Big 4 Consulting Firms - Deloitte, EY, PwC, KPMG | MConsultingPrep (2023)

1. Who are the Big 4 Firms?

From Big 4 accounting firms…

All of the Big 4 firms originate from the accounting industry – in fact, they are usually referred to as “Big 4 accounting firms”. They dominate the market – as of 2017, 497 of the S&P 500 firms are audited by one of these firms – an astounding collective market share of 99.4%.

However, the Big 4 wasn’t always the Big 4 – for most of the 20th century, the accounting industry was dominated by the “Big 8” firms – Deloitte Haskins & Sells, Touche Ross, Ernst & Whinney, Arthur Young, Peat Marwick Mitchell, Price Waterhouse, Coopers & Lybrand, and Arthur Andersen. As you may have guessed from the names, numerous mergers reduced the Big 8 to Big 5: Arthur Andersen, Deloitte & Touche, Ernst & Young, KPMG (the PM stands for Peat Marwick), and PricewaterhouseCoopers. And then in 2002, with the Enron scandal, Arthur Andersen met its demise and its practices were split between the remaining firms, now called “the Big 4”.

Nonetheless, today accounting/auditing services only contributed a minor part of the Big 4’s total revenue. The rest comes from assurance (audit), advisory, and consulting – the last of which is our main topic.

… to Big 4 consulting firms

Since the 1990s, the Big 4 (or more appropriately, the Big 5) have been deeply engaged in management consulting – in fact when Enron collapsed in 2002, Arthur Andersen was earning more from consulting services provided to that company than from auditing services. The same thing applies to the rest of the Big 5 – consulting, along with legal and tax advisory, was providing the majority of their revenue. The problem is when audit firms earn so much from non-auditing services provided to the same clients, there is an incentive to ignore the holes in the clients’ financial statements, to build long-term relationships and sell other services.

That led to increasing pressure from legislators, which coupled with the Enron scandal, forced some of the Big 4 firms to split their consulting arm in the early 2000s – EY sold off its consulting practices to the French IT firm Capgemini, while PwC’s consulting branch was acquired by IBM. Deloitte and KPMG retained a majority hold on their consulting arms (although part of KPMG’s consulting branch did split to become BearingPoint). Andersen also had its consulting practice split off as with the Big 4, but out of internal conflicts – and although the “mothership” has crashed, consulting practice remains strong, and I’ll discuss it near the end of this article.

20 years after these splits, however, the Big 4 firms have regained their positions within the consulting industry – as the four largest consulting firms globally. Among them, Deloitte, EY and PwC have already acquired boutique consulting firms with prestige in high-level problem-solving, to augment their traditional consulting arms which focus more on the implementation side.

2. Big 4 vs MBB – The Firms, the Projects, and the Career

Comparing the firms

The Big 4 firms are much larger than MBB, in terms of revenue and employee number.

As of 2019, the four largest consulting firms in terms of revenue are the consulting branches of the Big 4 firms. They surpass the more prestigious MBB firms (McKinsey, BCG. Bain, also called the “Big 3” of consulting) by a fair margin – the smallest of the Big 4 (KPMG) has 40% more revenue than the largest of MBB (McKinsey).

In terms of employee and office numbers, the Big 4 firms also outdo MBB firms by 5-10 times – each has somewhere around 600-800 offices and 200,000-300,000 employees. By comparison, the most far-reaching MBB firm – McKinsey – is the only one to possess over 100 offices (+130), and 27,000 employees.

Although the Big 4 firms do have non-consulting services to add into the numbers, these wildly different figures and the fact that MBB firms enjoy all the prestige and attention hints at another crucial difference between the two groups – the nature of their projects.

Comparing the projects

Overall, Big 4 projects aim at a more massed market, resulting in higher “unit sales” (number of projects), but lower prices. Project pricing is hard to compare and might be misleading, but if the scale and scope are comparable, MBB firms charge their clients 3-4 times more than Big 4 firms; on a related note: the “hourly rates” you see on the internet might be what offices charge the projects, not what the projects charge the clients (see the organization of consulting firms) which is usually much higher to account for the value of the time spent by partners in that project.

MBB projects normally entail high-level strategy consulting, while Big 4 consulting services lean towards implementation and highly-specific problems in areas such as accounting, tax, risk or legal advice. On the MBB side, the projects provide more tailored solutions, while Big 4 answers are generally more formulaic and methodical. MBB consultants work with their clients in shorter terms – usually 2-4 months, while Big 4 consultants can be engaged with one client company for 6-8 months or even year-long, providing oversight and helping the client put their solutions into practice.

These differences in projects lead to major implications for anyone who pursues a consulting career.

Comparing the careers

The greater number of Big 4 consulting projects, as well as higher level of involvement compared to their MBB counterparts demand more manpower. This lowers the barrier and allows each candidate a better chance at a consulting career.

In addition, the sheer geographical scale of Big 4 operations make their jobs more available. Each Big 4 firm operates in 150-ish countries – so unless you live in the poorest and least promising markets, you will find at least one Big 4 firm in your home country. MBB firms, on the other hand, are much more selective – McKinsey offices are only present in 65 countries, while BCG and Bain are in 50 and 37 countries respectively (nonetheless, you may still join an MBB office in neighboring countries – MBB partners can start projects in countries without an office – in fact, they only open offices in countries with a good track-record of successful projects).

Consultants from McKinsey, BCG and Bain are not paid much more than their Big 4 fellows – as far as base salaries are concerned. In the United States, junior consultants in both groups are paid $70,000-$90,000 per year as base, while that of senior consultants fluctuate around the $140,000 mark. However, with bonuses and profit sharing, the gap between MBB and Big 4 firms widens (see the charts below).

In terms of perks, MBB consultants have it much better. The sky-high fees of their projects allow MBB firms to give their consultants much more lavish dinners and hotel rooms. MBB firms also have more extensive support departments where you can outsource everything outside problem-solving – from making fancy PowerPoint slides to extracting data on any given topic.

On the other hand, Big 4 consultants do have somewhat better work-life balance, with the weekly hours ranging from 50 to 70. MBB consultants, on the other hand, can expect 60-80 hours per week. In reality, however, there is more variance between the projects than between two groups of firms.

Due to the high-level nature of their projects, MBB consultants frequently come into contact with high-level executives on the client side, while Big 4 consultants – especially the junior ones – mostly work with the middle managers. MBB projects also demand their consultants to be more creative and flexible in problem-solving than Big 4 projects; in addition, MBB consultants also tend to work in more industries and functions than their Big 4 fellows who specialize early. The level of learning from exposure is understandably much better on the MBB side; McKinsey, BCG and Bain can also afford to spend more on each consultant, leading to better training and development, including the world’s top MBA programs.

Prestige-wise, MBB firms have been standing head-and-shoulders above the rest of the consulting industry, including the Big 4. In the true consulting spirit, I present to you Vault’s rankings of the most prestigious consulting firms in the US in 2020 – even though the Big 4 and their strategy consulting arms take up 6 slots in the top 15, they are considerably behind the “Big 3” – the only gap wider than 1 point (1.48) is between Bain and Deloitte – the least prestigious of MBB and the most prestigious of Big 4.

15 Most Prestigious Consulting Firms in the US – Vault 2020

Blue: MBB firm / Gold: Big 4 firm

Note: This list is compiled by Vault using surveys of working consultants, who rank the prestige of consulting firms they know on a scale of 1 to 10. They are not allowed to rank their own firm.

All this learning and prestige, along with the extensive and influential alumni network of MBB firms (especially McKinsey – the “CEO Factory”) gives their consultant incredible exit opportunities offering salaries at least 30-40% higher than their income from consulting. This creates what I call an “exit culture”, where a majority of consultants view the firms as launching pads for their careers. Nonetheless, Big 4 firms are also respectable career launching pads – offering the same kind of exit opportunities as MBB, although the quantity and quality (pay) are usually lower.

Bottomline: Big 4 offer attractive careers, but go for MBB if you can

They say “there’s no such thing as a free lunch” – MBB candidates have to fight harder to get more out of their job. A consulting post at McKinsey, BCG or Bain is a better career choice overall, but every year thousands of applications are sent to each firm – so many, that the acceptance rate is below 1%.

To help increase your chance, I offer you comprehensive consulting prep materials covering every step of the consulting recruitment process – from resume-writing, to test prep (McKinsey PST and BCG Potential Test), and finally the case interview. Click on the links to find out about each product, or subscribe to our Youtube Channel and newsletter to receive more consulting news and free materials.

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Kick start your consulting prep with our Prospective Candidate Starter Pack
Over 50 tips and tricks, 12 sample tests, a framework dictionary
and an example from our premium Case Interview End-to-End Secrets Program

I’ve also written extensive articles on these consulting recruitment steps:

• Consulting Resume: how resumes are screened and how to impress your screener
• McKinsey PST, BCG Potential Test and Bain Online Test: question types and how to nail them all
• Case Interview 101: all-in-one guide for beginners and the experienced
• Consulting Math: why math is important in consulting, and how to master it

With all that said, Deloitte, KPMG, PwC and EY are all respectable names – as their consultant, you will still have the bragging rights, the high income, and the learning exposure better than most jobs out there. And because all consulting firms look for the same qualities in their candidates, you can do consulting prep for both groups at the same time. And while we’re at it, let’s find out some more about the career and salary offered at Big 4 consulting practices.

3. Big 4 Consulting – Deloitte vs PwC vs EY vs KPMG

Read more: Comprehensive consulting salary report for 2020

Deloitte consulting salary and career offers

Deloitte offers consulting positions in three main focus areas: strategy & operations (S&O), human capital, and technology. It also possesses a strategy branch called Monitor Deloitte (created from the 2013 acquisition of the consulting firm Monitor Group).

Deloitte Consulting Salary (2020)

Deloitte has published materials on their own case interviews – I’ve condensed them into one Deloitte case interview guide here, or you can see Deloitte’s example cases from this list

PwC consulting salary and career offers

PwC offers consulting positions in five main areas: strategy, technology, growth, human capital, risks-and-regulations. Like Deloitte, PwC also owns a separate strategy division, called Strategy&, which was formed by PwC’s acquisition of Booz & Company (not to be confused with its former-parent Booz Allen Hamilton, which remains independent as another top-tier consulting group).

PwC Consulting Salary (2020)

EY consulting salary and career offers

EY offers consulting positions in six main areas: strategy, technology, service, risks, finance and analytics. EY also has a dedicated strategy division called EY-Parthenon, created from its acquisition of the consultancy The Parthenon Group.

EY Consulting Salary (2020)

KPMG consulting salary and career offers

KPMG offers consulting positions in four main areas: management (which in the firm’s term, include operations, technology, human capital, data and service), deal, risks and strategy. Unlike the other Big 4 firms, KPMG is the only one to have not acquired a boutique, dedicated strategy arm.

KPMG Consulting Salary (2020)

4. Accenture Consulting and the Tier-2 Firms (Bonus Content)

What is Accenture?

Accenture is a multinational professional services network / consulting firm which focuses on strategy and technology. Together with the Big 4 and MBB firms, it is one of the most prestigious and largest firms in the consulting industry.

So large, in fact, that it is the largest consulting firm by employee number – at a staggering 500,000 in 2020, the firm is even larger than the Big 4. But where did this giant come from?

The last time we left off with Arthur Andersen, it was facing demise following the Enron scandal. Before that, however, the firm had a consulting division, called “Andersen Consulting” – internal conflicts, however, led the division to spin off in 2000. As part of the settlement, Andersen Consulting was required to change name, and so the fancy-sounding “Accenture” (“accent on the future”) was born.

On a side note: among the top 8 consulting firms discussed here (MBB, Big 4 and Accenture), Accenture is the only public company – all others are privately-owned.

Accenture consulting salary and career offers

For applicants who wish to specialize in IT consulting, Accenture also offers attractive careers, with salary on the same level as the Big 4. The firm also operates in strategy consulting, as with virtually all top consulting firms.

Like all top consulting firms, Accenture also use case interviews in their recruitment process – I’ve written a guide on their case interviews, which you should also check out by clicking on the link.

Tier-2 (or more) consulting firms

“Tier-2” is a common term denoting top consulting firms outside MBB and the Big 4. These firms are global or regional, and often specialized to a degree. The word “tier 2” implies a level of prestige and/or problem-solving expertise below MBB (the typical “Tier-1” firms). Notable firms in the “Tier-2” include Accenture, LEK, AT Kearney, Roland Berger, Booz Allen Hamilton, Oliver Wyman to name a few.

This “tier system” is not an universally-agreed grouping (like MBB or Big 4) – depending on the situation and the person, you may even hear about “Tier 3” or “Tier 4”, while some boutique consulting firms might be grouped into “Tier 1” with MBB due to their prestige in a specific industry/function/location.

I would also advise you to not depend on this tier system due to its vague and generic nature, and its tendency to bury the attractiveness of the so-called Tier-2/3/4 firms. These firms also offer salaries comparable to McKinsey or Deloitte, excellent learning opportunities and exit options (compared to most jobs on the general market – or even within the field of consulting), and probably a more suitable workplace culture for you in the long run.

Get Your Free Materials Now!

Kick start your consulting prep with our Prospective Candidate Starter Pack
Over 50 tips and tricks, 12 sample tests, a framework dictionary
and an example from our premium Case Interview End-to-End Secrets Program