute chat with a large research company to answer some very generic questions. It was such a waste. And trust me - the questions were dumb.

The "pyramid" of junior consultants doing grunt work to support senior insights has collapsed.

But that's just the technology story. The real disruption is happening in talent.

The partner track success rate has plummeted from 15% to 3%.

Average tenure dropped from 4.2 years to 1.8 years.

Top talent retention is down 43%.

The best consultants are leaving to start boutique firms or join small specialised teams.

Why? - Because they can deliver more value, faster, without the overhead.

The Time Trap

Here's the dirty secret of big consulting - they need to feed the machine.

Massive overheads force them to chase massive contracts. A 10-month project with 5 consultants suddenly "justifies" that $800K budget.

But look closer at the deliverables versus the time spent - it rarely adds up.

Their real agenda?

Keep people billable. Show "productivity." Run long projects.

In 2025, that's exactly what companies don't need.

You need speed. Results. Real expertise.

Not a team of consultants camping in your office for a year because their firm needs to hit utilisation targets.

The Boutique Revolution

This is where it gets interesting.

Small, specialised firms aren't just cheaper - they're often better. When you strip away the corporate machinery, you're left with something remarkable: experts doing actual work.

The economics are devastating to traditional players.

Boutique firms put 70-80% of their budget into direct work. Teams of 2-3 replace teams of 8-10. Senior involvement jumps massively. Projects finish 40% faster. The cost?

Usually 50-75% less.

But the real advantage isn't cost - it's quality. Without layers of hierarchy, knowledge flows directly. Feedback loops tighten. Experts have skin in the game.

Innovation happens naturally because there's no legacy revenue to protect.

The Market Has Noticed

The shift is already happening.

Boutique consulting is growing 3x faster than traditional firms.

Average project sizes are dropping 40% as companies break big commitments into smaller, smarter and less risky bets.

Client satisfaction increases. Return rates have doubled.

Smart companies have figured out the new playbook. They break $400K projects into $100K phases. They buy expertise instead of big brands.

They demand senior involvement and clear metrics.

They keep engagements short and flexible.

The Future

This isn't just market evolution - it's market correction.

Just as cloud computing democratised IT, specialised boutiques are democratising expertise. The winners will be companies who recognise this shift early.

The losers will keep paying for huge fancy office space they'll never visit and partners they'll never meet.

Think about your next big project.

Strip out the partner profits and corporate overhead ($300k). Focus on the actual work ($100K). That's your real price.

With better results.

The question isn't whether this shift happens. It's how long you'll wait to benefit from it.

See you soon! 👋

. . . . . . . . . . . . . . .

I’m a Founder & CD at Pony. We sit at the intersection of branding and interface design, blending them into experiences that stick.

150+ tech startups and enterprises trust us. Our clients include Founders Factory, Nissan, Capital on Tap, Sopra Banking, Penguin Books, UK National Cyber Security Centre, Capco, Dermatica, Dusk, and many more. Startups backed by YC, Techstars, Seedcamp, Coinbase Ventures, AngelList and other top accelerators and VCs.

. . . . . . . . . . . . . . .