1997 v 2025
The consulting industry has always lived in cycles. In 1997, ERP and MBAs fuelled growth. By 2025, it is AI, specialist talent, and outcomes. Many of the top firms from 1997 no longer exist in their old form.
The lesson is clear: consulting doesn’t vanish, but it reinvents — and we are once again nearing the end of one cycle.
The below table is from The Economist’s March 20th 1996 edition:
1997 snapshot
The Economist’s special report on consulting had themes that sound familiar in 2025:
→ Revenues growing 20–30% a year
→ Andersen Consulting and McKinsey racing into Asia
→ ERP systems from SAP and Oracle driving a wave of implementation work
→ One third of MBAs moving into consulting — even art schools and medical faculties were tapped
→ Consulting’s “mystique” selling as much as its logic
→ Early backlash: Andersen fined for UK IT project failures, BCG sued for overbilling
The consulting boom of the late 1990s looked unstoppable. Yet within five years, one of its giants — Arthur Andersen — was gone.
2025 reality
Today the market is again at an inflection point.
→ Growth slowing: McKinsey grew just 2% in 2024, while BCG hit 10%
→ AI is today’s SAP: Palantir, Databricks and OpenAI reshaping delivery models
→ Talent shifted: MBAs are no longer the default. Firms prize AI engineers, product leaders, and operators
→ Transparency demanded: outcome-based fees, adoption metrics, and week-one tests replacing slideware
→ Backlash systemic: regulatory probes, parliamentary inquiries, and criminal proceedings
The drivers are new, but the pattern is the same: technology disruption, talent wars, client scepticism.
The big differences
→ Implementation: in 1997 it meant ERP and IT. In 2025 it means AI adoption, digital build, and ESG delivery.
→ Talent: in 1997 the prize was MBAs. In 2025, it’s coders, data scientists, and ex-operators.
→ Client expectations: in 1997 mystique still sold. In 2025, clients benchmark outcomes, test quickly, and walk if delivery fails.
Then and now: what became of the 1997 leaders
The “Life at the Top” table from 1997 ranked the 25 biggest US-based consulting firms. Here’s where they are now
- Andersen Consulting ➝ rebranded Accenture in 2001. Today a $64bn+ global powerhouse across strategy, tech, and outsourcing.
- Arthur Andersen ➝ collapsed in 2002 after Enron. Some practices absorbed into Deloitte and others, but the brand died.
- McKinsey & Company ➝ still independent. 40k+ employees, 12,000 AI agents deployed internally, $16bn+ revenue. Facing regulatory scrutiny but remains the reference name in strategy.
- Bain & Company ➝ still independent, ~$7bn revenue, strongest footprint in private equity consulting.
- Boston Consulting Group (BCG) ➝ still BCG, ~$13.5bn revenue, 30k+ staff, expanded into tech with BCG X. Outpaced McKinsey in growth (10% vs 2% in 2024).
- Ernst & Young Consulting ➝ sold to Capgemini in 2000, later rebuilt advisory. EY acquired The Parthenon Group in 2014 to form EY-Parthenon, now 9,000+ people.
- PwC Consulting ➝ sold to IBM in 2002 (forming IBM GBS). PwC later rebuilt consulting and acquired Booz & Company in 2014 to form Strategy&, its global strategy brand.
- KPMG Consulting ➝ spun out as BearingPoint (IPO 2001), collapsed into bankruptcy in 2009. KPMG later rebuilt Advisory organically.
- Mercer, Towers Perrin, Watson Wyatt, Sedgwick ➝ consolidated under Marsh McLennan and Willis Towers Watson (WTW). Mercer remains a global HR and benefits consultancy; WTW rebranded in 2022.
- Gemini Consulting ➝ merged into Cap Gemini Ernst & Young (2000). Today forms part of Capgemini Invent.
- Arthur D. Little ➝ filed for Chapter 11 in 2002, restructured, and has re-emerged as a smaller but distinct strategy boutique.
- Hewitt Associates and Aon Consulting ➝ merged in 2010 into Aon Hewitt; outsourcing business spun off as Alight Solutions (2017).
- American Management Systems (AMS) ➝ acquired by CGI in 2004.
- Hay Group ➝ acquired by Korn Ferry in 2015 and integrated into its advisory business.
- Grant Thornton ➝ still independent, with advisory as a growing line.
- Milliman ➝ still independent, one of the largest actuarial consultancies worldwide.
Things to highlight
- Scale vs productivity: Andersen Consulting had over 43,000 consultants but the lowest revenue per head at $71k.
- McKinsey effect: Only 3,944 consultants yet the highest yield at $532k per consultant.
- Big Six dominance: Nearly 63,000 consultants employed across Ernst & Young, Coopers & Lybrand, KPMG, Arthur Andersen, Deloitte, and Price Waterhouse – with big gaps in productivity (Coopers & Lybrand at $213k vs Arthur Andersen at $92k).
- Boutiques (at the time) outperform: BCG ($387k), Bain ($333k), and Arthur D. Little ($296k) all delivered far above the large firms on a per-consultant basis.
- Surprise entry: Grant Thornton’s consulting wing hit $345k per consultant, outpacing many bigger names.
- BM Consulting Group: Modest presence – $730m revenue, $184k per consultant – showing consulting wasn’t yet core to IBM.
- Strategy vs operations: Strategy-focused firms (McKinsey, BCG, Bain, ADL) clearly earned more per head, while operations/HR-heavy firms scaled with lower yield. The split in consulting models was already visible in 1996.
- Andersen vs Andersen: Andersen Consulting ($71k per head) vs Arthur Andersen ($92k). Both massive, both relatively low-yield compared to strategy players – a hint of the later split.
- Regional skew: Strongly domestic vs global footprints – Towers Perrin ($659m of $903m in the US) vs BCG ($180m of $600m).
- Emerging brands: Names like Sedgwick Noble Lowndes or Watson Wyatt highlight how insurance/HR specialists once sat in the top 25 – now absent from today’s rankings
Overall contrast: Some firms built scale, others built intensity – very few managed both.
What this tells us:
Only a handful of firms from 1997 survive unchanged (McKinsey, Bain, BCG, Grant Thornton, Milliman).
Most were either absorbed (Booz, Gemini, Towers Perrin), collapsed (Arthur Andersen, BearingPoint), or reinvented (Accenture, EY, PwC).
By the mid-1990s, two models of consulting were already diverging. The scale players – Andersen Consulting, the Big Six audit-linked firms, and HR consultancies – built huge workforces but accepted lower yield per consultant.
The strategy boutiques took the opposite path: smaller headcount, higher productivity, and stronger economics per professional.
Why it matters
The 1997 list is a warning. Market leaders can disappear within a decade. Prestige is no shield if the model doesn’t evolve.
The tension between scale and yield is still alive in 2025.
Today it is not audit versus strategy, but AI-driven delivery versus traditional pyramids. The same question remains: do you grow headcount, or do you protect revenue per consultant by building leaner, higher-impact teams?
What history shows is that firms that get the balance wrong eventually fade.
The winners are those that adapt their model to where value is shifting – whether that was strategy boutiques in the 1990s, or firms investing in AI-native delivery today.
Consulting has reinvented itself before, and it will again.
The cycle is repeating – and we are nearing its turn.
Ben Appleton is the founder of Strat-Bridge, a specialist executive search partner to the strategy consulting industry. He works with global consulting firms and senior leaders across the UK, Germany, Switzerland, and beyond — helping them build capability at the Partner and Director level.
