Rethinking the Consulting Model: Big Four vs. Private Equity-Backed Firms

While ownership structures often receive the most attention, the core difference between traditional partnership-based firms like the “Big Four” and private equity-backed consulting and accounting firms lies in how each manages operational efficiency — particularly overhead.

Recent benchmarking data reveals a clear distinction: legacy firms often incur 24–28% of revenue in overhead costs before generating a single billable hour. In contrast, leaner PE-backed firms operate at significantly lower overhead levels — typically under 5%.

Understanding the Gap

This disparity is driven largely by structural differences. Established firms tend to carry significant fixed costs, including multi-layered leadership teams, decentralized administrative functions, high-end office footprints in major cities, and long-term financial commitments to retired partners. These costs can create drag on agility and limit the reinvestment of profits into innovation or performance improvement.

While these models have sustained success for decades, they also introduce complexity. For example, initiating project delivery may require navigating multiple layers of internal approval and compliance, which can delay responsiveness in fast-paced engagements.

A New Approach to Value Creation

Private equity-backed firms are approaching things differently. With fewer legacy constraints, these organizations can allocate resources directly to areas that drive client impact — such as recruiting top talent, investing in technology, and scaling global delivery models that are both integrated and agile.

By streamlining operations and focusing on outcomes, these firms are able to enhance execution quality while maintaining a competitive cost structure. The result is a model designed to meet evolving client expectations: faster response times, more flexibility, and a greater emphasis on measurable results.

The Way Forward

This isn’t a matter of one model being “better” than the other. Rather, it reflects an industry in transition. Legacy firms are likely to evolve — and many already are — but the landscape is changing quickly. Clients are increasingly prioritizing efficiency, innovation, and execution capability.

As the market continues to shift, firms that can adapt their structures to enable faster delivery and more focused reinvestment will be best positioned to create sustainable value.

KOZMAN & Co. Model - Built for Outcomes

With the support of private equity backing, our model is lean by design. We minimize overhead and maximize value creation — channeling resources into areas that matter most to our clients:

• Attracting and retaining top talent

• Investing in advanced technology and automation

• Building scalable delivery platforms that work seamlessly across borders

This structure enables us to be more responsive, more adaptive, and more focused on delivering measurable impact.

Adapting to Client Expectations

As businesses face greater complexity and higher expectations from their advisors, the consulting and assurance landscape must evolve. We believe firms that prioritize agility, efficiency, and reinvestment are better positioned to meet those demands — not just today, but in the long term.

The professional services industry is changing — and we've built a model that’s ready for what comes next.