Consulting Agency Roll-Up Strategy: How to Build a Mid-Market Consulting Platform Through Acquisition
Consulting is the most people-dependent business in professional services. The product is intellectual capital, and it walks out the door every night. This makes consulting firms both incredibly attractive and uniquely risky roll-up targets.
The opportunity is clear: the consulting market is bifurcated. Massive firms like McKinsey, Bain, and Deloitte dominate the top. Thousands of boutiques doing $500K-$5M compete at the bottom. The middle, firms doing $10M-$50M with specialised expertise and professional operations, is dramatically underserved. A roll-up fills that gap.
The risk is equally clear: when you acquire a consulting firm, you are buying relationships and expertise attached to specific people. If those people leave, you have bought an empty office.
Why Consulting Firms Are Compelling Roll-Up Targets
The market gap is real and persistent. Clients in the $10M-$50M consulting spend tier want broader expertise than a boutique can offer, more attention than a Big 4 firm will give a mid-market engagement, industry specialisation with enough bench depth to staff large projects, and competitive rates. No individual boutique can serve all of those needs simultaneously. A platform of combined boutiques can.
Private equity has a long track record of successful consulting roll-ups that validates the model. Huron Consulting Group was built through acquisition from nothing to over $1B in revenue. FTI Consulting made systematic acquisitions across multiple consulting disciplines. Alvarez and Marsal grew through acquisitions to become a global restructuring leader. West Monroe, PE-backed, scaled through acquisitions across technology and management consulting. The model is proven, and PE investors understand consulting economics well enough to back consolidation plays with significant capital.
The revenue model is also becoming more favourable for acquirers. Traditionally, consulting was pure project work, but the market is shifting toward advisory retainers, fractional C-suite arrangements, managed services, and subscription research. Firms with 30% or more in recurring revenue command significantly higher multiples than pure project-based consultancies.
The Roll-Up Thesis: Building a Mid-Market McKinsey
The multiple arbitrage math follows the same basic logic as other agency verticals, but the numbers are particularly attractive because boutique consulting firms are so consistently undervalued.
| Firm Revenue | Typical EBITDA Multiple | Why |
|---|---|---|
| $500K-$1M | 2-3x | Partner-dependent, small bench, limited brand |
| $1M-$3M | 3-4x | Still partner-led, some junior talent leverage |
| $3M-$5M | 4-5x | Growing team, some institutionalised client relationships |
| $5M-$10M | 5-7x | Professional management, diversified partnerships |
| $10M-$25M | 6-9x | Platform value, PE-attractive, significant bench |
| $25M+ | 8-12x | Strategic value, brand equity, institutional clients |
A worked example: acquire a management consulting boutique at $2M revenue and $500K EBITDA for 3.5x, paying $1.75M. Add an IT consulting firm at $1.5M revenue and $375K EBITDA for 3x, paying $1.125M. Add an HR and organisational consulting firm at $1M revenue and $280K EBITDA for 3x, paying $840K. Total acquisition cost is $3.72M. Combined EBITDA of $1.155M plus $200K in synergies gives you $1.355M. At a 6x platform multiple, the combined entity is worth $8.13M and you have created $4.41M in equity.
The expertise platform thesis is the strategic case that sits beneath the arithmetic. Each acquired boutique brings deep expertise in a specific domain. The combined platform offers clients a breadth of capabilities no individual boutique can match: strategy and management consulting from your existing firm, technology and digital transformation from the first acquisition, HR and organisational effectiveness from the second, finance and operations from the third. A mid-market CEO who previously needed four separate boutiques can now work with one platform. That creates larger engagements because multi-workstream projects need the bench depth to staff them, longer client relationships because one engagement leads naturally to referrals across practice areas, higher rates because platform credibility commands a premium, and better talent because top consultants want to work on diverse and interesting problems.
Utilisation as the key lever is where the operational upside lives. Consulting profitability is driven almost entirely by the percentage of consultant time billed to clients. A typical struggling boutique runs at 50-60% utilisation, roughly breakeven. A well-managed firm at 70-80% generates 20-30% EBITDA margins. A roll-up improves utilisation across the portfolio by sharing bench capacity between firms, enabling cross-staffing on multi-practice engagements, and smoothing the feast-or-famine revenue cycle through a larger and more diverse client base. Even a 5-10% improvement in average utilisation across the combined entity can add hundreds of thousands to EBITDA.
Finding and Evaluating Targets
The consulting industry runs on relationships, and the best deals come through people you know. Former colleagues who started their own firms, partners at firms you have collaborated with on joint engagements, and industry contacts who know boutique founders considering retirement or exit are all warmer starting points than any broker list. Professional associations like the Association of Management Consulting Firms and the Institute of Management Consultants surface founders who are actively thinking about the future of their businesses. M&A brokers who specialise in professional services, including SI Partners, Equiteq, and Barney, have deal flow from founders who want a confidential process.
LinkedIn signals are worth monitoring deliberately. Partners posting about next chapters, sabbaticals, or burnout are often closer to a conversation than they appear. Firms that have stopped publishing thought leadership are frequently disengaged. Senior consultants leaving a firm may indicate instability that creates an acquisition opportunity.
Evaluating targets in consulting requires reversing the usual order of priorities. In most agency acquisitions, you evaluate the business first and the people second. In consulting, the people are the business. Before running the financial analysis, map every major client relationship to the specific person who holds it. Ask what happens to revenue if that person leaves. Assess whether senior managers or directors exist who could step into partner roles. Understand what the team’s career aspirations are, because senior consultants who want to make partner are far more likely to stay if the platform offers a credible partnership path.
On the financial side, look for utilisation rates between 65-75%, revenue per consultant in the $200K-$400K range depending on the speciality, a realization rate of 85-95% of billed time actually collected, no single client above 15-20% of revenue, and a contract backlog of at least three to six months of signed work. Walk away from firms where all client relationships are held by one or two partners with no succession plan, where voluntary turnover among senior consultants is high, where the firm positions itself as doing everything, or where any single client accounts for 30% or more of revenue.
Deal Structuring for Consulting Roll-Ups
Consulting acquisitions require specific structures that directly address people risk. Every other deal structure consideration is secondary to this.
Non-compete and non-solicitation agreements are non-negotiable. Every partner and senior consultant must sign a non-compete covering the firm’s practice areas and geographic markets for two to three years, along with non-solicitation clauses that prevent them from taking clients or recruiting former colleagues. These are the single most important deal protections in a consulting acquisition and should be treated as table stakes, not negotiating points.
Earnouts tied to retention should represent 30-50% of the total purchase price. Structure them so that revenue retention and key person retention are equally weighted: the seller receives the full earnout if 85% or more of revenue is retained after 18 months and if named partners stay for 24 months, with the earnout reducing proportionally below those thresholds. This directly aligns the seller’s incentives with the outcomes you need.
Equity rolls are particularly effective in consulting because boutique partners are often entrepreneurial. They do not just want cash; they want upside. Converting 20-40% of their purchase price to platform equity makes them invested in the combined entity’s success and aligns their incentives for the three to five year vesting period. It is also a powerful signal: if you can articulate a credible path to a PE exit at higher multiples, partners who believe in that story will work to make it happen.
Partnership structures create additional complexity worth addressing early. Many consulting firms are organised as LLPs or PLLCs, where partnership agreements may require unanimous consent for a sale, partners may have different equity stakes and different payout expectations, and tax treatment differs from a standard acquisition. Engage an M&A attorney with professional services partnership experience before you get deep into diligence.
Integration Strategy: Decentralise First
Consulting firms require a fundamentally different integration philosophy to most agency roll-ups. The decentralised, federated model works better because the value sits in individual practices and their partner relationships, not in operational consolidation.
Each acquired practice should retain its market-facing brand initially, its client relationships and partner structure, its delivery methodology, and day-to-day operational autonomy. What the platform provides is the shared services infrastructure that frees up partner time: centralised finance and accounting, HR and recruiting, legal and compliance, marketing and business development, knowledge management, and technology infrastructure. The cost savings from consolidating these functions are meaningful, typically 25-40%, but more importantly they remove administrative burden from partners who should be spending their time with clients.
The first 100 days in a consulting acquisition are more delicate than in any other professional services roll-up, because trust is the foundation everything else is built on.
In the first month, do nothing operationally. The founding partners should personally introduce you to their top ten clients. You should meet every consultant one-on-one to understand their career goals, identify anyone who might leave, and address retention proactively with packages before they have time to start looking. The goal is trust, not efficiency.
In months two and three, host a combined team offsite because consulting firms genuinely value face time and relationships. Map expertise across the combined platform so consultants can find colleagues across practices. Identify two or three cross-staffing opportunities on current engagements and begin aligning time tracking, billing, and reporting systems.
From day 61, launch an internal expertise directory, introduce cross-selling incentives typically at 10-15% of first-year revenue for cross-practice referrals, standardise proposal templates that showcase the full platform, and prioritise winning the first multi-practice engagement. That first win matters disproportionately: it proves the thesis to partners, consultants, and clients simultaneously.
What not to do in the first year matters as much as the playbook. Do not rebrand acquired firms. Consultants sell their personal credibility and their firm’s brand simultaneously, and changing the brand damages both. Do not impose rigid utilisation targets on cultures accustomed to different norms. Do not eliminate partner autonomy, because partners who ran their own firms will not accept becoming middle managers overnight. Do not merge compensation structures immediately; harmonise over 18-24 months. And do not cut thought leadership investment. Publishing, speaking, and research are how consulting firms generate demand, and treating those budgets as overhead rather than marketing is a category error.
Building the Platform at Scale
Knowledge management is the most valuable synergy in a consulting roll-up, more so than any cost saving. Build searchable repositories of past engagements, methodologies, and deliverables. Create expert directories that map who on the platform has expertise in which industries, functions, and technologies. Develop methodology libraries that consultants across practices can draw on. Use senior consultants to train junior staff across practice areas, building the bench depth that boutique firms chronically lack.
The cross-selling engine needs to be built deliberately, not hoped for. Quarterly account planning reviews on the top 20 clients, asking what else they need, drive a 15-25% increase in revenue per client over two years. Joint proposals for complex client needs win engagements neither individual practice could have won alone. Combined thought leadership across practices positions the platform as a genuine thought leader and generates new inbound inquiries.
Talent development is a competitive advantage that boutique firms structurally cannot match. Small consultancies lack formal training programmes, clear career paths beyond partner-or-nothing, exposure to diverse problem types, and broad senior mentorship. The platform solves all of these simultaneously. Build structured career paths from analyst through to partner. Create rotation programmes that give junior consultants exposure across practices. Run quarterly training on consulting skills and industry knowledge. Better talent development leads directly to lower turnover, which leads to higher margins and higher valuations.
Revenue diversification beyond traditional project consulting is the final lever. Advisory retainers at $5K-$25K per month carry 70-80% margins and are recurring. Fractional executive placements carry 50-65% margins on six to twelve month commitments. Training and workshops generate 60-75% margins and are semi-recurring. Subscription research carries 80-90% margins. Shifting 20-30% of revenue toward these streams significantly improves the predictability of the combined entity and, more importantly, its valuation multiple.
Risks and Mitigation
| Risk | Impact | Mitigation |
|---|---|---|
| Partner departure | Client loss, revenue decline, team destabilisation | Non-competes, earnouts tied to retention, equity rolls, clear career paths |
| Clients follow the person not the firm | Revenue evaporates if key consultants leave | Gradually introduce clients to multiple team members, build institutional relationships |
| Utilisation decline post-acquisition | Margins compress, EBITDA targets missed | Shared bench, cross-staffing, active pipeline management |
| Culture clash | Talent turnover, productivity decline | Federated model preserves practice cultures, gradual harmonisation |
| Compensation mismatch | Partners from different firms with incompatible pay expectations | Transparent framework, 18-24 month transition, tie increases to platform performance |
| Market cyclicality | Consulting is discretionary and cut in downturns | Diversify across industries, build recurring advisory revenue, maintain cash reserves |
The Roll-Up Timeline
The first six months are about thesis and relationship-building. Define your platform vision, which practice areas, which industries, which geographies. Build relationships with 15-20 potential targets before you need to execute. Develop your financial model, determine your financing approach, and engage an M&A attorney who knows professional services partnerships.
Months six through twelve: close your first deal, prioritising a firm with complementary expertise and genuine cultural compatibility. Spend 90 days building trust rather than integrating. Start shared services consolidation on back-office functions only. Prove the cross-selling thesis with one or two real wins.
Months twelve through twenty-four: close deals two and three. Build the shared services infrastructure properly. Launch knowledge management and cross-selling programmes. Hire a COO or Chief of Staff to manage integration complexity.
Months twenty-four through thirty-six: combined revenue is approaching $10M or more. Career paths, training programmes, and talent development are formalised. Advisory and fractional revenue is growing as a percentage of total. At this stage, consider a PE partnership to fund the next phase of acquisitions.
From months thirty-six to sixty, the platform carries $15M-$30M or more in revenue with 25-30% EBITDA margins, five to eight practice areas, and 100 or more consultants. Strong organic growth sits on top of acquisitive growth. The valuation is 7-10x EBITDA, and the multiple arbitrage has fully played out.
FAQ
What makes consulting roll-ups riskier than other agency roll-ups? People dependency. In an SEO agency, processes and tools contribute significantly to client outcomes. In consulting, the individual consultant’s expertise and relationships are the product. When key people leave a consulting firm, clients often follow. This is why non-competes, earnouts, and equity rolls are not optional extras but structural requirements.
How do I prevent partners from leaving after acquisition? Three mechanisms used together: earnouts that tie 30-50% of the purchase price to their staying for two to three years; equity in the combined platform vesting over three to five years; and a genuinely better professional environment with more resources, bigger engagements, less administrative burden, and a clear path to building something larger. If you can offer money but not a better experience, partners will leave when the earnout ends.
Should I acquire firms in the same specialty or different ones? Different. The value of a consulting roll-up comes from building a multi-practice platform. Acquiring three strategy firms creates size but limited synergy. Acquiring a strategy firm, a technology firm, and an operations firm creates a platform that can serve clients across multiple needs, with each acquisition opening cross-selling opportunities the others cannot access alone.
What utilisation rate should I target? 70-75% is a healthy platform target. Below 65% and margins compress. Above 80% and you face burnout risk that drives turnover. The platform’s structural advantage is that shared bench capacity smooths utilisation across practices: when one practice is slow, its consultants support another.
How do I handle different compensation models? Slowly and transparently. In year one, maintain each firm’s existing structure. In year two, introduce a unified framework with clear tiers but grandfather existing compensation for 12-18 months. The framework should reward utilisation, client development, and platform contribution through cross-selling, mentorship, and thought leadership. Never surprise partners with compensation changes.
When should I bring in PE? After two or three acquisitions, when you can demonstrate that the integration model works, cross-selling generates real revenue, key partners have stayed, and organic growth is healthy. PE firms want to fund a proven playbook at scale, not help you prove a thesis with their capital.