COVID-19 | Update for 5th June 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: 5th June

Although our headline figure remains unchanged this week, the underlying detail continues to show marginal gains on many fronts. Based on the information we have to hand this week, the COVID crisis will cause the global consulting industry to contract by 17% during the course of 2020. However, longer-term trends also show how vulnerable the industry is to sudden drops in confidence, especially on a regional basis. Consulting firms will need to find strategies to adapt to this.

A more local consulting industry?

The most important gains this week, from a sector perspective, were in the public sector and healthcare. We’re now predicting that public sector consulting will contract by 12% this year, compared to 13% last week. That represents a substantial improvement on its mid-March starting point. However, while previous improvements have largely been the result of national governments seeking help from consulting firms to implement their various economic stimulus packages, it’s now starting to feel as though government spending on consultants is rising more generally. This isn’t unexpected: Public sector consulting was often countercyclical in the 1990s and 2000s, as governments intervened more in the economy during recessions. Indeed, following patterns that have been observed in the past, we’re starting to see early signs of increasing public sector expenditure at a more local level, which in the case of this crisis is probably linked to the devolution of infection control, with state or local authorities taking more decisions about how to respond to specific virus hotspots. However, the extent to which this plays out will vary country by country, as politicians and public servants at all levels will want to avoid accusations of profligacy.

From a service line perspective, we’ve seen improvements around risk & regulatory, which is now expected to contract by 15% this year, as clients fight a battle on two fronts: keeping up with existing and new regulation at a time when they’re preoccupied by other issues and short-staffed; and beginning the process of understanding how their businesses will need to change to be more resilient in the medium term—while the crisis persists—and in the long term, once it’s become clearer what they’ll need to change permanently. Meanwhile, strategy consulting has improved marginally, though not by enough to make a material difference to our numbers this week. The main talking point here is around M&A: We’re hearing of more private equity related activity, predictably focused around distressed companies looking for funding, but some of the larger PE firms have been exploring the potential opportunities from a more strategic vantage point. But, with corporates still cautious and keen to preserve cash, this still feels very early-stage from the point of view of consulting firms.

Still, with 12 weeks’ worth of updates under our belt, important patterns are starting to emerge in terms of the impact of the crisis on a regional basis. This week saw an improvement in the prospects for European consulting firms, up from -20% last week to -19% today. This reflects cautiously increasing activity and confidence among consulting firms in Germany, the Nordics, and even some of the hardest-hit countries, Italy and Spain, but is a substantial improvement from the point at which we started forecasting, when consulting firms were telling us that, based on projects paused and future opportunities put on hold, their businesses were likely to contract somewhere between 20% and 50%.

By contrast, the situation in Central & South America and Africa has been deteriorating. Our predictions for Central & South America started at -19% in mid-March and initially seemed relatively positive. But, as the virus took hold, restrictions were introduced, and economic activity slowed, business confidence and consulting work—and the two are inextricably linked—dropped significantly. Since then, the region has been hovering in the low minus 20s and stands at -23% this week. Venezuela, weakened by social and political upheaval before this crisis struck, is expected to contract by 26% this year. More worrying is Brazil, which is the largest single market in the region (worth US$1.3bn in 2019), and which we expect to contract by 25%, two points worse than last week, reflecting the havoc being wreaked at the political level. Africa has followed a similar pattern: At the point we started forecasting, the level of disruption to consulting was relatively low, but rapid growth in infection rates resulted in a tipping point at which the confidence levels of consulting firms dropped suddenly. Although we don’t have data prior to the middle of March, we suspect the same pattern appeared in continental Europe at the start of that month. This suggests that, despite the week-on-week improvements we’re seeing, the market over the next few months won’t be immune to sudden, geographically specific shocks that relate to business confidence as much as macroeconomic factors.

That begs the question of how consulting firms can best respond. The global financial crisis saw firms in Spain—an especially badly hit market—turn their attention to the South America consulting market. In previous, less severe downturns, most of which, so far as the consulting industry has been concerned, began in the US, American-based consulting firms turned their attention to comparatively buoyant European markets. But as demand in the US recovered and demand in Europe slumped, the process was reversed, with European consulting focusing on US opportunities. As a smaller, less mature consulting market, Asia was less a part of the mix. The COVID crisis is clearly different. The downturn has travelled the other way, from East to West, meaning that Asia will now be central to consulting firms’ recovery plans. At the same time, it’s going to be hard to move resources around the world, either to exploit emerging opportunities or (like Spain 12 years ago) to reduce excess supply. As many firms have already realised, local strategies, whereby they find ways to invest in local firms’ resources rather than flying people in and out, will be crucial. But this will exacerbate the already-desperate shortage of deep expertise in some parts of the world, so it will need to be accompanied by a more thoughtful approach to inter-firm collaboration. Recruitment will be difficult, costly, and will leave firms exposed to sudden changes in demand, so it will make sense to specialise more. It will also involve firms being clearer about the types of capabilities required close to home, and those that can be dialled in from other parts of the world on a short-term basis. Previous crises made the consulting industry more global: This one will make it both more virtual and more local.

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 16 3rd July, 2020
Update 15 26th June, 2020
Update 14 19th June, 2020
Update 13 11th 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 16th 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