The exodus of Big Four partners — from Deloitte, EY, KPMG and PwC — leaving to launch boutique consultancies has accelerated in recent years, but many will struggle to build genuine challenger brands without an "all or nothing" approach, the co-founder of Q5 Partners has told City AM.

Five founders, including managing partner Olly Purnell, established Q5 at the height of the global financial crisis with the aim of building a "successful, effective organisation" without the traditional "armies" of junior staff deployed by larger rivals.

A decade on, the professional services landscape is undergoing a deep structural shift. Falling fees across advisory arms have prompted swarms of former partners from the consultancy giants to try their hand at challenging the market with boutique firms of their own — a sharp reversal from the pandemic-era boom, when the Big Four bulked up their consulting headcount only to trim thousands of roles as client demand cooled.

Purnell said some clever people are trying to build a brand, but they are highly affluent, raising the question of whether they have enough "fire in the belly" to create a new global brand capable of generating new revenue.

He explained that in 2009, the Q5 partners, all in their mid-30s at the time, "couldn't afford to fail" because they each had young families to support.

"You have to have that hunger and desire at a stage of life where it's all or nothing, and I knew, as did Sharon Rice-Oxley and Chris Parsons, who co-founded the business with me, we were at a stage where we couldn't afford to fail," he said.

"I don't want to be ageist about it, but when you're a multi-millionaire former Big Four partner with adult children, you've got to have some serious fixation on wanting to do something special and having a purpose and having that desire to go out and really make something happen," he added.

Generalist consultancies face 'turmoil'

Q5's first office was a basement in a building owned by Lord Stevenson, the former chair of HBOS, who let the five partners use it rent-free for a year. Fifteen years on, the self-funded firm has grown to around 400 staff across several global offices.

While the Big Four cut junior staff and fret about fees dropping in consultancy departments, Q5 said last year was its best and the latest quarter beat the previous one. Purnell said that since 2020 the firm has grown at just under 20 per cent a year, hitting record revenues last year and again in the latest quarter.

"If you are a generalist firm, that is where the issue is," Purnell said.

In his view, AI hasn't killed consulting; rather, it killed bloated enterprise resource planning (ERP) mega-projects. It is a sharper-edged contribution to a debate now running through professional services about how generative AI will change what clients are willing to pay consultants to do.

"Traditionally, a Big Four partner is looking for a multi-year, multi-geography ERP implementation, which would cost £50m-£60m for the client, and this has been going well for many years, with 100 consultants working on it for two to three years," he said.

Such programmes, typically built around enterprise software from vendors such as SAP and Oracle, have long been among the most lucrative engagements in the consulting industry.

That, he highlighted, is the type of work that will disappear in the post-AI world. "If you're a specialist advisory firm, and famous for that, then the market is enormous," he added.

"Q5 was always focused on what we call organisational performance, creating really successful, effective organisations that have clear strategies, clear workflows, and a clear structure… we work in threes and fours for very specialist 12-week assignments," he explained.

Over the next five years, Purnell said he wants Q5 to remain fast-growing and staff-owned, expanding quietly into new geographies and private-equity work while riding decades of AI-fuelled restructuring, but without cashing out to a Big Four or sacrificing the culture he sees as the firm's secret sauce.