THE emergence of consolidated super-firms in the commercial property sector was not unexpected, and is an obvious response to the contraction in the market.
Consolidation means there are fewer players in the market, and there have been fears of price increases and a lack of competition as a consequence.
However, a by-product of any merger is duplication of roles within a business, which often leads to job losses even in senior positions.
We may, therefore, see many talented individuals going it alone or moving to smaller specialists in their field, making senior-level expertise available at a more competitive rate, tempering any market increases.
These independents will represent good value for money as they will have big consultancy experience and expertise, without the associated commercial pressures and overheads.
There are obvious benefits to working with a super-firm, as they are more likely to have a wider range of services and could provide a one-stop-shop solution. Plus, the vast network of knowledge available within a consultancy with hundreds of employees can obviously play to a client’s advantage with cross-fertilisation of ideas and opportunities.
However, that same information- sharing exercise can present a risk as when firms that once represented rival interests merge, conflicts of interest can arise.
As an independent, mid-sized consultancy, we believe there are many benefits to working with a smaller firm, not least the access that clients have to the skills and expertise of those at the top. Some clients, however, may feel more confident working with a big-name brand with a reputable track record that speaks for itself.
So, as the rise of the super-firms will create giants in the industry, it may also herald the arrival of some smaller or independent players offering an entirely different style of service.
The result of mergers could see a new wave of companies enter into the industry. Whether the current economic climate will provide enough work to sustain them all, however, will remain to be seen.
