Big Four setbacks fuel growth for smaller consultancies

By Grace Kim

FTI Consulting expanded its Australian workforce from about 380 to 550 employees in 18 months, a nearly 45% increase that Australian practice leader Mark Dewar links to Big Four controversies.

SmartCompany reported that a series of scandals and controversies has shaken confidence in Australia’s major accounting and consulting firms. Smaller consultancies are using the opening to poach experienced partners, pursue government work and expand into markets long dominated by the four largest firms. The push has reached both public- and private-sector clients, according to SmartCompany.

What is driving demand for smaller consultancies?

KPMG is reportedly set to axe another 400 jobs in Australia, according to SmartCompany. The firm has agreed to stop taking on new Commonwealth contracts until February 2027 after allegations involving misuse of confidential client information. Several state governments also imposed restrictions. PwC faced comparable treatment after its 2023 tax confidentiality scandal.

SmartCompany reported that Foresight, a boutique consultancy with around 25 employees, already sits on a government procurement panel. It is seeking places on other panels to compete for larger tenders. The firm recently appointed former Deloitte executive Jordan Petrie to lead its government consulting arm and former KPMG partner Meg Brodie as a director.

Jeyaretnam, a former EY partner and Foresight executive director, said government contracts account for about 10% of revenue. He expects that figure to reach 35% within a few years as clients reconsider their relationships with the Big Four. The issues at PwC and KPMG have created “quite a significant opportunity” for smaller consultancies, he said.

“There’s a role for SMEs in this space, and I think that there is currently good opportunity to go into some of the areas that the big firms have dominated,” Jeyaretnam said.

For Foresight, the immediate gain is government work: 10% of revenue now, with Jeyaretnam expecting 35% within a few years.

How are Big Four defections reshaping teams?

Jeyaretnam said boutique firms can offer experienced Big Four professionals at lower cost and without Big Four bureaucracy. “If you’ve worked with these people in the Big Four and now they’re offering the same services in a boutique environment, where you’re getting more of their time, why wouldn’t you jump to that?” he said.

He described the shift away from the Big Four as probably the largest opportunity for smaller consultancies since the global financial crisis more than 15 years ago.

FTI has moved into the gap left by the Big Four, expanded into new sectors and recruited heavily from the major accounting firms, Dewar said. Around 75% of its Australian workforce comes from Big Four backgrounds.

“We’ve been a massive beneficiary of that over the last five years,” Dewar said. He also said the reputational fallout affected Big Four professionals who played no part in the controversies.

Partners often arrive with their teams and clients already attached, Dewar said. “If you get the right talent in the door, not only do they bring the right staff with them, but they bring the right clients along.”

According to Dewar, FTI’s healthcare consulting practice grew to 75 employees over the past 18 months. Its new mining advisory division hired six former Big Four partners, including former global mining leaders from Deloitte, PwC and EY. The mining practice is targeting BHP, Rio Tinto and South32.

FTI also established a 25-strong financial crime, anti-money laundering and risk advisory practice staffed primarily by former KPMG professionals, Dewar said.

The talent shift now moves whole teams and clients, not just experienced partners.

Can independents take more market share?

Dewar expects other independent consultancies to capitalize as large corporations question whether to keep working with the Big Four. “There’s not the big monopolies that the Big Four previously enjoyed,” he said, adding that independents now command a larger share of the market.

Despite its 18-month expansion, FTI plans to remain relatively small and agile. Dewar said that scale helps the firm avoid the bureaucracy and conflicts of interest attached to Big Four operations while preserving close staff and client relationships. “We are never going to be a Big Four,” he said.

Together, the scandals and contract restrictions have put experienced people, public tenders and corporate clients within reach of smaller firms. “It’s exciting, and it’s there for the taking,” Dewar said.

The next test comes as KPMG’s Commonwealth contract freeze lasts through February 2027: independent firms must turn panel access and recruited teams into larger contracts to sustain the shift.