Consultancy fees to rise, says Key Note report

Design consultancy fees are set to rise by 12.7 per cent over the next four years, according to the latest design sector report by business research group Key Note.

The growth of the Internet and the increasingly global outlook of the industry are set to be the key drivers of this growth, says the report.

According to Key Note’s figures, more than 50 per cent of the £689m fee income earned by UK design groups in 1999 was taken by the top 80 consultancies, and the majority of that by the top few “superleague” groups. Key Note ranks Imagination as the leading UK group by fee income, followed by Enterprise IG, Interbrand Newell and Sorrell, Fitch and Siegelgale.

But, the report cautions, there are a number of weaknesses to the industry and threats to its future. It says increasing competition will prevent fees from rising, and that, as technology allows groups to operate outside London, those with offices in the capital will begin to find them an expensive burden.

The report also cautions that Millennium celebrations have caused a short-term boom now about to end, that the strong pound will hamper UK consultancies trading overseas, and that UK companies will be at risk of staff poaching by foreign rivals.

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