COVID-19 | Update for 20 March 2020

We're all facing unprecedented challenges in the next few weeks and months, in our daily lives, in our communities, and in our businesses. But we're already seeing evidence of how, if we work together, we can make a difference.

It's in that spirit of collaboration that Source has put together an estimate of the impact we think COVID-19 will have on the global consulting industry during the course of 2020. We're very grateful for the input of a wide range of firms from around the world who've helped us do this, providing up-to-the minute information on how we should adjust our existing model of the industry.

While based on the best information we have at the time of writing, our forecast and commentary are intended to be directional, providing guidance for future planning. In an environment where everything is changing very quickly, our predictions will inevitably change. Over the coming months, we will be updating the forecast on a weekly basis. For more information on our data and methodology, please see the end of this bulletin.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.

Summary: 20th March

We estimate that COVID-19 virus could reduce the size of the consulting industry by 19%, from $160bn in 2019 to $130bn in 2020. However, the exposure of individual firms will vary based on the services they provide and industries they serve, so the ability to adapt will be critical. Large firms, with more varied portfolios, are better positioned to do this, but for firms of all sizes the key challenge will be how effectively they'll be able to rebuild their pipelines and convert sales during what are likely to be at least two very challenging quarters.

COVID-19 has divided the global consulting industry into three distinct regions.

While clients in some parts of Asia Pacific are starting, very cautiously, to look beyond the crisis, most of those in the majority of Europe appear to have the capacity only to make the most urgent decisions: How to protect their staff and how to reconfigure their business in the short-term, while also trying to ensure they don't compromise survival in the long-term. While only a minority of projects in the region have been cancelled, many have been de-scoped to some degree, or paused. By contrast, the US, which accounts for around half of global consulting demand, has so far seen only limited change. Modelling the likely impact over the year as a whole, we estimate that the global consulting market could shrink by 19%. Europe will suffer disproportionately because its recovery will be relatively slow, as it was after the 2008 Global Financial Crisis, as it lacks US clients' greater willingness (both generally and after specific crises) to use consulting services and to adopt new technology in business.

Based on feedback from firms in Europe, we estimate that demand there could be 28% lower. The German consulting market, where the large manufacturing base will be impacted by disrupted failing supply chains, could shrink by more than this, as could the UK, where our forecasts were already downgraded because of Brexit. Demand in Italy, the current epicentre of the outbreak in the region, could fall even more sharply. We think the US market will shrink—and almost certainly by more than most US firms currently anticipate—perhaps by around 15%.

  Region 2019 (US$bn) 2020 forecast (US$bn) % change
North America 78.7 66.6 (15%)
Europe & Russia 45.0 32.2 (28%)
Asia Pacific 24.8 21.9 (12%)
Central & South America 5.1 4.1 (19%)
Middle East 3.6 3.0 (18%)
Africa 2.9 2.5 (14%)
  Total 160.2 130.4 (19%)

Any headline number should be treated with caution as it inevitably masks a far more nuanced picture.

It's already clear that the impact of COVID-19 depends on the type of work a consulting firm does. The hardest hit services will be those where the work involved involves time on clients' site and travel, so change-related work and many aspects of operational improvement are already suffering in Europe. While consulting firms are already looking at ways to mitigate this, some aspects of projects will be de-scoped as a result. At the other end of the scale, strategy projects, because the work is often done in the consulting firm's office, will be less badly affected. Long-term technology projects will also fare comparatively well, partly because so much of the work can be delivered remotely, partly because clients are reluctant to lose the investment they've already made.

The impact will also inevitably vary by sector. Our modelling suggests that the demand in the services sector, which includes leisure and airline companies, will shrink 29%. Here, collapsing demand for mainstream consulting will be partially offset by a growth in restructuring work. Lower oil prices will be a key factor in bringing down demand by a quarter in the energy and resources sector. Healthcare consulting demand is also likely to drop precipitously, as resources are re-allocated to far more urgent areas in the short-term, but lack of capacity may mean that healthcare companies may turn to consulting firms for help at a slightly later stage. The prospects for public sector consulting are likely to vary by country: Some firms are already reporting projects being put on hold as time and money is focused elsewhere, but others are continuing, especially where long-term technology projects are concerned. The financial services sector is likely to fare better but will still contract. Private equity firms, although they're likely to be very cautious in the short-term, may become more active in Q3, as valuations fall.

  Sector 2020 forecast
% change
Energy & resources (25%)
Financial services (12%)
Healthcare (28%)
Manufacturing (21%)
Pharma (7%)
Public sector (22%)
Retail (10%)
Services (29%)
Technology, media & telecoms (17%)
  Total (19%)

Our research suggests that large consulting firms will perform better than mid-sized and small ones. Large firms tend to have longer projects, which clients are more reluctant to cancel. They're able to take share from smaller firms by cutting their rates (smaller firms have nowhere else to go) and have more resources to invest in technology that will allow their staff to work remotely. Brand helps, too: As we saw during the Global Financial Crisis, clients will only invest in consulting during periods of economic upheaval if the work is delivered by a major firm. The disparity in performance between large and mid-sized/small firms is likely to trigger a wave of consolidation, as the former spot opportunities to acquire innovative, boutique firms at knock-down prices.

But the biggest threat to firms of all sizes will be how to sell in this new environment. With the average project size likely to fall as clients break larger pieces of work into smaller, more cautious projects, the amount of sales effort required will be higher—at a time when partners can't build relationships and walk clients' corridors in the ways they've been accustomed to do.

Broadly speaking, we expect the second and third quarter of 2020 to be equally seriously hit, but we also think that the recovery, which we currently assume will start after the summer, will be fast. Consulting firms are highly adaptive and have demonstrated their resilience and flexibility in previous crises. But the challenge of this crisis will not simply be how to stay close to clients when the latter have limited budgets, but how to sell in a totally new way.

Further questions

We've included details of our model and forecasting methodology below. If you'd like to know more about how we've created our forecasts or want to understand how the year is likely to play out at a more granular level for your firm, please contact


In order to calculate this forecast, we've taken the most recent forecast from our model of the consulting industry, which was prepared pre-crisis, in early January 2020. This unique model is built bottom-up, by estimating the number of people employed by several thousand major and mid-sized firms across 84 countries, 29 industries, and a range of services. We then apply a series of metrics and adjustments around the revenue per consultant. Where possible we validate this data against published sources and interviews with senior people in the firms concerned. Although some of our 10 million individual data points and assumptions may be wrong, when aggregated, they provide a robust view of consulting markets around the world. Moreover, because of the way this model has been built, we can adapt it to take account of new scenarios—as we have done here. In order to understand the likely impact of COVID-19 on the consulting industry, we've developed forecasts at the level of individual service lines, quarter by quarter, then modified these depending on industry and country. Please note that all the data in this bulletin is for the calendar year 2020 and is in US dollars. We've calibrated our assumptions with a number of major and mid-sized firms.


One of the greatest challenges with sizing any part of the consulting industry is that “consulting” means different things to different people. Over the last 12 years, Source has adopted a consistent definition, and this underpins all our published material about the consulting industry. It includes traditional management consulting services (strategy, HR & change, operational improvement, risk & regulatory work, and technology consulting), but does not include systems development and integration, and outsourcing services.


Our model also focuses on what we call "big consulting", work done by consulting firms with more than 50 consultants typically for clients with a turnover in excess of $500m.

About Source Global Research

Source Global Research is the leading provider of research about the professional services market. Founded in 2007, we serve the world's leading professional services firms and their clients with expert analysis, data, and insights. Firms come to us because they know we offer transparency in a notoriously opaque market. We provide direction and evidence about changes in the marketplace, helping firms cut through what can sometimes be intractable discussions around future direction by being objective and honest.

Data sits at the heart of what we do, and our model of the professional services market is the largest and most sophisticated in the world. Data in the model comes from extensive desk research, and interviews with over a thousand senior partners from around the world. It feeds into our customers' business strategies and helps them prepare for the future. We also place a strong emphasis on the views of clients of professional services firms (we conduct some of the largest interviews on this sector in the world) and listen to what clients need, and how their views are changing in the marketplace.

Please note that, because we work with such a wide range of firms, we take confidentiality very seriously. Our ongoing research programme, including interviews, and customised project work with individual firms, gives us an extensive foundation of knowledge and allows us to work on some of the most confidential issues these firms have.

Our independence and knowledge of the professional services industry means that we're trusted to set our work within the wider market context, helping firms make the most of the opportunities on offer. Our customers would tell you that we have a strong commitment to doing the very best for every firm we work with, and are thoughtful, friendly, and easy to work with.

Please help us to help you: We've only been able to pull this forecast together so quickly because of the input of the hundreds of firms from all over the world who responded to our initial survey. Please help us by sending us your updates week by week, by following this survey link. Every single one of these responses helps us improve our forecasting.

All updates

Update 20 31st July, 2020
Update 19 24th July, 2020
Update 18 17th July, 2020
Update 17 10th July, 2020
Update 16 3rd July, 2020
Update 15 26th June, 2020
Update 14 19th June, 2020
Update 13 12th June, 2020
Update 12 5th June, 2020
Update 11 29th May, 2020
Update 10 22nd May, 2020
Update 9 15th May, 2020
Update 8 7th May, 2020
Update 7 1st May, 2020
Update 6 24th April, 2020
Update 5 17th April, 2020
Update 4 9th April, 2020
Update 3 3rd April, 2020
Update 2 27th March, 2020
Update 1 20th March, 2020
Our approach 13th March, 2020