Kennedy Consultancy Research & Advisory's 'Benchmarks in Consulting- Financial and Operational Metrics' report has identified an average 12% (approx) reduction in gross margins for firms in 2009. The spread from worst to least worst was 14% with smaller firms being hit the hardest.

This correlates with our sales revenue analysis outlined in our recent article on the 2010 Consulting Industry M&A Outlook. Our index on large firm revenue performance indicated that sales dropped by around 8% and our own small firm research identified an average 10% drop in 2009.

However that was 2009 and even at the end of that year our analysis in the UK small firm market showed that sales forecasts were much more optimistic.