Firms in this industry provide accounting, advertising and marketing, architectural, consulting, engineering, IT, legal, and scientific research services. Major firms include US-based Bechtel; Computer Sciences Corporation; IBM; Jacobs Engineering Group; Latham & Watkins; McKinsey & Company; and Omnicom; as well as Accenture (domiciled in Ireland); Capgemini (France); Deloitte Touche Tohmatsu (UK); PricewaterhouseCoopers (UK); and WPP (Ireland).
The US and the European Union are the largest markets for professional services, although firms are expanding in emerging economies such as India and China.
The US professional services industry includes about 770,000 firms with combined annual revenue of about $1.6 trillion.
Demand is driven by corporate profits and the overall health of the US economy. Although some professional services are necessary for the normal functioning of most companies, many services can be postponed during economic downturns. The profitability of individual firms depends on having a regular flow of projects. Large firms have advantages in marketing and in being able to offer wider ranges of services to meet the needs of major clients. Small firms can compete successfully by offering special expertise or focusing on particular regions. The US industry is highly fragmented: the 50 largest firms account for less than 20% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
The three largest professional services segments are IT services (about 20% of industry revenue), legal services (15%), and architectural and engineering services (15%). Consulting, accounting services, and scientific research each generate about 10% of revenue....