In a headline that has been echoing throughout the consulting world, Deloitte is now facing important contract reductions from the U.S. government. The Department of Government Efficiency (DOGE), run by Elon Musk, terminated or reduced more than 129 Deloitte contracts worth $372 million, across agencies like Education and Health. This was in an effort to support the Trump administration’s goal to reduce federal consultancy spending.
This sounds like a Big Four problem. However, for smaller and mid-sized consulting firms, it’s both a warning sign and a clear opportunity.
(We saw similar patterns with KPMG recently. If you missed that breakdown, you can catch up here.)
Federal agencies are rethinking how they engage with external partners, and they’re doing it very quickly. The focus is shifting toward transparency, measurable outcomes, along with a clear return on investment for taxpayers. Wide-ranging large-scale contracts, open-ended in nature, that once greatly favored the biggest firms are quickly falling out of favor. In their place: smaller, increasingly tightly scoped engagements, often with performance-based incentives and through stricter oversight.
This creates a challenging environment for firms built upon volume and scale. While giants such as Deloitte have large resources for weathering the storm, they additionally have slower decision-making processes along with more rigid delivery models. Midsize and boutique firms, on the other hand, have an edge. They can pivot quickly, tailor their services, and build more personal, responsive relationships with clients, which is exactly the kind of value government buyers are looking for right now.
The days of sprawling consulting engagements with vague deliverables are numbered. What’s replacing them?
Clients are increasingly moving away from massive consulting contracts and toward smaller, more specialized scopes. Targeted projects with clear boundaries allow them to address specific problems more efficiently and with less overhead.
At the same time, expectations around value delivery are rising. With tighter budgets and increased scrutiny, firms are being asked to clearly demonstrate how their work ties to tangible outcomes, like cost savings, improved performance, or measurable impact.
There’s also a growing preference for firms that act more like partners than vendors. Today’s clients want consultants who understand their mission, collaborate closely, and feel genuinely invested in their success. This shift favors firms that are agile, transparent, and deeply client-focused. Those that can deliver quickly, communicate clearly, and stay aligned with their clients’ evolving needs are the ones that will stand out.
1. Focus on Value, Not Volume
Don’t try to out-scale the big players. Instead, out-focus them. Build offerings around clear outcomes. Package services with well-defined deliverables and pricing. Be the firm that makes the client’s job easier, not more complicated.
2. Become Incredibly Transparent
Clients, government or otherwise, are under pressure to show ROI. Help them do that. Share timelines, benchmarks, and ways they can measure success. Make it easy for them to justify keeping you around.
3. Build Trust Through Specialization
If you work in regulated industries like education, healthcare, or energy, this is your moment. Agencies are looking for partners who deeply understand their space, not generalists. Niche knowledge can go a long way in winning work that bigger firms may lose due to their broader, less tailored approach.
4. Prepare for Performance-Based Work
More and more contracts are being tied to outcomes. That means your firm needs systems in place to track results, deliver against KPIs, and stay accountable. If you’re not already reporting on impact, now’s the time to start.
Deloitte losing government work is a signal that the market is changing. That puts pressure on everyone, but it also levels the playing field.
Smaller firms that can prove their worth, move fast, and specialize deeply will be in a strong position. The question isn’t whether consulting is changing, it’s how quickly your firm can change with it.
Pike helps smaller consulting teams stay ahead by making project delivery clearer, faster, and more client-focused.
Book a call today or request access if you want to learn more about how we might be able to help your team.
The first consultation is absolutely FREE of charge, and is only meant to help you shed light on where your firm could improve.
