Paul covers the acquisition of Financial Dynamics by management consulting firm FTI last week. He's beaten me to the punch on several thoughts I had on reading this in the FT:
- 'Technical communications' boutiques and agencies (IR, crisis comms, change management, positioning, etc.) have a natural synergy with large consulting firms.
- The synergy isn't just in practice area, it is also in working model.
- As the larger (McKinsey) and more niche consulting firms look for growth outside traditional services there will be more M&A in this area.
- There are a large group of agencies of all shapes and sizes that would die a certain death inside a management consulting firm. Culturally they are not a fit and the client has an expectation of them that would not be fulfilled by the working practices of say, a McKinsey.
Here is what Paul had to say in The Holmes Report:
Nevertheless, the possibility that other management consulting or professional service firms might take an interest in public relations consultancies—particularly those at the high value-added end of the business—is intriguing, and many PR agency principals believe their firms have more in common with the consulting business than they do with the advertising business, which traditionally has been the biggest buyer of public relations agencies. Charles Watson, chief executive of FD, says financial PR has more in common with consulting than with the advertising agency businesses and predicted that there could be “other similar transactions to come. There is a growing recognition on the part of the consulting business that reputation and risk management and communications are becoming more important issues for their clients at the CEO level.”