A major transformation appears to be underway in the consulting sector as Artificial Intelligence (AI) is altering how consultancies deliver services and who is delivering them. According to Steve Varley, former UK chair of Ernst & Young (EY), the smaller firms have rapidly gained momentum using AI to penetrate the strong grip of the Big Four. Their nimbleness, innovation, and tech-focusedness are pushing them to appear closer to their larger counterparts, when it felt uncloseable.
Traditionally, the likes of EY, Deloitte, PwC, and KPMG have held a stronghold on the global consulting market for many years, mainly in audit, tax, and advisory. Yet, Varley thinks that the Big Four will face real heat in competing with smaller firms. Faster, agile players equipped with leading-edge AI solutions are solving client challenges faster and cheaper than ever before. The power balance is evidently changing and large players in consulting will need to adapt quickly, or risk that the world will catch up, in the near future!
Smaller Firms Are Using AI to Win Big Clients
Steve Varley, speaking in an interview, pointed out that smaller companies have started making strategic use of AI to disrupt consulting norms. These new AI consulting firms are not weighed down by legacy processes or bureaucratic hurdles. They build lean teams, deploy generative AI, and automate tasks that once took hours, even days.
This allows them to provide insights, audits, and strategic insight at scale, at speed and efficiency, that the larger competitors, fail to achieve all the time. While competition from the Big Four might seem fiercer, clients are increasingly caring about the outcome more than brand loyalty and speed of delivery. The new entrants tend to be agile, hyper-narrowly focused on specific domains, and are providing tailored AI-powered solutions to solve niche problems.
Big Four Struggle with Legacy Systems and Scale
Even with their worldwide network and deep talent pools, Big Four firms face challenges adapting to rapid change. The layers of complexity and old relationships are something that the progressive firms need to untangle. Integrating AI into those ecosystems is slow and met with resistance from senior leadership and compliance divisions.
In addition to complex environments, larger firms have to consider legal regimes, client contract frameworks, and audit framework factors which slow down the ability to leverage AI. Even though they have the capacity to invest in sophisticated tools, they are challenged by the speed in which they can implement and scale tools in their global structure. In contrast – smaller firms can test, fail, iterate, and deploy AI very quickly.
Generative AI Is Reshaping the Consulting Landscape
One of the biggest disruptors is generative AI. Smaller consulting firms use tools like ChatGPT, Copilot, and proprietary models to draft client reports, create financial models, or automate risk assessments. This doesn’t just save time — it significantly reduces project costs, often passing the benefits to clients.
Big Four competition intensifies as mid-tier players gain reputation for delivering quick, accurate results using these new technologies. Steve Varley emphasized that while Big Four firms are investing in AI, the question is whether they can transform fast enough to stay ahead of the curve.
Clients Are More Open to Change Than Ever Before
Another reason smaller firms are gaining traction is because clients themselves are now more open to experimenting. Post-COVID, the appetite for digital-first, AI-enabled services has increased across industries. Companies want vendors who can respond quickly and innovate constantly.
This shift in client expectations gives smaller players a significant opportunity. Many now win contracts previously reserved for global giants. Their value lies not only in AI tools but also in how well they understand specific industry problems. In this new race, size matters less than speed, clarity, and innovation.
Big Four Must Evolve or Face Irrelevance
The message is clear: evolve or fade. Big Four firms are now investing billions into AI training, partnerships with tech companies, and developing their own AI frameworks. But they also have to change their culture, empowering junior teams, simplifying decision-making, and reducing internal red tape.
According to Varley, being big no longer guarantees client trust or efficiency. Instead, the ability to stay agile and deliver quick results will define the future. Big Four competition from smaller firms will only grow unless they reshape their strategy from the ground up.
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